By Jason Collins
The use of artificial intelligence (AI) has grown massively, and while this technology seems to operate out of thin air, the reality is very different. Behind this fast-growing and invisible technology are the very visible data centers popping up around the country. More than 3,900 data centers are already in operation, with thousands more slated for construction as the AI industry continues to grow, and the state is touting promising tax breaks for those involved.
It’s no surprise these data centers are popping up as the demand for cloud computing, streaming, remote work, and digital services grows. But while they bring investment and digital infrastructure, it’s the local communities just miles from these mega-buildings who are feeling the effects of these all-consuming centers.
Data Centers and Economic Growth
The United States is already home to more than 3,900 data centers, with another 1,500 data centers in various stages of development across the country. According to data from the World Resources Institute, the U.S. currently accounts for around 37% of the world’s total, with Virginia hosting the most centers, followed by Texas and California. Lawmakers and tech giants have argued that these centers, which house servers, supporting systems, and networking equipment, can boost the local economy. According to tech giants, these data center projects create new jobs and increase local economic development by increasing property tax revenue. A further benefit is that as AI infrastructure grows, so too must the local infrastructure, like roads and utilities, Starbucks, Crumbl, hot yoga studios, and everything else that supports a modern tech-driven ecosystem.
Kevin O’Leary, venture capitalist and “Shark Tank” investor, has recently clashed with residents in Box Elder County, Utah, over a new AI data center he’s backing on a 40,000-acre campus. O’Leary claimed the project would create many jobs, but residents remain unconvinced, as concerns about the environmental impact weigh heavily. But this is not unique to O’Leary’s project. Across the country, communities have raised concerns about the impact that these massive data centers have on surrounding areas.
Local Energy Drain
While lawmakers and tech giants may tout the economic benefits of these projects, when it comes to the impact on local resources, they’re a lot quieter. Data centers are energy-hungry. Recent data reveals that a single modern AI data center can use as much power as 100,000 homes. Sometimes more.
A study conducted by Lawrence Berkeley National Laboratory found that by 2028, data centers could represent up to 12% of all U.S. electricity consumption. And that the rate of consumption is going to grow. Between 2014 and 2018, the annual growth rate of consumption was around 7%. The growth rate between 2023 and 2028 was a staggering 27%, and with the industry and demand growing at a rapid pace, this growth rate might increase further.
We are on the verge of an age that is uncomfortably adjacent to The Matrix, where human beings, or at least human services, function as batteries to power machines.
With increased electricity consumption comes the added issue of rising utility costs. This infrastructure costs billions to build, and how are these costs recouped? Through raising the price of utilities for nearby residents. For example, in the PJM grid region that serves 65 million people across 13 states, power supply costs increased from $2.2 billion to $14.7 billion in one year.
One year.
During this period, data centers accounted for nearly two-thirds of that increase. Across the country, electricity costs have been rising as consumption grows.
U.S. Senators Elizabeth Warren (D-Mass.), Chris Van Hollen (D-Md.), and Richard Blumenthal (D-Conn.) have opened an investigation into the role of data centers in driving up utilities costs, particularly those operated by tech giants like Google, Microsoft, Amazon, and Meta. In the letters that were sent, lawmakers wrote,
“We write in light of alarming reports that tech companies are passing on the costs of building and operating their data centers to ordinary Americans, as AI data centers’ energy usage has caused residential electricity bills to skyrocket in nearby communities…Through these utility price increases, American families bankroll the electricity costs of trillion-dollar tech companies.”
It’s not just the electricity grid that data centers are impacting, but the water supply. Large data centers can consume as much as 5 million gallons of water annually. Reports predict that by 2028, hyperscale projects will consume between 16 billion and 33 billion gallons annually. This is enough water for around 360,000 households. Residents in a rural stretch of Georgia have experienced issues with water since the arrival of a data center. One resident, whose porch is now a mere 400 yards from the building, told a BBC correspondent that, “I can’t live in my home with half of my home functioning and no water. I can’t drink the water.”
The local believes that the construction of the data center has disrupted her private well, resulting in an excessive build-up of sediment. This is not a unique example either. Residents in Fayetteville, Georgia, noticed their water pressure was unusually low. Upon investigation, officials found two industrial-scale water hookups feeding a data center campus located 20 miles south of downtown Atlanta. The data center had drained nearly 30 million gallons of water without initially paying for it. In response to the crisis, local officials told the already frustrated community members to scale back their water usage even though it was the data center that created the problem in the first place. Versions of this story are increasingly found across the country in communities with data centers on their doorsteps.
Climate Impact
Because of the excessive demand for power supply, many facilities rely on gas-fired generation as well as diesel. But this has impacted the air quality in the surrounding areas. One example is Memphis, Tennessee. More than 30 natural gas turbines intended for daily use are being installed at xAI’s new Colossus data center. Residents and the NAACP (The National Association for the Advancement of Colored People) have filed a notice of intent to sue under the Clean Air Act, arguing that the project could worsen air quality in the city. According to a study conducted by the Kapor Foundation, pollutant emissions from data centers could contribute to over one-third of asthma deaths by 2030.
Concerns about the environmental damage extend past this one project. According to CNN, researchers like Andrea Marinoni, associate professor with the Earth Observation group at the University of Cambridge, are studying how data centers are creating “heat islands.” These islands refer to warming on the land around data centers, with temperatures rising by 16 degrees Fahrenheit. Think of how hot your laptop gets, then multiply this exponentially.
Researchers have found that the temperature increases can be felt in areas up to 6.2 miles away. The concern is that with more data centers on the way, the added heat on an already planet-warming Earth will drive global temperatures higher. Don’t forget about the carbon footprint that a massive data center will leave behind. A recent 2026 study revealed that the carbon footprint of AI systems alone could be between 32.6 and 79.7 million tons of CO2 emissions in 2025. This is equivalent to annual emissions of at least 16 million passenger vehicles!
Who Bears the Cost?
Data centers have become essential infrastructure for powering everything from cloud storage to everyday streaming services. Their growth is unlikely to slow anytime soon, and they promise economic investment. But it’s the American communities who are discovering that these benefits come with health, economic, and environmental costs. It’s these residents who are now bearing the burden of digital expansion.
The bigger question is not about whether these data centers will continue to be built, but rather who will advocate for the communities expected to host them? It’s a known fact that communities have limited resources compared to the trillion-dollar tech companies. This means that as the industry continues to grow, lawmakers and tech giants need to balance innovation with accountability. The answer to who can out-lobby these companies is uncomfortable. Realistically, it is no one. And without stronger oversight and community protection, this will become a reality that Americans will simply have to deal with.
