Data center companies “dug their own grave,” Texas Governor Greg Abbott said Sunday, and “that’s why they got the backlash they deserve.” Nine months ago, Abbott crowned Texas the epicenter of AI development, alongside Google executives announcing a $40 billion investment in the state. Pennsylvania’s Josh Shapiro, a Democrat who actively recruited Amazon’s $20 billion commitment to his commonwealth, made a similar U-turn days earlier, signing an executive order he calls the “nation’s strictest guardrails” on data centers: no more fast-track permits, no nondisclosure agreements, and no state permit review until developers make binding commitments to community standards.

When a Texas Republican and a Pennsylvania Democrat pivot to the same position in the same week, it becomes clear that the politics of data centers have shifted. Like everything else in AI, sentiment is moving at an extraordinary pace. Even the AI industry’s biggest winner recognizes the need for change. The tech sector needs to “do a much better job working with the communities,” Nvidia CEO Jensen Huang said this week. 

While shifting or walking back public statements never looks good, leaders are simply listening to voters’ demands. The truth is that leaders across the political spectrum are pivoting on data centers for a simple reason: they want their communities to actually benefit. The best ones are listening to citizens’ concerns while constructively raising the bar for the data center industry—not cutting them off. 

The costs and benefits of data centers

Seven in ten Americans tell Gallup they oppose a data center in their own community, more opposition than a nuclear plant draws. The primary complaint started with electric bills. PJM’s independent market monitor attributes 63% of the region’s 2025/2026 capacity price increase to data center load, roughly $9.3 billion recovered from customers across 13 states in a single year, causing household bills to rise 1.5% to 5% this summer.The countervailing benefits are just as measurable. In Loudoun County, Virginia (often referred to as known as the "Data Center Capital of the World”), data centers supply as much as 31% of local revenue by the state legislature’s audit count, and the county has banked a $119.7 million stabilization fund against any downturn. The facilities also pay blue-collar wage premiums of 10% to 64% over comparable employers, the venture firm Andreessen Horowitz finds in Indeed postings data. The Dallas Fed has reported that skilled concrete workers, who typically make $28 to $32 per hour, are earning $45 per hour and a $150 per diem on data center jobs. And in July, the National Federation of Independent Business found that small-business optimism is at its highest levels in a year, crediting AI investment in chips and the structures that house them with spillover business opportunities.

The fight over data centers, meanwhile, has become a social and political flashpoint and, at times, embellished beyond what the record supports. Some backlash is earned. Most jobs promised are temporary. Resource demands are massive, and draining when mismanaged. Speculators have gamed interconnection queues and incentive programs, while both developers and policymakers have done a poor job communicating to the public. We heard these concerns from over 50 mayors leading cities that span the U.S. during our annual Yale Mayors College in March. 

Done well, though, these projects are a once-in-a-generation development opportunity for places ranging from underused farmland to urban brownfield sites. As Huang explained it: “This is the first time in probably the last century that we’re able to invest in sustainable energy, invest in improving our energy grid, securing our energy supply, reducing the cost of energy across the country.”

Local and federal responses

Opposition to data centers tends to concentrate at the county level because costs pool locally while benefits disperse. A county absorbs the water draw, the noise, the land conversion, and a share of the regional capacity bill. The compute serves users elsewhere, and the returns accrue to shareholders nowhere nearby. Every serious policy response attempts to move some portion........

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