Data Centers Become an Emerging Election Issue, With Major Implications for Construction

Data centers are rapidly becoming the physical backbone of the artificial intelligence economy, but the massive, windowless facilities packed with servers are also emerging as a political liability in communities across the country. A Gallup poll earlier this year found that roughly seven in 10 Americans oppose the construction of an AI data center in their local area. Concerns over electricity demand, water consumption, noise, environmental impacts, tax incentives and the effect on utility rates are fueling opposition and giving candidates an increasingly potent local issue.

The backlash is beginning to cross party lines. In Michigan, Democratic Senate nominee Abdul El-Sayed has called for stronger government oversight, saying he supports state and local officials who believe additional data centers should not be approved without federal guardrails.

In Ohio, Republican gubernatorial nominee Vivek Ramaswamy has also moved to capitalize on opposition to large-scale data center development. His “Ohioans-first data center pledge” calls for legislation governing the industry and, until those policies are enacted, a moratorium on new data center construction.

The growing political debate could have significant consequences for the construction industry.  Data center development has become one of the largest sources of new construction activity in many markets. Projects require substantial amounts of electrical, mechanical, plumbing, HVAC, concrete, steel, communications and specialized infrastructure work. For contractors and subcontractors, the continued expansion of AI and cloud computing represents a significant pipeline of work. Data center projects can support thousands of construction jobs during development and require specialized trades and suppliers throughout the building process.

That opportunity, however, increasingly comes with political and regulatory uncertainty. Local opposition can delay permitting, increase project costs or force developers to modify projects. Moratoriums or new restrictions could slow the pace of development, affecting not only data center operators but also the contractors, subcontractors, engineers, equipment suppliers and skilled workers supporting the projects.

Much of the political opposition centers on the amount of electricity required to operate large data centers. Communities are increasingly asking who will pay for the new generation, transmission and distribution infrastructure needed to serve them—and whether residential and small-business customers could ultimately bear some of those costs. That debate creates another important issue for construction. Expanding the electric grid to accommodate data center demand requires additional generation, transmission lines, substations and other infrastructure, creating potentially significant opportunities for electrical contractors and other specialty trades.

At the same time, concerns about grid capacity could lead policymakers to impose requirements on developers, including investments in new infrastructure, limits on energy consumption or requirements for dedicated power resources.

Data centers could become an increasingly important issue in the 2026 elections, particularly in states and communities experiencing rapid development. Candidates on both sides of the political spectrum have an incentive to present themselves as protecting local communities from unwanted development while addressing concerns about electricity costs, water use and infrastructure. The challenge for policymakers will be balancing those concerns against the economic benefits associated with data centers, including construction activity, jobs, tax revenue and the infrastructure investment needed to support the next generation of technology. 

For the construction industry, the stakes are significant. A continued data center building boom could provide a substantial source of work at a time when demand for skilled construction labor is already high. But growing political opposition could make the permitting and development environment more complicated.

As data centers move from being primarily a technology and economic-development issue to an election issue, the outcome of the political debate could directly influence one of the construction industry’s most important sources of future growth.