US Cities Impose Temporary Data-Center Restrictions as Local Opposition Builds
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Raleigh, San Francisco and Oakland imposed temporary restrictions on data-center development on 6 October, while opposition is also affecting proposed AI infrastructure in Memphis and Utah. The measures reflect growing concern over power demand, water use, electricity tariffs and environmental impacts.
- Raleigh introduced a six-month data-center development moratorium, while San Francisco and Oakland each adopted 45-day pauses.
- Local opposition is focused on power demand, water use, electricity prices, pollution and environmental impacts.
- A planned Utah AI campus associated with Kevin O'Leary is expected to require about 9 GW of power; it remains a planned project.
- S1 cites Heatmap News estimates of at least $260 billion in cancelled planned investment and about $1 trillion of projects facing local resistance.
- Temporary municipal restrictions may increase permitting and site-development risk rather than constitute final project cancellations.
Local and political resistance to US data-center development is intensifying, creating a growing execution risk for AI infrastructure projects that depend on large power and water commitments.
On 6 October, Raleigh adopted a six-month moratorium on data-center development. San Francisco and Oakland each approved 45-day pauses. These are temporary restrictions rather than evidence that all affected projects have been cancelled, but they can delay permitting and development decisions.
In Memphis, residents have protested a proposed SpaceXAI AI data-center project, citing concerns over pollution, electricity consumption and public health. A city council vote on a possible 12-month pause on new construction was deferred; the project was not formally halted in the information available.
Opposition is also targeting a planned AI campus in Utah associated with Kevin O'Leary. The proposed site covers about 40,000 acres and is expected to require approximately 9 GW of electricity. That figure represents anticipated power demand for a planned project, not commissioned capacity.
S1, citing Heatmap News, reports that at least $260 billion in planned US data-center investment has been cancelled since the start of the year because of local opposition. It further estimates that projects representing about $1 trillion of planned investment face varying degrees of local resistance. About $130 billion of project investment was reportedly cancelled in the third quarter alone, exceeding the amount cited for all of 2025.
The reported opposition centres on high electricity and water consumption, potential increases in electricity tariffs, pollution and wider environmental impacts. The cited source also states that 833 active groups opposing data centers were recorded by the end of the first quarter of 2026, up from 396 at the end of 2025 and spanning 49 states.
For operators, developers and investors, the trend could increase municipal regulatory and social risk, particularly for power- and water-intensive AI campuses. It may require earlier work on grid interconnection, water strategy, local economic benefits and community engagement. Without those elements, project schedules and development costs could rise.
Municipal moratoria and community opposition could extend permitting timelines, raise site-selection risk and complicate power and water planning for new US data-center capacity. For large, energy-intensive AI campuses, developers may need to secure grid capacity, water solutions and local support earlier in the development process, or face higher costs and slower delivery.
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