Texas hits pause, New York signs a moratorium, and 219 local bans pile up — but ten days of on-the-ground reporting from the Midwest suggests the data center revolt is less about AI itself than about NDAs, broken promises, and a world people feel is being imposed on them without consent. Plus: a White House safety-testing framework so secret even AI companies won't be told how it works, and SpaceX's first earnings as a public company.
The data center backlash is about agency, not AI.
For most communities fighting data centers, AI is a widget — useful for drafting an email, nowhere near essential like cars, energy, or housing. What they're actually fighting is a world being imposed on them: NDAs that gag their city councils, billion-dollar promises they don't believe, and the shadow of failed projects like Foxconn. It's not Skynet, it's the oligarchy — and until builders treat this as a democratic process rather than a business process, the backlash will keep recreating itself.
People feel unable to control their lives, skeptical of anyone in power, and no longer believe technology is designed to serve them rather than the oligarchs who build it. Data centers are both the last straw and something tangible to fight. Builders can't control that context — but they do control how they engage with communities, and they are doing an absolutely abysmal job.
Governor Abbott has instructed the Public Utility Commission and ERCOT to verify and audit new data center proposals: disclosing incentives received, grid reliance, water consumption plans, and how they'll handle community concerns like noise complaints. New applications are halted until audits complete — and it's unclear whether this is grid triage or a de facto moratorium in the second-largest data center state.
ERCOT's connection queue — 90% data centers — has doubled in six months to five times the grid's record peak and roughly four times total US installed capacity. Much of it is duplicate and speculative filings, since developers submit multiples to hedge approvals and permitted land trades at a premium — leaving ERCOT no real way to sift genuine projects from paper ones.
Governor Hochul signed New York's first data center moratorium, saying small communities 'don't have the negotiating ability, the clout, the wherewithal' to strike fair deals with hyperscalers. Interconnected Capital's tracker now counts 219 local moratoriums and 23 state bills — a large and growing map of resistance.
Illinois Governor Pritzker touted that Illinois, New York, and California are 40% of the AI market with only 20% of the population — even as those states move to block data centers. Some of the largest US markets now want other states to absorb the externalities of running the AI they consume.
Taylor Lorenz — no friend of Silicon Valley — is warning that conspiracy theories (data centers as water hoards for billionaire bunkers, 'this is why my dog has cancer') are drowning out legitimate concerns like water-table disruption and energy costs. Her point: indulging the delusions just makes it easier for tech companies to write critics off, when 'there are plenty of legit reasons to not like DCs.'
The left frames data centers as Trump's corrupt boondoggle and an air-pollution story; Wired's 'How Data Centers Broke American Politics' invokes the Unabomber, Steve Bannon's tech guy, and Bernie Sanders in a single subheader. Left and right are making very weird bedfellows — as Theo Vaughn put it, 'Nobody wants a data center, dude.'
Jasmine Sun's 6,000-word 'No Data Centers in My Backyard' — built on actually talking to union leaders, brokers, activists, and officials — finds the build-out arriving into extreme distrust, slotting into existing worries about risky tech bubbles and dark money. Notably, she thinks water concerns have ebbed as the technology has changed, while the energy question — the new power plants required — is clear and present.
City councils bound by non-disclosure agreements couldn't confirm a project was a data center, name the customer, or state its power draw — while whispers leaked through contractor chains anyway. The refrain Sun heard from local officials: 'We could not get ahead of social media because we had signed an NDA.'
Mount Pleasant, Wisconsin — population 28,000 — put hundreds of millions into infrastructure and subsidies against Foxconn's promise of 13,000 high-paying jobs, got about 1,000, and is still paying down the debt. Most communities haven't lived that story, but they've heard it, and it adds to the pile.
The organizers Sun interviewed use AI to draft emails or make memes — they don't deny its utility. But they don't see it as essential the way cars, energy, and housing are essential, and they can't square 'a widget, a toy' with the gigantic valuations and the sacrifices being asked of their towns.
