AI Demand, Public Opposition Complicate Data Center Builds
Developers of data centers are encountering significant new obstacles, including stronger public opposition, stricter local planning, and the complex technical demands of AI workloads.
The development of data centers is facing growing complexity and opposition, creating significant hurdles for a sector critical to the expansion of AI and cloud computing. According to one report, project cancellations in the US rose from six in 2024 to 25 in 2025, with an additional 20 projects worth $42 billion halted in early 2026 due to local resistance. This pushback, focused on noise, energy, and water use, is leading to more restrictive zoning and planning conditions.
Sophisticated counsel and their clients care because these challenges introduce substantial risk, cost, and delay into development timelines. The technical demands of AI are also transforming the construction and contracting phases, requiring cooling, power, and structural specifications for high-density computing from the outset. Lease agreements are evolving into complex hybrid real estate and technology service agreements.
Developers must now place a greater emphasis on early community and stakeholder engagement to secure project approvals. Contracts and leases must be drafted with greater flexibility to anticipate faster technology refresh cycles and to mitigate a growing risk of construction and technical disputes.