Community opposition helped block $170B in data center projects, report finds

A new report has found that concerns about transparency in data center development have helped scuttle numerous projects over the past couple of years.

The report from Carbon Direct, an energy and climate solutions company, found that, between Jan. 2024 and May 2026, at least 46 artificial intelligence data center projects in 20 states across the United States worth a total of $170 billion were publicly delayed or cancelled after community opposition.

A lack of transparency around those data center projects was cited as the most common reason for them to be abandoned. That lack of transparency includes whether elected officials have signed nondisclosure agreements, who owns the project, complex ownership structures and those projects’ impacts on water and power. Being open with residents early in the process is crucial to overcome that perception, experts said.

"Developers who treat community engagement as a permitting formality are burdening communities and breaking trust, and it is costing them billions in capital and future opportunities," Grant Gutierrez, head of community impacts at Carbon Direct, said in a statement. "By the time formal permitting begins, the political fate of a project is already largely set. Developers and capital partners who treat responsible community engagement as a foundational input, the same way they treat site selection, grid access, and financing, are the ones most likely to see their projects reach operation."

Residents have increasingly fought back against data center projects in their communities, with projects now being abandoned or delayed in numerous states. It caught the attention of political leaders too, as New York Gov. Kathy Hochul announced a first-in-the-nation statewide moratorium on hyperscale data centers, while Ohio had been on track for a statewide ballot initiative this fall before organizers pushed those plans to next year.

And Carbon Direct identified several patterns in its analysis of the 49 stalled or cancelled projects. In addition to lack of transparency being the “single most reliable driver of fast-forming, durable opposition,” the group said it identified six distinct mechanisms through which local opposition to data center projects organize.

Those mechanisms are a staff veto led by professional planners; broadly distributed civic opposition in a conservative, rural area that organizes quickly; opposition anchored by non-governmental organizations; conservation groups that come together against a co-located power generation facility; dedicated organization that comes together within days; and an opposition coalition led in part by local celebrities who bring attention to the matter.

Carbon Direct also found that local opposition consistently triggers broader policy changes that reshape development conditions in nearby jurisdictions. And it found that when communities mobilize to oppose a project, they consistently widen it from being about a single site to larger regional or statewide concerns, including on the electric grid. The group also noted that state preemption and local governments’ powerlessness to prevent projects can play a role.

In response to that opposition, Carbon Direct called on data center developers and investors to take several steps, such as developing a framework for responsible community engagement. That framework should include involving local communities in development decisions, prioritizing local needs and structuring data center development to create genuine and measurable positive impact.

The report also said site selection should come after the developers have taken the community’s temperature, not before, while transparency should be treated as a “siting strategy, not a legal afterthought.” Projects involving NDAs, unclear ownership and undisclosed end users consistently faced sharper and faster-organizing opposition than projects with named tenants from the outset, it found.

Carbon Direct also called on developers to engage early with civic organizations and infrastructure, and design community benefits agreements to each community’s specific local priorities. Those benefits agreements, which can take many forms, should be structured before any application is made, not negotiated under the pressure and microscope of public hearings. Permitting history from nearby localities should also be tracked as an indicator of how risky projects might be.

And the desire for transparency around data center development appears to be reflected in recent polling. A July survey conducted by the Americans for Responsible Innovation trade group and intelligence company Morning Consult found that 71% of respondents said data centers need stronger rules or limits on construction, and 77% were concerned about deals being made without any public input. The survey found that people were concerned about higher water and electricity prices, noise and hidden taxpayer subsidies, while 80% said they support the disclosure of deals being made between localities and data center developers.

“The biggest concern Americans have regarding data centers is that they’re being shut out of the conversation over the future of their community,” ARI President Brad Carson said in a statement. “Data centers projects are using NDAs, negotiating tax subsidies behind closed doors, and displacing energy costs all with little to no voter input. Data centers can bring benefits to communities, but residents must be able to trust that their everyday lives won’t be harmed by these buildouts. Transparency and strong guardrails are key to ensuring that communities have the information they need to engage with local leaders on this issue.”