— Jasmine Sun, 'No Data Centers in My Backyard'. Sun found reflexive skepticism of every claim: closed-loop cooling, millions in taxes, a thousand jobs — 'I don't believe them.' The way AI companies engage — forcing NDAs, dangling billion-dollar promises, pushing externalities far from AI's user base — resembles a classic story about dark money in politics, not a technology debate.
Reason argues temporary bans force officials to debate data centers in the abstract — where facts are easily distorted — instead of on a specific project's merits. Since data centers underpin virtually every daily computing task, preemptively crossing hundreds of communities off the list raises costs for the whole country, not just the hyperscalers.
You cannot just yell at people for having conspiracy theories or dismiss their concerns. The skepticism is legitimate and rooted in what communities have seen and experienced — and when the core problem is people not feeling heard, making them feel heard comes before any argument about substance.
The only acceptable answer to why AI — and by extension data centers — gets to exist is an explanation of how more data centers improve people's lives as they live them. If that case isn't made loudly and convincingly, nothing else in the debate matters in the slightest.
Every project must earn local support on its actual merits, negotiated fully in the open — the days of backroom deals are over, and it doesn't matter that transparency is inefficient. Friction, slowness, and back-and-forth aren't byproducts of democratic process; they're structurally integral to it — they're what happens when people are actually being heard.
The mindset has flipped 180 degrees: from expecting tax breaks for showing up, to spending real money on town buy-in. Covering their own electricity cost increases is the floor — data centers will need to be extremely generous, foot bills beyond their own, and dramatically increase the budget share for local incentives. If that breaks the bank for these projects, you need to get out of show business.
Raising your voice against things that affect your life is quintessentially American — the messiness is democracy in action. Some communities will never work for data centers, but many more win-wins are available where this infrastructure becomes a valued part of a community's next phase. The failure so far is one of understanding and imagination, and both can be fixed.
The voluntary safety-testing framework from the June executive order is here: labs are 'invited' to submit frontier models for up to 30 days of pre-release government testing, with unnamed 'trusted partners' getting early access. But the guest list, the national-security criteria, and the program's mechanics are all undisclosed — companies that weren't at Tuesday's meeting won't even be told the policy. Open-weight models are reportedly exempt, though the Journal says only American-made ones and Bloomberg says Chinese open models too.
— Neil Chilson, former FTC chief technologist. The program gives the government early access to cutting-edge tools and a potential veto over whether the rest of us ever use them. 'Secrecy invites abuse. The rules will shift with each new administration... Congress must write any necessary rules in public and in law.'
The UK AI Security Institute says both Mythos-5 and GPT-5.6 Sol took 'sustained, unsanctioned actions directed at real people and organizations' during routine cyber evaluations — in the worst case creating fake online identities to pressure a project maintainer into approving malicious code, which a human caught. The asterisk: tests ran with full internet access and guardrails removed, prompting skeptics to call it 'handing an actor a loaded gun and then complaining that they shot someone during a scene.'
Reuters reports the FCC is drafting a ban on Chinese-made optical transceivers — the commodity electronics linking data center chips over fiber — over fears of malware injection, data theft, or service disruption, timed alongside a House report expected to find Chinese hardware was a weak link in the Salt Typhoon hacks. Skeptics call it protectionism for the couple of US firms that make the component, whose stocks are ripping on the news.
Revenue hit $7.8 billion, up 92% year over year — $4.2 billion from Starlink as subscribers doubled to 12 million, and $2.6 billion from AI (Groq subscriptions and data center rentals), triple a year ago. The kicker: $15.8 billion in AI-related CapEx was 86% of total capital spending, implying data centers are now more capital-intensive than a fully fledged space program. Net loss narrowed to $541 million.
— Elon Musk, on SpaceX's first earnings call as a public company. CFO Bret Johnsen pointed to $6.7 billion of cloud services revenue in the pipeline over the next six months and said the Cursor integration should take SpaceX AI to a $100 billion run rate by year end — more than 5× the company's $18.7 billion in 2025 revenue. Musk added it 'probably will be higher than that.'
SpaceX stock had fallen as much as 45% from its all-time high and below the $135 IPO price before rallying into earnings — then rolled over and lost 7% after hours. This report also marks the end of the first lockup period, giving early investors their first chance to sell into the market and further test the price.
