JPMorgan Asset Management Global Market Strategist Stephanie Aliaga warned that mounting opposition could mean longer negotiations, higher costs and further delays.
- Aliaga noted that the backlash against data centers has been building for months, with concerns ranging from rising electricity bills and water consumption to pressure on already strained power grids.
- The issue also emerged as a political flashpoint during the midterm elections. Democrats won governorships in major data center markets.
- Aliaga also highlighted that the scale of opposition is growing, noting that data analytics firm Wood Mackenzie counted more than 400 state and local moratorium actions since January 2026.
The artificial intelligence infrastructure boom is running into an unexpected obstacle, which is growing public opposition to data centers. As communities push back against the facilities powering the AI revolution, political resistance could complicate expansion plans for some of the world’s biggest technology companies.
In a new note, JPMorgan Asset Management Global Market Strategist Stephanie Aliaga warned that mounting opposition could mean longer negotiations, higher costs, and further delays for data center developers, a problem that extends beyond just the leader in this segment, Nvidia Corp. (NVDA).
Data Center Backlash Gains Political Momentum
Aliaga noted that the backlash against data centers has been building for months, with concerns ranging from rising electricity bills and water consumption to pressure on already strained power grids.
The issue also emerged as a political flashpoint during the midterm elections. Democrats won governorships in major data center markets, including Texas and Ohio, after campaigning on promises of moratoriums or tougher development requirements. Communities across the country also backed restrictions on new projects.
Aliaga also highlighted that the scale of opposition is growing, noting that data analytics firm Wood Mackenzie counted more than 400 state and local moratorium actions since January 2026, compared with just 45 throughout 2023-2025.
However, JPMorgan cautioned against interpreting the political pushback as an immediate threat to the entire AI infrastructure boom. “More bark than bite, so far,” Aliaga wrote.
Many restrictions remain temporary, while statewide moratorium proposals have struggled to advance. Of 16 states that considered such legislation, only one passed a bill through its legislature, she added.
Meanwhile, data center capacity under construction grew nearly 50% in the first half of 2026, underscoring that investment momentum remains strong.
There are also powerful economic incentives for local governments to welcome development, she added, citing a study by the U.S. Chamber of Commerce that estimates that a mid-sized 50-megawatt data center generates nearly $700 million in annual state GDP and supports more than 5,200 jobs during construction.
JPMorgan Sees A Potential Shakeout In AI Infrastructure
The bigger concern may not be projects already underway, but the next wave of data center development, Aliaga said.
“The buildout from 2028 onward is most exposed,” she noted, warning that future projects face greater uncertainty around permitting, power availability and financing.
Developers may increasingly have to negotiate community benefits, guarantee that households won’t bear additional grid costs and explore dedicated power generation. Aliaga highlighted that Amazon.com Inc. (AMZN) and Alphabet Inc.’s (GOOG, GOOGL) Google have each announced roughly $1 billion in community investment initiatives, reflecting the growing importance of securing local support.
These arrangements could help win over residents, but they also risk increasing costs and prolonging negotiations, she said.
Aliaga added that the scale of the proposed pipeline makes the issue particularly important. Wood Mackenzie estimates that the U.S. has more than 430 gigawatts of announced data center capacity, but only 59% is under active development, including projects already under construction.
JPMorgan believes tougher development requirements could accelerate the elimination of speculative projects, potentially benefiting well-capitalized hyperscalers and developers with stronger economics.
Investment could also shift toward states and international markets that offer a more welcoming regulatory environment, the firm said.
Aliaga believes that ultimately, AI adoption, monetization and access to capital will remain the primary drivers of investment. But how developers and policymakers resolve the growing infrastructure conflict could determine whether the next phase of the AI boom is constrained by energy shortages or enabled by energy abundance.
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