More Data Center Projects are Being Cancelled as Community Pushback Intensifies

AI dominated news headlines during the recent 2-3 years and the meteoric rise of this industry has also created a boom in data center construction so that the systems behind the different AI solutions, such as generative AI systems like ChatGPT, can have the necessary infrastructure needed to support their operation. However, communities are increasingly expressing their opposition to the uptick in data centers within their areas and this is threatening to throttle the progress of the data center industry.

The major concerns of communities rotate around their rising electricity bills as power-hungry data centers cause utility firms to incur huge costs to upgrade their systems to meet this rising demand. Unfortunately, the costs of these upgrades are largely being passed to homeowners, who are effectively subsidizing the data centers in their locations.

Community members are saying enough is enough, and they are mobilizing to block the construction of data centers within their communities. The results of this pushback are beginning to show. For example, Data Center Watch says in a 3-month period last year, projects estimated to be worth $98 billion have been cancelled as a result of community opposition.

While that figure may look tiny when compared to the huge sums being injected by tech firms into building new data centers, it is worth noting that community opposition is growing and could stall a lot more projects. For example, Gizmodo points out that in 2023, only two projects were cancelled due to community opposition. In 2024, that number grew to half a dozen. In the last six months of 2025, cancelled projects ballooned to 21, to make a total of 25 projects for the entire year.

The growing numbers show that opposition to data center construction is growing rapidly, and this trend is likely to worry the tech companies focused on expanding their data center footprint to meet the exploding demand for AI. 2026 could therefore be a very challenging year for companies looking to spread their data center networks around the U.S. The numbers of abandoned projects due to community pushback are piling up, and there appears to be no end in sight for this trend.

For companies like Broadcom Inc. (NASDAQ: AVGO) that provide software solutions to data centers and other related facilities, this is a matter of concern because revenues could be curtailed if a lot more planned data center projects evaporate into thin air as the wave of community agitation against these facilities gains a lot more momentum. Tech companies may need to rethink their power and water use so that communities that are already strained aren’t put under additional stress by the colossal amounts of water and power needed by data centers.

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