Data center boom sparks bipartisan backlash despite economic boost

President Trump praised data centers as economic drivers, but local opposition is bipartisan, with both parties objecting on property and environmental grounds. Data center investment now accounts for about 1.4% of U.S. GDP, making it the largest driver of private investment growth. However, with midterms approaching, candidates are distancing themselves from the issue due to community backlash.

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The economic footprint is substantial but uneven. Data center investment reached 1.4% of U.S. GDP in early 2026, doubling from the prior year, and information-processing equipment accounted for 39% of total GDP growth through late 2025—surpassing consumer spending's contribution for the first time. Yet local job creation remains thin: a $10 billion Indiana campus employs over 4,000 during construction but only about 300 permanently, and Virginia research shows one lasting position per $54 million invested.

The fiscal picture is similarly mixed. At least ten states forfeit more than $100 million annually through data center tax incentives, while communities bear power and infrastructure costs. Nearly 200 economists have warned that AI-driven automation could displace workers