Communities across the US are challenging new data center projects, questioning what they stand to gain and how much strain the facilities will put on local power grids and water supplies.
The November midterm elections brought new support for construction moratoriums in several major data center markets. Those pauses could delay hardware deployments and the retirements that follow, putting pressure on growth plans at companies that recently expanded into data center decommissioning.
Nine states in which governors or governors-elect have backed or imposed construction pauses account for 158.6 gigawatts of planned capacity, or 41% of the US development pipeline. The tally includes campaign pledges and pauses already in place. Texas accounts for 88.4 gigawatts, more than half the planned capacity in those nine states.
Post-election jitters
Shares of AI cloud provider CoreWeave fell 9.9% and Applied Digital shares fell 6.7% the day after the election, even as the S&P 500 gained 1.6%. Later that week, CoreWeave asked Texas Gov.-elect Gina Hinojosa’s transition team to work with the company on completing projects that already have permits and setting rules for future development.
Texas Gov. Greg Abbott had already directed the state’s environmental agency to stop issuing data center permits pending a review by the state’s power grid operator. Analysts had expected permitting to resume after the review, which was due to finish in December. Hinojosa takes office in January and campaigned for a broader moratorium while lawmakers give communities more say over construction.
Industry analysts say the prospect of a moratorium alone gives developers a reason to consider other states. They expect a short-term slowdown in Texas, followed by renewed growth.
The decommissioning outlook
Linda Li is chief strategy officer at Re-Teck, an IT asset disposition and electronics recycling company owned by Li-Tong Group, a Hong Kong-based firm that manages the recovery, reuse and recycling of electronic equipment. She expects the first substantial round of GPU-dense server retirements between 2026 and 2029, based on systems deployed from 2022 through 2024. She expects that equipment to come out in stages as operators switch to more power-efficient accelerators.
Commercial real estate services firm JLL puts the typical refresh cycle for GPUs, CPUs and networking infrastructure at about five years. In some AI applications, performance gains make GPU replacement economical after two to four years. That puts the first retirements from projects now awaiting permits beyond much of the 2026–29 window Li identified for equipment already in service.
In Georgia, Effingham County commissioners (near Savannah) voted Nov. 3 to defer a decision on OpenAI’s Project Camellia site plan until Nov. 17. Commissioners raised concerns about wetlands and noise protections for nearby homes. OpenAI plans to draw 3.2 gigawatts from Georgia Power in phases between 2028 and 2032.
In Ashburn, Virginia, Amazon Web Services told Loudoun County it intends to withdraw its data center application for the former George Washington University campus. Under a preliminary agreement announced Oct. 20, the county would fast-track rezoning for housing and mixed-use development on most of the property.
New York, meanwhile, is partway through a one-year data center moratorium Gov. Kathy Hochul passed over the summer. She was elected for another four years during the midterm election. There’s no immediate word on what will happen after the year passes, but some state legislators are calling for more restrictions, if not an outright ban.
Looking ahead, there is a great deal of uncertainty looming. The buildout is likely to slow as developers negotiate tougher terms with utilities and communities. Regulators are pressing companies to cover the cost of grid upgrades. Residents want commitments they can enforce on water use and noise, along with a clear account of what their towns stand to gain.
Some developers will have to redesign projects to win local support. Others will move them or drop them. The first wave of AI server retirements is still expected through 2029, based on equipment already in service. The outlook changes beyond that, as local decisions push back decommissioning work in some markets and shift it to others.
