Hyperscale data centers have emerged as the symbol of everything Americans distrust about AI – from the unbridled power of Big Tech to rampant degradation of our natural environment. If you’re alarmed by these massive facilities popping up in your back yard, don’t overlook the chip factories setting up across the street.
A data center is essentially a warehouse full of computer chips. Large data centers contain more than 45 million chips. So every new data center is driving the production of more chips. The overwhelming majority of memory chips that are made this year will end up in data centers, and while most are still produced in Asia, more and more of them are made in the US.
That means the AI boom is coming to your state, not just through the local data center, but also in the form of new semiconductor factories. Investors are spending more than $820 billion dollars to build 160 semiconductor manufacturing projects in 30 states. Many of these facilities are massive – larger than all but the biggest hyperscale data centers – and have comparable impacts on local communities.
If you thought the water consumption of data centers was bad, for example, chip production uses even more water, with some fabs guzzling 17 million gallons a day. This is particularly worrying given that the emerging semiconductor manufacturing hubs are the drought-prone states of Arizona and Texas.
Or if you’re alarmed by the fossil fuel appetite of data centers, semiconductor factories also use massive amounts of electricity. In New York, the state concluded that Micron’s new facility (under construction near Syracuse) would exceed the state’s greenhouse gas limits, but was justified because it serves national security.
Concerned about the cost of data centers to taxpayers? While both data centers and chip-makers have persuaded state and local governments to give them tax breaks and other subsidies, chip producers benefit from the largest industrial policy in US history, including a lucrative tax refund that will cost the US over $200 billion. Intel received more than $1.9 billion from Ohio taxpayers and Micron scored $6.6 billion from New York taxpayers.
Frustrated by the lack of democracy in these massive projects? Perhaps the thing that riles people up the most about data centers is the realization that you have been deliberately excluded from decisions that impact your life. One minute your biggest worry is paying your bills and checking off items on your to-do list. The next, construction vehicles are transforming a nearby field into a massive high-tech facility that drives up your utility bills and threatens to pollute your air and water.
The same thing happens with chips. Economic development officials collude with corporate bigwigs behind closed doors, often using nondisclosure agreements to ensure quid pro quos stay hidden. In many cases, the public only grasps the magnitude of the changes headed for their neighborhood long after the deals have been made.
Policy-makers and industry executives are teaming up to make it even harder for us to learn the impact of these projects. In 2024, Congress exempted most semiconductor factories from federal environmental review, eliminating one of the few levers of accountability for new industrial facilities. The next year, California lawmakers exempted all advanced manufacturing in the state from environmental review, allowing data centers and semiconductor factories to avoid public scrutiny. One of the president’s executive orders calls for lower accountability and weaker regulations for both data centers and chip factories.
No wonder we’re furious. The AI boom is exacerbating economic inequality, eroding our democracy, and destroying our environment.
Needless to say, we live in a world that requires semiconductors and data storage. The solution isn’t to turn back the clock to an earlier time. But racing towards our high tech future without regard for the social and environmental impacts is unleashing a bipartisan tidal wave of rage. With good reason.
Can we get some seat belts for the AI rollercoaster?
Just as public advocacy forced slaughterhouses to adopt food safety laws and car makers to install seatbelts, communities today are demanding the tech giants listen to their concerns and take action. If chip makers or data centers want access to public resources – electricity, water, land, and our transportation system – let alone tax breaks and public subsidies, we have every right to demand that they use renewable energy, recycle their water, scrub chemicals from air and water emissions, protect farmland and open space, pay workers decent wages, and allow employees to join a union.
Ultimately, communities should have the power to decide if and where they want data centers and semiconductor factories, set common-sense guardrails on energy and water use, and negotiate community benefits agreements with corporations.
In the end, managing the AI build-out is not a technical question of land use and zoning ordinances. It’s a question of democracy. Do corporations get to do whatever they want, over public objection? Or do ordinary people get a voice in decisions that affect our daily lives? If we stand together and speak out, we can determine the answer.
