Tech companies and developers racing to build data centers for artificial intelligence and cloud computing are losing a growing number of local zoning fights across the United States, as residents from farming towns to growing suburbs organize to block proposals they say threaten their communities’ character, water supply and electric rates.

Between April and June, Data Center Watch — a project of AI security consultancy 10a Labs — counted 20 proposals valued at $98 billion across 11 states that were blocked or delayed amid local opposition and state-level pushback. That represented roughly two-thirds of the projects it was tracking during that period.

The resistance has become a significant obstacle to an infrastructure expansion on which Microsoft, Google, Amazon and Meta are collectively spending hundreds of billions of dollars globally, and has prompted industry leaders to warn publicly that community pushback now ranks among the primary risks to data center development.

“It’s becoming a huge problem,” said Andy Cvengros, who helps lead the data center practice at commercial real estate firm JLL. He counted seven or eight deals he had worked on in recent months where opponents went door-to-door, handing out shirts or putting signs in people’s yards.

Microsoft acknowledged the challenge formally in an October 2025 securities filing, listing operational risks that include “community opposition, local moratoriums, and hyper-local dissent that may impede or delay infrastructure development.”

Concerns spread across states

In Indiana alone, Bryce Gustafson of the Indianapolis-based Citizens Action Coalition counted more than a dozen data center projects that lost rezoning petitions. “I’ve been doing this work for 16 years, worked on hundreds of campaigns I’d guess, and this by far is the biggest kind of local pushback I’ve ever seen here in Indiana,” Gustafson said.

Resident opposition has centered on several interconnected concerns: steep electricity rate increases that larger data center loads could accelerate, loss of open space, farmland or rural character, the constant hum of on-site servers and diesel generators, potential effects on wells and aquifers, and damage to property values. Municipal boards in many communities are navigating whether data center proposals fit within existing zoning frameworks, with some attempting to write new ordinances.

In Matthews, a Charlotte suburb in North Carolina, developers withdrew a project from an October agenda after Mayor John Higdon told them it faced unanimous defeat. The project would have funded half the city’s budget, and developers had promised environmentally friendly features. But town meetings overflowed, and constituent contact ran “999 to one against,” Higdon said. “Every person that voted for it would no longer be in office,” he said. “That’s for sure.”

Minnesota campus on hold

In Hermantown, a suburb of Duluth, Minnesota, a proposed data center campus described as several times larger than the Mall of America is on hold amid challenges over whether the city’s environmental review was adequate.

Residents said they felt betrayed when they discovered that state, county, city and utility officials had known about the proposal for an entire year before the city — responding to a public records request filed by the Minnesota Center for Environmental Advocacy — released internal emails confirming it.

“It’s the secrecy. The secrecy just drives people crazy,” said Jonathan Thornton, a realtor who lives across a road from the site.

The project is being developed by Mortenson for an unnamed Fortune 50 company. Mortenson said it is considering changes based on public feedback and that “more engagement with the community is appropriate.”

Rebecca Gramdorf, whose six-acre vegetable farm sits near the proposed site, said she found out about the project from a Duluth newspaper article, immediately worried about the farm’s future, ordered 100 yard signs and organized with neighbors she found online. “I don’t think this fight is over at all,” she said.

Industry reassesses approach

In Pennsylvania’s East Vincent Township, resident Larry Shank addressed supervisors directly in December. “Would you want this built in your backyard?” he asked. “Because that’s where it’s literally going, is in my backyard.”

Some industry representatives say opponents are spreading inaccurate claims about data centers’ environmental effects, which they say are difficult to counter. Industry groups are pressing developers to engage the public earlier in the process, emphasize economic benefits and highlight efforts to conserve water and power.

“It’s definitely a discussion that the industry is having internally about, ‘Hey, how do we do a better job of community engagement?’” said Dan Diorio of the Data Center Coalition, a trade association that includes major technology firms and developers.

Some developers facing uncertain zoning outcomes are considering selling properties once they secure a power source — a highly sought-after commodity that makes a proposal far more viable and valuable.

“You might as well take chips off the table,” said Maxx Kossof, vice president of investment at Chicago-based developer The Missner Group. “The thing is you could have power to a site and it’s futile because you might not get the zoning. You might not get the community support.”

Microsoft, Google, Amazon and Meta did not respond to Associated Press questions about the effect of community pushback on their data center plans.