By Joe Light
The artificial-intelligence boom might usher in the next industrial revolution, but first it is going to have to answer to Cheryl Cordes.
The retired nurse and her neighbors in Genesee County, N.Y., have spent months protesting the construction of a data center in their rural community in the western part of the state. The 90-acre facility, whose end user is shielded by nondisclosure agreements with county officials, would likely help provide the massive computing power needed for AI applications.
Demand for such facilities has had hockey-stick-like growth in the past few months, its developer, Stream Data Centers, says. But just as often, projects have run into opponents like Cordes and her husband Mark, who moved to Alabama, N.Y., more than 40 years ago.
Mark Cordes says he doesn't mind the occasional smell of manure when the local farmers are fertilizing their crops, but that the constant hum of a data center would fundamentally change their neighborhood. His wife says she's especially concerned that the center will emit a low-frequency noise called infrasound that she fears could cause health problems.
The couple has planted yard signs opposing the project and gone door-to-door surveying neighbors to collect evidence of the community's opposition. Cheryl Cordes rallied in May on the steps of the New York State Capitol building in support of legislation to impose the first statewide moratorium on large data-center construction. New York Gov. Kathy Hochul is now considering signing a moratorium into law.
Tech companies' insatiable demand for AI is facing a reckoning with voters across the country, and the grassroots backlash is threatening to complicate — or even derail — the single-most important driver of the U.S. economy and stock market. What started as scattered protests against large data-center projects is snowballing into a national movement, marked by rallies against data-center buildouts, canceled projects, and campaigns to impose statewide moratoria on new data-center construction.
In the past several years, "one could credibly question whether industry, scientific, and commercial developments would overwhelm regulation, but 2026 increasingly seems the start of a long, probably deep regulatory engagement," analysts for 22V Research wrote in a recent note.
About 44% of Americans oppose data-center construction in the U.S., versus 21% who support it, according to a Reuters/Ipsos poll conducted in June. The numbers are even worse among people asked if they would support construction of a data center in their community, with 14% in favor and 57% opposed.
Traditional data centers for cloud computing have been around for decades, but the new wave of data centers dwarfs the older generation in power usage, scale, and the rapidity with which they are being built. The equipment in some data centers can give off an incessant hum that neighbors describe as torture. The facilities can employ thousands of people in the development phase, but far fewer once construction is completed. Nor do they have the economic impact of other sorts of industrial sites.
Data-center critics say the facilities' intense power needs pollute the air, and studies have shown that they sometimes drive up local electricity costs. Researchers at the Dallas Fed said earlier this year that under plausible scenarios, the data-center buildout could add up to 0.13 percentage points to annual inflation by 2030 as measured by the personal consumption expenditures price index.
Many Americans are wary of AI technology, which doesn't help. Executives at Anthropic have warned that AI models could replace millions of white-collar jobs. The White House has delayed the rollout of some more advanced AI models over concerns that they could be used to hack into sensitive government or financial systems.
To try to address the power costs, Alphabet's Google, Microsoft, Meta Platforms, Oracle, xAI, OpenAI, and Amazon.com all visited the White House in March to promise they would build, buy, or bring all the power needed for their data centers, an effort encouraged by President Donald Trump to address concerns about rising electricity bills. Still, that hasn't satisfied many municipalities.
The resistance comes at a sensitive time for AI companies. OpenAI and Anthropic have both filed confidentially for initial public offerings that could take place later this year or next year. Hyperscalers that operate huge datacenters, such as Microsoft, Google, and CoreWeave, say they are capacity constrained, and warnings that a data-center backlash could hamper growth are starting to bleed into companies' annual reports and earnings calls.
The data-center buildout has effectively carried the economy and stock market in 2026. Morgan Stanley estimates that hyperscalers will spend $800 billion on capital expenditures this year, roughly the same amount that all non-tech S&P 500 companies combined spent on capex in 2025. The Semiconductor Industry Association estimates that the government and industry will spend another $4 trillion on data-center infrastructure through 2028.
