A Data Center boom driven by artificial intelligence is creating a new source of conflict in communities across the United States, where residents are increasingly challenging plans for enormous facilities. They fear the centers could transform neighborhoods, consume large amounts of electricity and water, generate noise and put pressure on local infrastructure.

The disputes are emerging as technology companies race to build the computing infrastructure needed to train and operate increasingly sophisticated AI systems.

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Data Center Development Concerns

In some communities, residents say they were not adequately informed about proposed projects before construction or approvals moved forward.

The controversy has become particularly intense in places where large industrial projects are being proposed on farmland, near homes or in communities with limited experience handling developments that can cover hundreds of acres.

The issue is playing out in Gilroy, California, and Archbald, Pennsylvania, two communities that illustrate the growing tension between the economic promises of data center development and residents' concerns about its local costs.

What Is a Data Center?

A data center is a specialized facility designed to house computer servers, networking equipment, storage systems and other technology used to process, store and transmit enormous amounts of digital information.

Unlike an ordinary office building filled with computers, a modern data center can contain thousands of machines operating continuously.

The facilities require sophisticated cooling systems, backup power supplies, fire protection, security systems and connections to high-capacity electrical and communications networks.

Data centers are the physical infrastructure behind much of modern digital life. They support cloud computing, internet searches, streaming video, online banking, social media, business software and countless other services.

Increased Demand for Data Center Technology 

The rapid development of generative AI has dramatically increased demand for specialized data centers. AI systems require large numbers of powerful processors to train models and handle requests from users.

The U.S. Department of Energy says data center deployment is now a significant factor in near-term electricity-demand growth. Data centers potentially account for up to 9% of U.S. electricity generation by 2030 under an Electric Power Research Institute estimate cited by the department.

The facilities also have to keep their equipment operating around the clock. High-performance computing equipment produces substantial heat, making cooling a fundamental part of data center design.

Gilroy Residents Say They Were Left in the Dark

The controversy in Gilroy illustrates one of the most contentious aspects of the data center expansion: how much opportunity residents should have to participate in the approval process.

Amazon began construction of a roughly $2 billion data center in the California community after the project was approved through an existing industrial zoning process.

The facility covers about 438,500 square feet on 56 acres, according to reporting by The Wall Street Journal.

Many residents said they did not know about the project until construction was already underway.

No Community Engagement

The project was approved by a city development official under zoning rules that date back decades. Because the property was already zoned for industrial development, the project did not go through the kind of public process residents expected for a development of its size.

That has prompted city officials to consider changing the approval process so future projects would receive greater public scrutiny.

Amazon on the Defense

Amazon has defended its actions, saying it followed the applicable approval procedures for an industrially zoned property. The company has also acknowledged that it should have engaged with the community earlier and has held meetings and an open house to answer residents' questions.

For residents, however, the dispute is not simply about whether Amazon complied with existing rules.

It is about whether the rules themselves are adequate for an era in which data centers can consume enormous amounts of electricity and occupy hundreds of thousands of square feet.

Electricity and Infrastructure Data Center Major Concerns

The amount of electricity required by data centers has become one of the central issues in the national debate.

The Energy Department reported that U.S. data centers consumed about 4.4% of the nation's electricity in 2023.

Its 2024 analysis projected that they could consume between 6.7% and 12% of U.S. electricity by 2028, depending on how quickly the industry expands and how efficiently facilities operate.

AI data centers can be especially demanding because they may use thousands of specialized processors working together during training and other computational tasks.

Economic Benefits vs. Negative Impacts

That demand can create challenges for utilities and regional power grids. The Energy Department has said large data centers can have significant effects on regional grids because of the size and speed of their electricity demand.

For communities, the question becomes who pays for the additional infrastructure needed to serve these facilities.

Some developers and technology companies argue that data centers bring investment, construction work, tax revenue and other economic benefits. Government officials have also promoted the facilities as critical infrastructure for maintaining U.S. technological competitiveness.

But residents in some communities argue that economic benefits do not automatically outweigh potential effects on electricity rates, roads, water systems, land use and quality of life.

Water, Noise and Environmental Questions

Electricity is only part of the debate.

The massive buildings need cooling systems to prevent computer equipment from overheating. Depending on the technology used, facilities can require substantial amounts of water or use alternative cooling systems designed to reduce water consumption.

The Energy Department has noted that modern facilities increasingly use technologies such as closed-loop cooling, which recirculates water rather than continuously consuming fresh water.

Nevertheless, water use remains a major issue in communities where supplies are limited, or drought conditions are a concern.

In Gilroy, resident concerns included the region's drought conditions. Some residents questioned why they were learning about the environmental implications of the project only after opportunities for public comment had passed.

Other communities have raised concerns about backup generators, construction activity, noise and changes to the surrounding landscape.

Those concerns are particularly significant when facilities are built near homes, schools, parks or environmentally sensitive areas.

Related Sources and Further Reading

• The Wall Street Journal: Amazon data center project in Gilroy
• Washington Post: Data center development in Archbald, Pennsylvania
• U.S. Department of Energy: Data Center Electricity Demand
• U.S. Department of Energy: U.S. Data Center Energy Use Report
• U.S. Department of Energy: Data Center Resource Hub