The great American data center divide

The issue is awkward for President Donald Trump and his party. Republican strategists are increasingly wary that the administration’s support for AI could trigger a backlash among key voter blocs, including farming communities, ahead of November’s midterm elections. Around 78 percent of US counties dependent on agriculture voted for him in 2024, according to analysis of election data by Investigate Midwest. In rural areas from Illinois to West Virginia, new data center proposals have led to packed public meetings and organized opposition as residents push back. In Indiana, shots were fired at a local lawmaker’s home and a note left on his doorstep reading “no data centers.” Democratic politicians have called for tighter regulation, and Republicans in several states have campaigned against new developments, reflecting the backlash. Even in solidly Republican Texas, agriculture commissioner Sid Miller has argued that projects should be directed towards less productive land, warning that the “unchecked spread of data centers onto prime farm and ranch land is a real and growing threat to our food supply.” Credit: Financial Times Credit: Financial Times America’s tech giants are relying on willing farmers like Walters as they race to build the backbone of the AI revolution they believe will transform productivity and deliver big financial returns. Data centers have already emerged as a significant driver of economic expansion in the US, accounting for 80 percent of private sector growth in the first half of 2025, according to S&P Global. The rush for sites is beginning to reshape land markets, but often in highly specific pockets that are well connected to electricity grids. “Anywhere there’s a path to power… that’s where data center developers are flocking,” says Jason Bell of real estate group JLL. He notes that land with sufficient capacity, for example in New Jersey, can sell for five to 10 times more than similar land without power access but that there is a wide range of estimates. Curt Covington, a senior director at land financing group AgAmerica, agrees that developers are often “bidding up the price” for farmland. He adds that while some farmers will not dream of selling land they have worked for generations, others take a more pragmatic view if they are situated in would-be development corridors. “If [they] can get 1.5 times what this property is worth… they’ll part with their land.” Credit: Financial Times Credit: Financial Times But the data centers of today are not the colossal data centers planned for tomorrow. Researchers at the Lawrence Berkeley Laboratory forecast that so-called hyperscaler data centers will consume anywhere between 60 billion and 124 billion liters (16 billion and 33 billion gallons) of water on-site each year in 2028. This figure excludes the indirect water use tied to electricity generation, which the lab previously forecast could be as much as 12 times higher than direct consumption. It is numbers like these that have people up in arms in the mountains of Tucker County, West Virginia. There, a complex of gas-powered data centers has been proposed near the small town of Davis. Residents have filed “literally hundreds” of comment letters and petitions with state agencies, according to Kotcon of the West Virginia chapter of the Sierra Club. Tucker County sits high on the ridge, with no rivers flowing into it and limited water storage. The town’s treatment plant can produce about 250,000 gallons a day and, Kotcon says, ran dry during a recent drought, forcing farmers to rely on the local fire department to truck in water to keep their cattle alive. Against that backdrop, the prospect of a single large data center requiring “millions of gallons a day,” several times what the plant in Davis can produce even in optimal weather, has become a focal point for increasingly bitter opposition. “When the well runs dry, we learn the value of water,” Kotcon says. Data center operators are pushing back against protests by stressing the growing efficiencies at their facilities. The most frequently touted is the introduction of “closed loop” systems. These pump coolant through pipes to dissipate heat from servers rather than evaporating water as has been the case in the past. Chipmaker Nvidia says it has also developed more energy-efficient chips that require even less cooling. Credit: Financial Times Credit: Financial Times But industry executives argue that the trade-off between water and energy is often misunderstood. Doug Adams of NTT Global Data Centers, the world’s third-largest data center operator, says closed-loop systems can reduce overall energy demand. “It’s more costly to build up front, but in the long run it’s more efficient to use [coolant] to evacuate heat,” he says. OpenAI chief Sam Altman—whose start-up has committed to spend $600 billion on infrastructure by the end of 2030, according to people familiar with the matter—recently bristled at the suggestion that data centers consume huge amounts of water. Appearing at the India AI summit in February, he said that concerns about AI’s water consumption were “totally fake,” arguing that evaporative cooling was a problem of the past. Yet the sheer scale of the projects planned for the next five years by hyperscalers and others means that water consumption is expected to surge. Compounding fears is a suspicion that AI facilities are driving up energy prices. On average, American bill payers—including residential, commercial, and industrial customers—paid over 6 percent more for electricity year on year at the end of 2025. This increase was starkly higher in the mid-Atlantic states that house a large number of data centers, such as Pennsylvania and Virginia, where bills rose by 19 and 10 percent, respectively. Of the roughly 100GW of additional electricity capacity that the US is projected to need at peak times by 2030, roughly half will be used by data centers, according to the Department of Energy. In Illinois, Deppert says rising energy demand is feeding into already tight margins for farmers. “Everything we do is energy intensive,” he says. “If those costs keep going up, that comes straight off the bottom line.” Tech executives have sought to allay such fears, committing last month to “build, bring, or buy new-generation capacity for data centers and pay the full cost of infrastructure upgrades required to support their operations.” Increasingly, however, popular resistance is having an impact. Amazon was forced to abandon a proposed data center project in Tucson, Arizona, after residents raised concerns over water and energy use, while Microsoft faced opposition in Caledonia, Wisconsin, over similar issues. Small towns across the US are also skeptical of the industry’s promised economic benefits. “Technology companies talk about a sense of urgency. This is only the case because they’re in an arms race,” says Jonathan Koomey, a former project scientist at Berkeley Lab. “Is there a social urgency? I’m not sure there is one.” © 2026 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.