Tech Giants Could Face Widespread Backlash Against Their Energy Use

As the race to build AI data centers intensifies with each passing month, a slow storm is brewing and could trigger widespread backlash against the massive energy hunger of these sprawling facilities cropping up across the U.S.

On Tuesday, NPR reported that there are conflicts brewing across the country regarding concerns about water usage and electricity consumption at operational or planned data centers. Communities feel that the data centers are disadvantaging locals since the facilities require huge amounts of water and that groundwater is being depleted, leaving locals to suffer water quality issues and frequent shortages.

In the report published by NPR, the authors point out that the electricity that a single data center requires is equivalent to what would meet the needs of 100,000 families. That comparison applies to typically built data centers, but many that are planned could easily use 20 times this amount of power.

As for water use, an International Energy Agency (IEA) report says data centers require water amounting to billions of gallons just for cooling the equipment at those facilities.

Concerns about water supply are real, as a recent report by the BBC published in August illustrates. The publication says residents of Mansfield in the state of Georgia have now started buying bottled water after a data center started being constructed in their area in 2018. The construction work has caused their wellwater to be murky, something that never happened prior to the commencement of that project.

As American states scramble to lure tech firms to construct data centers within their jurisdictions, competing states are engaged in a race to outdo each other in terms of the incentives they offer the firms considering building data centers in their jurisdictions. Unfortunately, some of the concessions that states are making to attract these AI projects are leaving residents with costs they didn’t bargain for. For example, energy costs have gone up for families in many states hosting data centers.

Estimates indicate that the electricity bills of residents in seven U.S. states hosting data centers have increased by billions of dollars in the recent past. In Virginia alone, the data shows residents have had to foot approximately $1.9bn in added power costs in 2024 while subsidizing the costs of transmitting power to data centers.

As these realities become more apparent, communities are likely to become increasingly agitated about these data center projects being established in their areas. Major tech companies like Amazon.com Inc. (NASDAQ: AMZN) need to come up with expansion plans that address the concerns of host communities. Otherwise, the backlash could embroil companies in costly legal battles and reputational harm as these concerns play out in the media.

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