Microsoft and Google directly addressed the data center controversy at the climate summit.

The data center construction boom is generating unprecedented social resistance, with tech giants refuting criticism of the rapid expansion of data centers.

This week, executives from Microsoft and Google's parent company, Alphabet, responded to criticisms surrounding the rapid expansion of their data centers at a climate conference in New York. Both companies outlined their respective responses to key points of contention, including electricity cost-sharing, labor input, and water efficiency.

Community resistance has already had a substantial impact on project implementation. A report by research firm Data Center Watch shows that in the second quarter of this year, approximately 45 data center projects, with a total value of $68 billion, were blocked or delayed due to backlash from local residents and policymakers.

Meanwhile, about 30 state legislatures across the United States have introduced legislation concerning data center site selection, electricity, and water supply, many of which have already been passed.

Political resistance becomes the biggest variable

The controversy surrounding data centers has transcended the purely environmental realm and evolved into an issue with broad political mobilization potential.

Amanda Peterson Corio, Google’s global head of data center energy, bluntly stated that one of the biggest obstacles facing data centers is that they are “politically targeted by both the left and right wings, and now, during the election cycle, more money will be poured into them.”

Illinois Governor JB Pritzker said at a climate event on Tuesday that concerns about data centers are "justified," citing reasons beyond just the massive power demands, including water usage, noise, and zoning issues.

However, he did not advocate a complete ban, but rather emphasized that preconditions should be set:

If we are to allow them to be deployed, we must ensure that they are powered by clean energy and employ a closed-loop water recycling system. This is a mandatory requirement.

Brook Porter, a partner at G2 Venture Partners, holds a different view. The fund was an early investor in Crusoe, which is building OpenAI’s large-scale “Stargate” project in Abilene, Texas.

Porter believes that while there is widespread strong opposition to data centers, it is "somewhat irrational." Essentially, it stems from the public's lack of firsthand experience with artificial intelligence. "Most people haven't experienced the benefits of AI yet; right now it's just a frightening threat, like it'll take my job."

Tech giants focus on managing three major controversies

Faced with public pressure, leading companies such as Microsoft, Google, and Amazon have prioritized cost, employment, and water usage in their responses.

At the Bloomberg Green Summit, Microsoft's Chief Sustainability Officer, Melanie Nakagawa, stated that the questions raised by the community were "very important" and have spurred in-depth discussions on "what consumers should expect from electricity."

She explained that Microsoft is working to "isolate" data center-related costs to avoid passing them on to ordinary consumers, while focusing on workforce support and water resource efficiency. She said:

In the United States, investing in the workforce is of paramount importance at present.

Regarding water usage , Nakagawa stated that Microsoft has publicly disclosed specific water usage data for each data center campus in its sustainability report this year.

Amazon's Chief Sustainability Officer, Kara Hurst, added that Amazon does not use water cooling systems to cool its data centers 90% of the time, "which is an important statistic because there is a lot of misinformation about water usage."

Hurst also called for renewed attention to grid stability, emphasizing the need for improved policies to drive investment in clean energy sources such as wind, solar, and nuclear power.

Emerging markets struggle to absorb spillover demand, prompting banks to target opportunities arising from power grid upgrades.

World Bank President Ajay Banga poured cold water on the prospects for the expansion of the global data center landscape at the summit.

He stated that emerging markets are almost entirely incapable of building data centers on a large scale. "Emerging markets don't have many data centers, and they don't have any, believe me. You need a lot of computing power, you need a lot of electricity—in some cases even more than developed countries, let alone these developing countries."

The surge in electricity demand from data centers is also reshaping the business focus of financial institutions.

Several leading global banks are leveraging this week’s series of meetings in New York to actively compete for financing opportunities arising from the large-scale upgrade of the U.S. power grid.

Heather Zichal, JPMorgan Chase's Global Head of Sustainability, revealed that the bank plans to meet with over 100 clients during the event, with grid modernization financing being one of the core topics of discussion. Zichal said:

We are entering an era where access to electricity will increasingly determine where businesses invest, grow, and compete.

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