The Art of the Data Center Deal
August 10, 2026
Tech giants are racing to build data centers with minimal oversight. But because of regulatory gaps, local communities hold unique power right now to shape the future, but only if we give the Data Center Dudes a hard “no.”
(For a primer on *why* everyone hates data centers, check out last month’s Instrumental newsletter, or follow the Daily Toplines).
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What?
Ever since OpenAI launched ChatGPT, Silicon Valley magnates, Wall Street brokers, and Trump-y real estate grifters have been racing to build new data centers.
In 2018, there were roughly 150 hyperscale data centers in the U.S. By the end of 2023, there were close to 500, and nearly 150 more came online in 2024 alone, and, as of December 2025, 500 new facilities are either being planned, constructed, or fitted out.
These are massive, billion dollar construction projects with worldwide impacts, but developers have been making their data center deals with city councils and county commissions, not heads of state or federal officials. That’s because data centers fall under "state and local siting jurisdiction" despite their massive scale.
The people in charge of development permits treat data centers as commercial real estate projects, not infrastructure, so OpenAI, Google, Amazon, et al need zoning approval and land use permits from local governments, the same way a mall or office park would.
Developers only need federal approval if the facility needs certain energy infrastructure (natural gas pipelines require FERC approval, for example, and nuclear power requires NRC approval), but even when that happens, the Trump admin hasn’t exactly been an enforcement juggernaut.
In fact, Trump signed an Executive Order 14318 last year specifically to "accelerate federal permitting of data center infrastructure,” directing federal agencies to create categorical regulatory exclusions under NEPA for qualifying data centers (over $500 million, more than 100 MW load).
Trump tried to create this federal fast-track because, by last summer, people living near these proposed developments had caught on to the fact that they had a say in these decisions. And since then, this massive, planetary fight has become hyper local.
The regulatory framework that treats a data center like a warehouse when it should treat it like a power plant had been great for Elon, Chevron, and JP Morgan, up until people figured out they had leverage over these multi-billion-dollar pollution centers.
There are now over 500 local laws and moratoriums restricting data centers around the country, and more in the works, from Utah to New York.
That’s one of the reasons there are so many new data centers under construction now (a sort of reverse “smash and grab,” a “take and contaminate”?), and why developers are trying to avoid telling people about proposed facilities until after the deals are done. And not telling people about all the problems the data centers bring until their water turns brown and there’s a constant hum in their bedrooms.
Like in Gilroy, California where residents only learned about Amazon’s $2 billion data center after construction began.
Or in North Carolina, where Amazon and county officials kept its Hamlet project secret while it hammered out the details with county officials, or here in Georgia, where OpenAI negotiated its $20 billion Effingham County facility in secret through non-disclosure agreements.
While the financials are hidden, the full environmental and community harms are unknown. Companies aren't required to disclose water consumption. Air quality impacts remain unmonitored. The one thing we do know is what the climate harms will be (catastrophic).
So What?
Because data center developers don't have to get state or federal approvals, they or their proxies had, up until last year, arrived at city councils ready to sweet talk the yokels with either vague promises or a flurry of irrelevant details.
They asked the community representatives for land, water, grid capacity, and tax incentives, and they often got them. But if anyone asked how much water they'll use, how they'll impact the power grid, or how much noise they'll produce, they'd demur, scoff, dodge, or scurry off to huddle in whatever backroom was available. Now that there is some resistance, they’ve started trying to find "acceptable" numbers to take back to their overlords.
It's like a nightmare in which you find yourself negotiating for a used car you don’t want. One that sits in your garage emitting ungodly heat and noise, polluting your water, and fueling droughts, hurricanes, and sea level rise around the world. Talk about a lemon!
Like at the Uncanny Valley’s Best Used Cars, data center developers want you to start negotiating on the details so that your "yes" begins to feel inevitable. But the moment you start discussing whether a facility could use 4 million gallons of water daily or 20 million, you've accepted the premise that the facility could end up there. You haven't accepted that premise, and you shouldn't.
The answer is "no." Start with "no," proceed to "no," and then stay there. Tell them to come back with a better offer, because the first one sucks.
What the first offer got Gallatin, Tennessee: Meta's data center consumed 53.4 million gallons of water in 2025, making it one of the city's largest water customers.
What it got Memphis: once complete, xAI's campus could require millions of gallons daily, enough to supply more than 10,000 households.
What it got in Louisa, Virginia: brown tap water, dust-coated property, and a constant hum running through a residential area.
What it got in Sterling, Virginia on one of the worst pollution days of the year: The Vantage data center there ran emergency diesel generators for 24 hours straight, billowing black smoke and giving residents burning lungs. The state's environmental regulator said it had no authority to stop them.
Data centers in their current form might not drive any technology, AI or otherwise, in five years, so all of this pollution might be for last year’s model.
As AI technology accelerates, so will the technology that powers it. Companies have been exploring everything from liquid cooling to relocating data centers into the ocean or space. The hardware that's cutting edge today might be obsolete within a decade.
There's also the very real possibility we're in a massive bubble that will make the dot com and real estate bubbles seem quaint.
But instead of the dot com crash’s legacy of dead Geocities sites and worthless pets.com stock, we'll have massive unquenchable heat islands humming twenty-four hours a day to remind us of this heady time.
If the bubble bursts, even the very few "permanent" jobs and tax revenue data center developers promise will disappear. The droughts, the pollution, the tax dollars lost, and the climate impacts? Those will still be here.
Now What?
We'll never have better leverage than we have right now. Once you approve a data center and construction begins, your negotiating position collapses. Kassie Jones got it right in her Marietta Daily Journal piece last week about the proposed “information transmission center” on Powers Ferry Road:
"Once approval is granted and millions of dollars are invested, Marietta's negotiating leverage will be dramatically reduced. The time to ask difficult questions, establish limits and protect surrounding neighborhoods is before the vote."
We need to say no, and to keep saying no, until we get better information, better incentives, and better safeguards.
Until then, don't negotiate terms. Don't accept promises about renewable power or closed-loop cooling or community benefits down the road. Don't split the difference on water usage or noise standards. Every negotiation is a step toward yes. So the answer is no. Hard pass.
Nobody likes data centers anyway. From MAGA to Antifa, Americans oppose data centers near their homes more than they oppose nuclear power plants. The only group optimistic about artificial intelligence is men older than 65, and I suspect they are more optimistic about shareholder value than about data center impacts.
The bipartisan data center resistance is fascinating on a messaging and organizing level, but on a practical level it also means politicians will pay no ballot box cost for saying no. They'll likely lose some Big Tech, Wall Street, and Real Estate donors, but our job is to make them want our votes more than those donor dollars.
In theory, we still get a say in who makes community decisions, right? For a couple more years, at least? A couple more months, maybe?
Anyways, the pressure is all on the developers. So let them come back next year. Or in five years. By then, the technology will be better. The business model will be clearer. Or the whole thing will have moved to space, and you'll be grateful you never said yes to these ginormous earthbound lemons.
"This is the one time we have something that they want, which is permission," Jones wrote. True! So don’t give it away for free.
NB: All typos are because I’ve been driven batshit by ambient low humming cooling tower bacteria