AI enthusiasm has been almost entirely responsible for the S&P 500's 84% rise since OpenAI publicly released ChatGPT in November 2022. Goldman Sachs says the AI investment theme is likely to account for half of all earnings growth over the next two years. Many investors think the technology will drive productivity gains and increase demand for all sorts of services as costs go down, rather than wiping out white-collar work.
But the uncomfortable reality for AI companies and their proponents is that a huge portion of the planned capacity may not materialize. In the first quarter, 75 data-center projects worth $130 billion were blocked or delayed by local opposition, according to Data Center Watch, a research firm backed by AI security company 10a Labs. That is as many as faced that fate in all of 2025.
In Genesee County, many residents, much like the Cordes', are concerned that the so-called Stamp facility — shorthand for the Science & Technology Advanced Manufacturing Park — will be noisy and drive up power bills. "Even if they put a manufacturer there, that would be fine, " says Tim Molaro, who lives with his wife, Marianne, a few miles from the site. "But to put this data center in there, it's going to draw power and that power is going to be paid [for] by us."
Stream executives have said the company is paying for any required infrastructure and that the facility won't impact residential supply or rates.
The Tonawanda Seneca Nation, a local tribe whose land abuts the industrial park, has helped organize the community against the $19.5 billion project, which would draw about 500 megawatts of electricity, making it one of the largest in the country. The tribe and Sierra Club filed a lawsuit last year to stop a previous data-center project on the same site, alleging it hadn't gone through required environmental reviews. Local authorities rescinded the approvals for that project, mooting the lawsuit, only to come back later in the year with a new proposal for a data center twice as big.
AI executives have acknowledged the industry needs to do more to win over local communities.
"Why is the world angry at us? They're angry at us because we were dopes, " said Andrew Feldman, CEO of AI chip maker Cerebras Systems at a Bloomberg Tech conference in June. "We raced ahead, and we didn't think about the communities into which we were putting these data centers."
Feldman said companies should have made a better case to communities about the economic benefits of data centers and done more to ensure they wouldn't have negative effects on the local population.
Executives at Stream Data Centers say they have been trying to win the support of the facility's potential neighbors. They have taken local officials on tours of existing facilities in an effort to show that the local impact isn't as dire as opponents warn. Some neighbors of those facilities aren't even aware a data center is next door, Stream executives say.
Stream, whose majority owners are funds managed by private-equity firm Apollo Global, has promised that at the property's border, the new data center will be no louder than a residential dishwasher or a quiet conversation. It has given tens of thousands of dollars to the local school.
"The coordinated pushback that we're seeing is definitely creating issues for the industry to be able to grow as quickly as it wants to grow," says Oisín Ó Murchú, Stream's chief development officer.
The pushback "has created so much information online that is just anti-data center that it's hard to have a direct conversation with people about the merits of projects," he says.
Despite its efforts, the industry has found that allies are hard to come by. Some anti-AI advocates say it is the most bipartisan issue they have ever worked on. Moreover, it is an issue that "extends across demographics," says Kristen Gonzalez, a New York state senator and sponsor of the data-center moratorium bill. Hochul has until the end of the year to sign or veto the bill, but Gonzalez says that she and other allies are trying to get the governor to sign it this summer.
Hochul's office said in a statement that she is considering the legislation.
Lawmakers in Arizona, Illinois, and Ohio have recently restricted or ended tax breaks or other economic incentives for data-center construction.
At the federal level, Sen. Bernie Sanders (I., Vt.) has proposed a nationwide data-center moratorium, as has Rep. Alexandria Ocasio-Cortez (D., N.Y.). Rep. Nancy Mace (R., S.C.) wants to pause data-center construction in her home state of South Carolina.
