Local opposition creates roadblocks for AI boom
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Illustration: Sarah Grillo/Axios
Amid the current AI obsession, local opposition is the one thing that has the potential to slow the AI boom — and arguably already has.
By the numbers: According to the most recent report from Data Center Watch, 20 projects representing some $96 billion in investments were blocked or delayed in the second quarter of 2025 alone amid local opposition.
- And Wilmer Hale says over 200 bills were introduced in 2025 aimed at regulating the sector across states, 40 of which became law.
The latest: The pushback has only intensified since then. Ten new moratorium proposals — which would freeze data center development — were filed in the past month alone, according to Sightline Climate.
Reality check: Data center capacity is already under stress, with JLL noting that the sector only had 1% vacancies last year.
State of play: Communities are increasingly worried about rising energy bills due to data centers, the noise nuisance, water usage, and the potential for AI to eliminate jobs.
The big picture: Proposed state and federal regulation are considering ways to address those those concerns, while still allowing data centers to operate.
- That could mean pushing builds further out from cities, requiring developers to pay for the own grid and power updates, or have their own power sources.
- Those restrictions could be a boon to some industries. For example, forcing data centers into more rural haunts would require more connectivity to be built out, boosting demand for fiber, pipes for cooling, and extra transmission lines.
- But it could also increase the cost of compute to the industry, as energy and compliance bills increase for the sector. Time to construction could also increase, as states weigh zoning restrictions.
The bottom line: Data center and AI companies will have to evolve fast to address local concerns, or speed up timelines to put those data centers in space.
