The late-summer revolt against data centers is rattling parts of the tech sector, which fears the industry is bungling a political crisis that could shadow it well into 2028.
In recent weeks, politicians spanning the spectrum — Republican Texas Gov. Greg Abbott, Democratic Pennsylvania Gov. Josh Shapiro, and Michigan GOP Senate nominee Mike Rogers — have all embraced curbs on data center construction after initially courting the projects as economic development wins, reported Politico.
The backlash echoes what's playing out on the ground in Texas, where the same anger over data centers is fueling the "Break Rank" movement — lifelong Republicans and conservative independents who told the Washington Post they're willing to cross party lines this November specifically because Abbott has been too cozy with the industry.
That grassroots revolt helps explain why Abbott himself just paused approval of new data center buildouts pending audits of tax breaks, ownership and water use.
Some tech industry advocates insist the pushback is a fleeting, election-year wedge issue that will cool after the midterms, while others warn that's dangerously naive.
“Some are viewing it as an ‘oh s---’ moment,” one AI industry advocate told Politico. “Others are brushing it off like it’s nothing, and those people have to get their heads out of their asses. This could go south for them, fast.”
Shapiro signed an executive order requiring local community approval for data center permits, despite previously luring tens of billions in investment from Amazon, Microsoft and Google.
Eight states enacted legislation rolling back data center tax subsidies this year, with 17 more considering similar bills.
Even Virginia, the world's data center capital, added a consumption tax on their energy use.
The industry's messaging has struggled to keep pace, a failure Republicans are now openly worried about, too — an NRSC memo warned that the "toxic brand" around AI data centers is hurting GOP Sen. Jon Husted's Ohio re-election bid.
Some, like Meta's Mark Zuckerberg with his $1 billion community investment fund, are trying to get ahead of it. Others remain stuck in finger-pointing between AI labs, developers and utilities.
“Data centers are very clearly on the ballot box this election cycle,” said James Maloney, founder and managing partner of Tiger Hill Partners. “This is not lost on the investment firms.”