California’s data center boom is barreling forward, and Southern California communities are increasingly finding themselves caught between the promise of economic development and the reality of unwanted change arriving in their backyards. The question now facing the tech industry — and the state — is whether that growth can happen in a way that doesn’t further erode public trust.
A recent Reuters/Ipsos poll found that only one in three Americans approves of the current pace of data center construction, and most people say they would oppose one being built near their own neighborhood. That wariness lines up with polling from Gallup showing confidence in Big Tech companies has sunk to historic lows.
These concerns matter, not because the data center construction wave can be stopped, but because it clearly can’t. More than 800 data centers are currently under construction nationwide, and the biggest tech companies are pouring hundreds of billions of dollars a year into expanding artificial intelligence infrastructure. Analysts at McKinsey & Company estimate that global investment in data centers could approach $7 trillion by the end of the decade.
That combination — a massive infrastructure buildout paired with deep public skepticism — creates a real test for the industry. If tech companies want communities, including many across the Inland Empire and greater Southern California, to accept these sprawling facilities, they’ll need to change how they operate: opening up their planning processes, making sure host communities actually benefit, and speeding up the shift to clean energy instead of leaning harder on fossil fuels.
As USC engineer Charles Zukoski, who hosts the “Electric Futures” podcast, puts it, “Social license isn’t free.” Communities don’t automatically sign off on massive infrastructure projects just because a company wants to build them.
Yet that’s often exactly how it plays out. Developers frequently spend years quietly planning projects behind nondisclosure agreements, and residents only learn what’s headed their way once plans are already far along — at which point opposition tends to flare up fast. From a resident’s point of view, those NDAs might as well stand for “No Data centers Allowed.”
Earning real trust means bringing communities into the conversation well before permit applications hit a planning commission’s desk. People deserve straight answers about how much electricity and water a project will use, what it will mean for local traffic, what tax revenue it might generate, and what jobs — if any — will actually materialize.
Microsoft has already dropped its practice of requiring NDAs from local government officials during parts of its site-selection process. Other tech giants would do well to follow suit.
Transparency alone isn’t enough, though. Host communities also deserve a fair share of the economic upside these projects promise.
Tom Steyer, who once ran for California governor, has floated a “token tax” on corporate AI use, with revenue funding direct payments to residents and job training — modeled loosely on Alaska’s Permanent Fund, which distributes oil revenue to residents. That idea remains theoretical in California, but Virginia has already moved in a similar direction: since July 1, it has taxed electricity used by data centers at 1.1 cents per kilowatt-hour, a policy expected to bring in as much as $600 million a year. For now, that money goes into Virginia’s general fund rather than directly to residents, so it remains to be seen whether local communities will actually feel the benefit.
Then there’s the energy question. The International Energy Agency projects that global electricity use from data centers will more than double between 2024 and 2030 — an increase roughly equivalent to Japan’s entire current electricity demand. Right now, more than half the power running U.S. data centers comes from fossil fuels, with natural gas as the single biggest source.
That same surging demand, though, could become one of the most powerful forces pushing clean energy forward. Long-term power purchase agreements tied to data centers can help finance new wind, solar, geothermal, advanced nuclear and battery storage projects that might otherwise have trouble finding investors.
If tech companies pair their AI infrastructure buildout with investment in transmission upgrades, energy efficiency and carbon-free power generation, data centers could end up strengthening the nation’s electric grid rather than simply straining it.
This moment offers the tech industry a genuine chance to repair its standing with the public. By engaging communities early, distributing the benefits of growth more fairly, and driving a real transition to clean energy, the industry can prove that technological progress and community wellbeing don’t have to be at odds.
There’s still time to get this right — but not forever.
Original source: CalMatters
