Marshall for The Hill: Cut Better Deals, But Don’t Shutter Data Centers

April 24, 2026
Will Marshall

President Trump is inflicting tariffs on America in a vain attempt to revive traditional manufacturing. Private investment is gushing instead into data centers, where the AI economy is being hatched.

The U.S. is the epicenter of this global investment boom in data centers, which support the internet, cloud computing and the training of ever-more capable artificial intelligence models. Spending on data centers is growing exponentially. Much of it comes from the “hyperscalers” like Amazon, Microsoft, Google, Meta, Oracle and OpenAI. The first four of these digital giants alone plowed $425 billion last year into centers, a figure expected to top $600 billion this year.

Surging capital investment in data centers and AI has helped propel the stock market to new heights. And for now, at least, it is making America the world’s foremost computing superpower, the pace car in a race against China and others to master AI. More than 4,000 data centers — almost 40 percent of the world total — are located here, compared to just 368 in China.

However, the U.S. digital goldrush is running into a groundswell of local resistance.

In Virginia, which has the nation’s biggest concentration of data centers (570), voters are having second thoughts. Three years ago, 69 percent said they were comfortable with new data centers in their community. That number has since dropped to 35 percent, with 59 percent voicing discomfort. Prince William County has nixed plans for a 1,700-acre campus near the Manassas civil war battlefield, which would have hosted dozens of data centers.

Maine recently became the first state to pause building large data centers pending a study of its energy needs. And Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) are pushing a bill in Washington to impose a national moratorium on construction.

The backlash springs from three main sources. First and most pervasive is the fear of soaring electricity bills. Data centers have a voracious appetite for power, putting pressure on utilities to generate more and upgrade local grids to transmit it. Residents worry that it portends higher monthly bills, even as energy costs already are rising faster than inflation. The centers also consume large volumes of water to cool servers, which could mean shortages and higher water bills. That has made them especially controversial in the desert West.

Second, a majority of Americans say they’re anxious about losing their jobs to AI. Such fears may be premature, but they cannot be airily dismissed. And while initially welcomed for creating construction jobs and generating substantial property tax revenues, data centers, essentially warehouses crammed with servers, have turned out to be only modest as job creators. An average facility might employ around 200 people.

Third, progressive opposition is hardening. Climate activists oppose building more natural gas pipelines and plants to run data centers. The populist left takes a typically dark view, warning that AI will further enrich “tech oligarchs” while inflicting a job apocalypse on working Americans.

On the political fringes, anti-AI extremists who prophesy “human extinction” are resorting to violence. Federal authorities last week charged a suspect in the firebombing of OpenAI CEO Sam Altman’s house in San Francisco. That followed gunfire sprayed into the house of an Indiana city councilman who had voted to greenlight a data center.

U.S. political leaders should reject a witless “yes or no” debate on data centers. Instead, they should back community efforts to cut better deals with tech investors and devise a national policy framework for developing AI along ethical and democratic lines.

The first imperative is protecting ratepayers. Most big tech firms already are pledging to cover the costs of new power generation. To make sure they pay their way, states can follow Virginia’s example and create a separate rate class for large consumers of power like hyperscalers.

Communities should stop dangling sales tax abatements to lure data centers. They also should negotiate “corporate citizenship” compacts that require investors to be transparent about resource needs and job creation, work to reduce noise and create “earn and learn” partnerships with community schools and businesses to help local workers learn how to use AI.

Center-left leaders should give AI doomers a wide berth and affirm America’s national interest in pioneering high-tech innovation. “I refuse to hand the lead in AI to China,” declared Sen. John Fetterman (D-Pa) in opposing the moratorium proposed by Sanders and Ocasio-Cortez.

They should also challenge climate activists to acknowledge that America will need more natural gas and nuclear power, as well as renewables, to supply abundant energy and steadily reduce carbon emissions.

Like the Clinton-Gore administration, which deftly midwifed the birth of the internet in the 1990s, Democrats should face the future with hope, not fear. They should work to turn today’s disruptive technological changes into new waves of opportunity for all Americans.