It’s no state secret that data centers, the physical sites undergirding the AI boom with immense processing power, are energy hogs. Not accounting for cryptocurrency, data center operations already consume about 4.4 percent of the energy produced in the United States — a figure that’s likely to double or even triple by 2028.
As they consume more and more energy, the cost of electricity for US residents has skyrocketed. Over the last year, data center electrical use has contributed to sky-high electrical prices for nearby residents, and higher average prices across the country overall.
Americans, never ones to respond well to higher prices, have reacted with overwhelming disgust. Campaigns to oppose new data center construction now pop up anywhere a data center is proposed, from the big cities of the east coast to the small burgs of the Midwest.
That’s causing a headaches on Wall Street, the New York Times reports, as organized resistance to data centers slows new builds overall, placing strain on investors who bet big on the market AI to grow by leaps and bounds over the coming years.
“A lot of the commitments and the build-out of data centers where it’s easy has kind of been done, so you’re getting marginally more difficult,” Morgan Stanley managing director Todd Castagno lamented to the NYT. “From a markets perspective, expectations might be, maybe not reset, but realigned with the fact that it’s hard to put a couple trillion dollars in the ground in a short time.”
Part of the problem facing the tech industry and their financial backers is that the more people learn about data centers, the more they tend to despise them. Given that tech billionaires have made AI out to be the most important development in the history of the world, it makes sense that awareness — and therefore discontent — would rise sharply.
“The people who are trying to block or protest these things are much more well educated than they were before,” Andy Cvengros, a co-lead at data center firm JLL, told the NYT. “We’ve had a number of projects get canceled that were by very reputable groups that were coming to the table with $50, $60, $100 million contributions to local communities, and still getting shut down.”
As the world braces for energy shortages due to the US war on Iran, the masses aren’t the only thing dampening Wall Street’s days. As Reuters noted on Thursday, utility companies and electrical grid operators are also calling on the tech industry to reduce their consumption, putting already existing data centers under even more scrutiny.
With some $710 billion in data center capital expenditures planned in just 2026 alone, it may be some time before the two stressors force investors to come to terms with the monster they’ve created. Whether their patience outlasts the grid — or the political will to keep the whole charade going — is the crucial question.
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