AI companies are scrambling to mount a defense. Super PAC Leading the Future, whose funders include venture-capital firm Andreessen Horowitz and executives from OpenAI and Palantir Technologies, has raised more than $100 million to support pro-AI candidates. And Build American AI, a nonprofit advocacy group, is running a multimillion-dollar advertising and publicity campaign to spread the message that America needs to invest in artificial intelligence to stay ahead of rivals like China.
The pro-AI organizers acknowledge it's an uphill battle. "My mom hates the work I'm doing," says Build American AI Executive Director Nathan Leamer. "You can literally hear the turnpike four miles from their house, and she's complaining about the sound of data centers. I'm like, 'Mom, there is not a data center near you.' "
Leamer likens the data-center battle to the fight over the buildout of America's wireless network in the 1990s. Local communities in that battle fought the construction of cellular towers, often with arguments about visual blight and potential health effects. In that case, Congress passed a law, the Telecommunications Act of 1996, that restricted communities' ability to fight the construction. The law said local communities couldn't prohibit or effectively prohibit wireless service or deny the construction of a facility on the basis of concerns about radio frequency emissions if the facility complied with federal regulations.
Given voters' opposition to data-center construction, it is unlikely Congress will support a similar effort this time.
The most reliable partners have been unions representing construction workers and tradesmen, who could spend their careers building data-center facilities as long as the pipeline continues.
OpenAI announced a partnership earlier this year with North America's Building Trades Unions, committing $1.5 million for recruitment and training programs. Community protesters at the Stream data center have been met on occasion by counterprotests led by regional worker unions.
Data-center opposition still is more of an emerging risk than one that will immediately pressure AI-related companies' stocks, says Gil Luria, head of technology research at D.A. Davidson. The potential problems are most acute for smaller hyperscalers dependent on a handful of megaprojects, rather than companies like Microsoft, Google, and Amazon that have a global footprint.
"The smaller AI clouds are small enough, and have projects that are big enough, that losing a few projects is material," Luria says.
For example, some residents are trying to hamstring a project being developed in Kenilworth, N.J., by hyperscaler CoreWeave that would draw 250 megawatts of electrical power capacity. That represents about a quarter of the company's active capacity today. An online petition calling for construction to be stopped has gathered more than 11,000 votes and reads, in part, "143 new jobs for permanent environmental damage, extreme overconsumption of water, industrialization, and corruption is not worth it."
"We recognize that not everyone will agree on every aspect of a project, and we respect that these discussions can be passionate," a CoreWeave spokesperson says. "As a New Jersey company, we appreciate the opportunity to contribute to the state's future and we're committed to ensuring residents benefit from the opportunities that technology and AI can create."
AI cloud provider Nebius Group added a risk factor in its 2025 annual report that warned that "increasing public opposition to data center projects in certain localities" could affect its AI data-center buildout. It was the company's first such warning.
So far, most data-center operators haven't seen the backlash as a reason to lower their projected growth trajectories, says Nick Del Deo, an analyst at MoffettNathanson.
"Operators believe they can either manage around it by directing where to put investment dollars or otherwise work with localities so that people are comfortable with their plans," Del Deo says.
Some states, such as Texas, have welcomed data-center development even as other states consider moratoria. That doesn't solve the industry's problem, however. AI companies use some data centers to train their models on large data sets, a process that takes weeks and can take place anywhere in the world before the completed model is distributed to the rest of the world. Other data centers process users' queries, and there, a long distance can mean customers take longer to get a response.
That might not matter for some users, but in finance, gaming, and real-time translation, even a few milliseconds is important, says Del Deo.
The Cordes family has a motor home parked in front of their house that Cheryl Cordes says she plans to use as an "emergency exit" should the Genesee County project move forward. One idea is to head to Amish country in New York's Southern Tier.
"We don't want to make a rash decision as to where to go," Cordes says. "Where do you go? What's the guarantee that a data center ain't going to pop up?"
Write to Joe Light at joe.light@barrons.com
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