Since 2024, nearly 160 data center projects across the United States have been paused or canceled. Industry trackers say the cause isn’t a shortage of capital or demand. It’s local permission. POLITICO’s Surge newsletter reported Tuesday that community opposition has become a leading drag on the buildout, with potential consequences for artificial intelligence development.
A Permission Problem
Dan Thompson, an analyst with 451 Research at S&P Global Energy, said the “social license to operate” has become a key issue for data center development over the last eight to 10 months. He estimated that roughly two-thirds of the projects tracked by S&P Global face some kind of delay, citing community pushback and pending legislation. “This is considered a key risk for projects that are in flight,” Thompson said on a webinar last week. “It’s across the country that we’re seeing this.”
S&P Global tracks 157 projects that have been paused, severely delayed or canceled. Stefanie Williams, a 451 Research associate director, said delayed projects typically haven’t finished permitting and are running into local resistance to rezoning.
The politics cross party lines. Opposition has surfaced in conservative Texas, liberal New York and swing-state Pennsylvania, all of which have enacted measures in recent months to curb the boom. Voters are raising concerns about electricity and water use as the country heads into next month’s midterm elections. Meanwhile, the Senate’s permitting reform bill includes provisions requiring data centers to pay for grid upgrades.
What Delay Costs
Time is money in this business. Developers often wait for permits before ordering equipment and signing power supply agreements, and the wait for gear like transformers and turbines can stretch to five years. A zoning fight at the front end can ripple through an entire project schedule.
Some developers are voting with their feet. Williams said they’re moving projects to communities more amenable to construction. In Iowa, Google initially planned a $1 billion data center in Linn County. After the county adopted data center regulations, the company asked for its site to be annexed by a neighboring community with more lenient rules.
Whether data centers actually push up local prices isn’t settled. Tony Lenoir, associate director at 451 Research, said it depends on the structure of power contracts and the amount of local grid upgrades required. “It’s a revolution within a revolution, if you will, and that is one of the core tensions we are dealing with today,” he said. A Utah State University poll found opposition grew the closer a hypothetical data center sat to a respondent’s home, though some opponents object to AI and its developers regardless of location.
Demand Keeps Climbing
The slowdown hasn’t dented the long-range forecast. 451 Research projects power demand from U.S. computing hubs will triple by the end of the decade, rising from 50 gigawatts last year to 154 GW by 2030. That figure reflects projects in mid-to-late development. Williams said a key question is whether political leaders follow through on pledges to limit construction after the midterms. “It could be a question of watching what happens in the coming year,” she said.
Energy Policy Elsewhere
The same newsletter carried a pointed message from the private sector on energy policy stability. Engie CEO Catherine MacGregor said at POLITICO’s competitiveness summit in Paris that she isn’t worried about a European LNG shortage. “By letting the market operate, we are able to continue importing and attracting LNG cargo ships to support this refueling,” she said, adding that gas storage stood at 86% in France and 74% across the EU. She warned that governments shouldn’t shift back and forth on energy policy and decarbonization targets if they want investors: “Without trust, we cannot invest.” Her comments followed French Prime Minister Sébastien Lecornu’s proposal to reverse a number of renewable energy contracts, saying subsidies for green energy projects, particularly solar panels, were a major financial burden for the state.
In Australia, Resources Minister Madeleine King is introducing a bill that would require up to 20% of LNG exports to be kept for local consumption. Australia has no current limit on shipments abroad. The Greens and independent Sen. David Pocock favor a gas tax instead. King rejected a tax, saying it could disrupt two-way trade with Asian partners: “Our exports of gas and coal support the energy security of Japan, South Korea, Malaysia and Singapore, while their refining of liquid fuels like petrol, diesel and aviation fuel keep Australians moving.”
The International Renewable Energy Agency’s new outlook offered its own numbers. Under its scenario, annual grid investments would need to rise from $500 million today to $1 trillion by 2035, and about $10.3 trillion would be needed each year for the transition. The agency noted that data centers can “grow faster than power-system infrastructure.”
Australian climate officials face pressure to trim their internal budget, with funding expected to fall to $747 million in fiscal 2028 from $1.09 billion in the current financial year. In Texas, Corpus Christi’s long-promised desalination plant for the oil and gas industry never materialized, leaving the city close to a water-supply crisis amid a drought.
Why This Matters: The data center slowdown shows how much of America’s AI ambition rests on ordinary things: zoning boards, permits and local consent. Roughly two-thirds of tracked projects face delays, and equipment waits of up to five years mean a stalled approval can cost far more than the paperwork suggests. Yet demand is projected to triple by 2030, so pressure on the grid won’t ease. The Senate’s proposal to make data centers pay for grid upgrades points toward a market-style answer: let the builders who create the load carry its cost. Meanwhile, MacGregor’s warning that investors need trust, not policy whiplash, applies well beyond Europe. After the midterms, whether officials follow through on their pledges will tell developers where to build, and where not to.