The public backlash against data centers has gotten so loud that President Donald Trump felt the need to address the issue a couple of weeks ago.
“The only reason that communities throughout the U.S.A. should not want Data Centers is if they want to end up being backward and poor,” Trump wrote on Truth Social on Aug. 31. “If we kill the Golden Goose, you will only have yourselves to blame.”
The president then warned that China “could not be happier” with the U.S. populace turning against AI data centers.
While that sort of top-down leadership may work in off years, 2026 is an election year, and not only are the people making their voices heard, but state governments are actually listening.
States rescind AI data center tax breaks
Governors on both sides of the aisle are moving quickly ahead of November’s midterm elections.
On Wednesday, the Wall Street Journal reported that Texas Gov. Greg Abbott, a Republican, and Pennsylvania Gov. Josh Shapiro, a Democrat, have each taken steps to pause or restrict data center development in their states.
Apparently, the National Republican Senatorial Committee, in defiance of the party’s leader, Trump, issued a memo saying that anti-data-center sentiment in Ohio has eroded support for Republican Sen. Jon Husted, who took the seat vacated by Vice President JD Vance. If Husted loses to his Democratic challenger, Sherrod Brown, the NRSC says Republicans nationwide should take the defeat as a lesson and pull back from supporting data center expansion.
But the NRSC isn’t the only Republican entity pushing back against Trump on data centers. According to the Journal, several informal Trump advisers have privately expressed concern that his strong support for data centers risks making him seem indifferent to the concerns of everyday Americans.
But Trump isn’t up for re-election in November. Countless Republicans are, though, and the people’s concerns are real.
What’s driving AI data center backlash
With gas prices elevated and inflation stubbornly high, the average American is already struggling with day-to-day necessities. Rising energy prices due to AI data centers is only adding to the financial strain.
Wholesale energy prices near major data center hubs have more than doubled since 2020.
Related: Public outcry over data centers has banks recalculating risk
According to Monitoring Analytics, the federally mandated independent watchdog, the 75.5% increase in power costs in the country’s largest region has been directly caused by data centers.
Wholesale electricity prices went up from $77.78 per MWh in first quarter 2025 to $136.53 per MWh a year later.
“The price impacts on customers have been very large and are not reversible,” the watchdog said in the report. “The price impacts will be even larger in the near term unless the issues associated with data center load are addressed in a timely manner.”
So, according to Monitoring Analytics, the damage is already done, and we can’t reverse it. We can only hope not to make it worse in the future.
States with the biggest tax breaks for data centers
Minority party Democrats are going to have a field day hammering Republicans over data centers leading into Election Day. The states with the biggest giveaways to data centers are all either Red or Purple.
According to the Journal, the largest reported sales-tax exemptions for data centers last year included:
- Virginia – $1.94 billion
- Georgia – $1.9 billion
- Ohio – $1.57 billion
- Texas – $1.02 billion.
Ohio Democratic Rep. Tristan Rader wants to repeal his state’s data center sales-tax exemption and renegotiate past deals with the likes of Amazon, Meta and Alphabet.
“They seem to have more money than God, and they’re able to build without the need for
these types of incentives,” said Rader, according to the Journal. He is also proposing new data center taxes and requirements that developers pay more for power and electrical infrastructure.
Amazon says it has invested nearly $40 billion in Ohio data centers since 2015, creating thousands of jobs and paying nearly $11 million in state property taxes and fees last year. Meta said it has invested more than $2.3 billion in Ohio data centers since 2018 and paid over $40 million in property taxes and fees during that time.
Amazon, Google, Microsoft cancel data centers over opposition
Companies like Amazon, Alphabet, Meta and Oracle are known as AI hyperscalers due to the hundreds of billions they’ve committed to building out AI and AI infrastructure.
“The existence of OpenAI justified an era of mania and opulence. Hyperscalers, bereft of new hypergrowth ideas, were able to point at the fact that ChatGPT had ‘the fastest growing user base of all time‘ and the Microsoft ‘supercomputer’ that built it and tell their investors that if they didn’t invest, they’d be left behind, with Amazon, Meta, and Google announcing their own nebulous ‘supercomputers’ in 2023,” AI critic Ed Zitron recently stated.
Related: AI data centers are facing growing political backlash, data shows
“This is the underlying greed that has driven this wasteful, reckless and destructive era — the belief that there will be another OpenAI and, as I’ve said, the chance to become the next OpenAI’s landlord,” Zitron said. “And like any great investment bubble, the more money that piled in, the greater the fear of missing out, the more dollars that can be justified in turn, and the more complex and deranged the mythology becomes.”
But even those hyperscalers, with their seemingly unlimited war chests, have run into opposition that has slowed their plans.
Amazon, Microsoft, and Google have each canceled large-scale projects after seeing sustained pushback in Arizona, Wisconsin and Indiana, respectively, in the past year.
Residents are worried about data center energy use increasing their own energy bills, noise levels that disrupt their way of life, the environmental impact and security risks.
Heatmap noted that Susan Li, Meta’s chief financial officer, referenced the changing attitudes about data centers during the company’s recent earnings call, describing the AI infrastructure building environment as “dynamic and uncertain.”
