Why Critics Are Wrong About the Data Center Boom—and What’s Really Behind the Backlash

Data centers—massive facilities packed with servers—are the backbone of the digital economy, processing everything from online searches to financial transactions. The rise of artificial intelligence has intensified demand for these facilities, as AI requires exponentially more computing power than traditional tasks. In response, companies are racing to build new data centers across the U.S.

But not everyone is celebrating. Progressive lawmakers and activists are sounding alarms, framing data centers as environmental and resource hogs. Rep. Alexandria Ocasio-Cortez (D–N.Y.) has declared,

"We must stop it!"

"Slow it down!"

Critics argue that data centers consume as much electricity and water as a small town. Last year, protesters disrupted at least 48 projects, including an incident in Indiana where a protester fired 13 bullets at a politician’s home over his support for data centers. Now, AOC and Sanders have introduced legislation to pause new data center construction—a move opponents call shortsighted.

Paige Lambermont of the Competitive Enterprise Institute warns that halting progress could backfire:

"If our economy was allowed to develop at the speed of Bernie Sanders, we would be significantly worse off."

Lambermont also dismisses concerns about rising electricity prices, noting that data centers have not significantly driven up costs.

"It's raised prices nowhere,"

She estimates that if not for these restrictions, the power grid could already have 100 to 200 gigawatts of unused capacity. Current regulations, which grant monopolies to government-approved utilities, further stifle progress. Microsoft recently struck a deal with Constellation Energy to reopen the Three Mile Island nuclear reactor, but bureaucratic hurdles mean the power won’t be available to Microsoft until other utilities build transmission lines—often hundreds of miles away.

For those who can afford it, bypassing regulations is possible. Elon Musk built his own power plant in Tennessee, using gas turbines to fuel a supercomputer.

"If you're Elon Musk, you can build your own,"

"but most people can't afford to build a gas or nuclear plant."

"No one wants to invest [billions] in something that the next presidential administration could come in and say, 'Actually, it's been illegal the whole time,'"