Don’t blame data centers for failed public policy

Data centers have become a kind of boogeyman among voters lately. Recent polling even suggests that new data center construction is less popular than the IRS. Only 27% of Americans at least somewhat favor new data center construction, according to Gallup. Meanwhile, YouGov found that 28% of Americans have a favorable view of the IRS.

This isn’t an apples-to-apples comparison, but anytime an industry polls worse than the IRS, it’s probably time to take stock in the situation. However, public sentiment might be missing the point. American data centers are a necessity in the digital age, but problems emerge when they are subsidized and the government doesn’t adequately police them. Put simply, many of the complaints about data centers are really complaints about government policies related to them.

By way of background, “Data centers are large facilities that host file servers and networking equipment to store, process, and analyze information – capabilities that are critical for the growing use of AI,” according to the Brookings Institution. In short, they enable us to enjoy the conveniences of a rapidly evolving digital world, but Georgians increasingly do not want them here.

Residents in Newnan, Marietta, Garden City, Forsyth and elsewhere have protested proposed data centers, pushed elected officials to reconsider approvals and made data center policy a hot topic in recent elections. Opposition depends on the individual. Yet the main arguments tend to center around data centers’ electricity and water consumption and residential ratepayers subsidizing those needs; the fact that data centers receive generous government handouts; concerns over their environmental impact; and they can be eyesores. These are legitimate concerns stemming from data center development, but government policy often determines who bears the costs.

To begin with, industrial customers, like data centers, enjoy lower electricity rates than residential customers – 6.7 cents per kilowatt-hour vs. about 15 cents – and large load industrial customers are even allowed to shop around for their preferred electric provider. Residential customers are not afforded that privilege and seem, at least on paper, to pay higher rates that benefit Big Industry. These unfair realities stem directly from government regulation.

There has been further concern that residential ratepayers may be required to shoulder much of the costs of building new power plants to support the proliferation of data centers. The Public Service Commission instituted a rule – with ample loopholes – against this, but rules can seemingly change on a whim, leaving Georgians worried.

Georgians have also been up in arms over the handouts that data centers have received from the state. “The policy has cost [Georgia] at least $1.5 billion in lost revenue since its inception, including nearly $500 million in fiscal year 2025 alone […] About 70% of data center investment in Georgia would likely have occurred regardless of the tax break,” GPB reported earlier this year. That is nothing short of a bad deal.

I sympathize with other Georgians who cry foul over the government picking winners and losers and forcing taxpayers to subsidize data centers. We shouldn’t be tasked with unnecessarily propping up industries. Similarly, everyday Georgians shouldn’t be on the hook for bankrolling water infrastructure development to benefit industry, although, as the Abundance Institute notes, fears that data centers will create a national water crisis appear vastly overblown.

I can also sympathize with those who don’t want a hulking data center built in their proverbial backyard. Homeowners worry that data centers could be noisy, result in light pollution and adversely affect property values. These are fair concerns, but again, the government controls zoning decisions to determine where data centers can be situated.

As for the environment, these concerns merit discussion. However, there are reams of federal environmental law, state and federal environmental protection agencies and a robust legal system to keep companies accountable or else they face costly lawsuits and fines. The appropriate response is careful oversight and enforcement, not treating data centers as inherently undesirable.

In many ways, they are critical infrastructure that help foster the e-commerce on which we rely, burgeoning AI technology and aid our government and military that develops advanced technology. And Americans should want them housed domestically.

Even the data centers with technology and data that may seem innocuous could be dangerous in the wrong hands. Relying on overseas data centers could subject them to the whims of foreign intelligence agencies – meaning the technologies and all your personal information could be accessed by America’s enemies.

The bottom line is that data centers are not evil. They are vital to our future, and over the long-run, we should want more of them built here. That said, there are myriad public policy failures related to them, which lawmakers have tried and failed to address. Until they do, data centers will continue taking the blame for misguided government regulations and remain as unpopular as the IRS.