Data center fights put new pressure on state and local politicians

Data center projects are becoming political flashpoints as companies seek more computing capacity for artificial intelligence and other online services. The fights matter because they pit promised investment and tax revenue against local worries about water, electricity, land use and public control.

Lauren Mullenbach, a University of Michigan scholar of environmental justice and urban land use, wrote in The Conversation that Michigan shows how many interests now collide around these projects. Citing Gander Newsroom, she said more than 30 data centers of different sizes have been proposed in the state over the past two years.

Michigan Gov. Gretchen Whitmer has backed efforts to attract technology companies, according to Mullenbach, including appearances with company executives at proposed data center sites that drew criticism reported by Planet Detroit. State lawmakers have also tried to make Michigan more appealing to the industry by approving sales and use tax exemptions for data center operators, Mullenbach wrote.

Water and power concerns drive opposition

Local resistance has focused on the resources data centers need to run. In one Michigan case, the Ypsilanti Community Utilities Authority told the state it would not provide cooling water for a proposed University of Michigan and Los Alamos National Laboratory data center within its service area, according to Planet Detroit and university materials cited by Mullenbach.

The University of Michigan then proposed another location in nearby Superior Township, Mullenbach wrote. That township runs its own water system but buys water from the Ypsilanti Community Utilities Authority and Ann Arbor Township, according to Superior Township information cited in her account.

Electricity demand is another concern. Mullenbach cited a Bridge Michigan report saying a Google data center proposal in Van Buren Township would require 2.7 gigawatts of electricity, an amount the report compared with demand from about 2 million homes.

Utilities can have strong financial reasons to support new data center customers, Mullenbach wrote. She said regulated power companies often earn profits from building new plants, substations, transformers and power lines, then recovering those costs from customers with an approved return.

Local officials see revenue, residents see costs

Community leaders often support data center permits or zoning changes because companies promise jobs and new tax revenue, Mullenbach wrote, though she cited Bridge Michigan reporting that data centers do not create many jobs. For smaller towns with limited options, she said, property tax revenue can still be attractive.

Residents have raised objections over noise, land use, water consumption, electricity demand and possible costs shifted to ratepayers or taxpayers, Mullenbach wrote. She said those concerns are being aired through public hearings, ordinance debates and elections, even as technology companies and allied interests bring considerable influence to the process.

The political risk has already surfaced outside Michigan. In June 2026, Utah voters unseated state Senate President Stuart Adams, a longtime legislative leader who had helped secure approval for a large data center in the northwestern part of the state, according to The Christian Science Monitor account cited by Mullenbach.

Mullenbach wrote that some local officials oppose data centers but feel they have limited power to halt or slow projects, including in Ypsilanti Township and Saline Township. In the end, she said, data center decisions depend on how public officials weigh company demands, utility interests, local finances and public opposition.

This story draws on original reporting from Fortune.