Growing Opposition to Data Centers Could Hinder AI Initiatives
A wave of backlash against new data center construction across the US is creating cost uncertainties for IT leaders planning artificial intelligence expansions.
The Rising Tide of Opposition
Mid-July protests targeting data centers occurred in 42 states, fueled by concerns about increased electricity and water usage, as well as land consumption. Ten states—including Florida, Georgia, and Virginia—have already implemented construction moratoriums, with eight more considering similar legislation.
Economic Implications for CIOs
This shift means power cost assumptions from 2023 may be inaccurate in nearly half the country, according to Arif Gasilov of sustainability advisory firm Gasilov Group. IT leaders should:
- Recalculate economics for AI deployments requiring data center capacity
- Inquire about new tariff structures with providers
- Consider smaller-scale solutions where possible
Deployment Challenges Ahead
With fewer options for compute power, organizations may need to rethink how they deploy AI at scale. This could lead to:
- Less flexibility in workload placement
- Increased dependence on a limited number of providers
- Potential delays in securing capacity
“Compute capacity is becoming as strategically important as electricity and semiconductors,” notes Kevin Surace, CEO of TokenCore.
Mitigating the Risk
CIOs should treat compute and energy as strategic supply-chain risks by:
- Securing capacity through multiyear agreements
- Diversifying geographic locations
- Utilizing efficient AI models
Experts suggest asking data center providers critical questions about water sourcing, cooling systems, power generation, and environmental performance to ensure sustainable practices.