Growing resistance to data centre construction in the US puts pressure on Elon Musk's plans

After the midterm elections in the United States, large technology companies may face new challenges over building data centres in the country. Citizens have voted in favour of imposing restrictions on data centre construction at the local level. At the same time, several politicians have won elections promising to regulate data centres. This has created fresh uncertainty over the expansion of artificial intelligence (AI) infrastructure.

A report by the technology news outlet TechCrunch says the Democrats' success in this election may also affect the technology sector. In particular, large companies involved in building and operating data centres may face new restrictions at the local and central levels.

Journalists Anthony Ha, Kirsten Korosec and Sean O'Kane discussed the matter on TechCrunch's 'Equity' podcast. In their view, public discontent over data centres is steadily growing in different parts of the United States. The issue has now also become a political one. Concern over it exists not only among Democrats but also among Republican and independent voters.

In the discussion, Sean O'Kane said Elon Musk was one of the biggest donors to the Republican Party. He is believed to have donated around 500 million dollars or more to the party's election campaign.

But after the election, the political situation has also changed significantly in Texas, where his businesses are headquartered. There, Democratic candidate Gina Hinojosa has been elected the new governor. During her election campaign, she had promised to regulate data centres.

However, the podcast discussants believe that opposition to data centres alone was not the only reason for the Democrats' electoral success. In their view, people's concern is growing over the construction of such infrastructure at the local level. Large technology companies often try to get project approvals under conditions of confidentiality. In such cases, non-disclosure agreements (NDAs) are signed with elected representatives.

As a result, local residents do not get adequate information about the size of a project, its electricity and water demand, and its environmental impact.

Kirsten Korosec said plans to build large data centres in water-scarce areas such as the south-western United States have further heightened local people's concerns. Because necessary information about the environmental impact of projects is not disclosed, people of different political views are also opposing these initiatives.

In this situation, technology companies have taken initiatives to change their own policies on building data centres. Recently, OpenAI published a policy document called the 'Compute Campus Policy Blueprint'. It emphasises disclosing project information and increasing communication with local people. It also talks about plans to remove the compulsion of NDAs. In addition, the company is using the term 'compute campus' instead of 'data centre'.

But the TechCrunch discussants expressed doubt over whether merely changing the name can remove people's concerns. In their view, even if data centres are renamed compute campuses, local residents' concerns over the excessive demand for electricity and water will not diminish.

Alongside electoral and policy pressure, financial challenges may also grow for data centre construction. The podcast discussion said there is a change in Wall Street investors' interest in the huge investments in AI infrastructure.

As a result, large technology companies may come under pressure from both sides — government restrictions on one side and investors' attitudes on the other. But meeting the growing demand for AI services requires computing capacity on a large scale. For that reason, it will not be easy for technology companies to stop building data centres altogether. Over the next two years and beyond, policy decisions in this sector, the position of local people and the direction of investment may become important for technology companies.