The rapid expansion of artificial intelligence data centers across the United States has ignited significant public anger and resistance, as communities grapple with the considerable strain these facilities place on local electricity grids and precious water resources. Big Tech companies, including Microsoft, are facing an uphill battle to win over Americans concerned about the environmental and economic impact of these massive computing warehouses.

Microsoft's president, Brad Smith, is spearheading an initiative to address these concerns, advocating for an industry-funded approach where technology companies, rather than taxpayers, bear the full costs of the infrastructure required for AI chatbots like ChatGPT, Google's Gemini, and Microsoft’s own Copilot. This proposal has even garnered a nod from former President Donald Trump, who publicly stated that Americans should not "pick up the tab" for higher utility costs associated with these data centers. Smith emphasized that while local communities desire new jobs, they should not come "at the expense of higher electricity prices or the diversion of their water."

The campaign comes at a time when data center developers frequently encounter strong local opposition, leading to defeats in municipal board meetings for zoning applications and construction permits. Concerns are multifaceted: rising electric prices are a major issue, with ratepayers in regions like the mid-Atlantic (encompassing parts of 13 states), Virginia, Ohio, and Pennsylvania already experiencing increased utility bills since at least June due to data center demand. Future increases are anticipated as new power sources are built to meet this burgeoning demand. Another point of friction arises from confidential bulk power deals between developers and local utilities, which, while profitable for utilities, lead consumer advocates to question whether data center operators truly cover their costs or if expenses are shifted to other ratepayers.

Beyond energy, the heavy water usage for cooling electronic equipment in data centers has raised alarms among residents fearing depleted wells and spiking water utility bills. Communities also express worries about the loss of open spaces, farmland, forests, and rural character, along with potential damage to quality of life, property values, the environment, and public health. To mitigate this hostility, data center operators are increasingly offering substantial financial incentives to communities for project approval. For instance, in Hobart, Indiana, a multibillion-dollar Amazon data center received approval after promising two $5 million payments for building permits and an additional $175 million over three years for various project milestones, a deal that opponents argue unduly influences city officials.

Microsoft itself has faced hurdles in its expansion plans, particularly in Wisconsin, Brad Smith's home state and the site of what the company calls "the world's most powerful AI datacenter." Despite promises of hundreds of jobs and Governor Tony Evers' support for positioning Wisconsin at the forefront of AI, environmentalists and consumer groups warn of unprecedented electricity consumption, potential rate hikes across the Midwestern power grid, and the daily use of hundreds of thousands of gallons of Lake Michigan water. Microsoft officials have pledged minimal impact and a contribution of carbon-free energy to the grid.

In response to these specific concerns in Wisconsin, groups like Clean Wisconsin have called for a pause on data center approvals until a comprehensive state plan for regulation is developed. Furthermore, Democratic gubernatorial candidate Francesca Hong has proposed a "CONTROL ALT DELETE" initiative, advocating for a moratorium on data center construction until environmental and energy costs are fully understood and mitigated. In an interview, Smith addressed these challenges, identifying electricity as the "heaviest lift" and a larger investment compared to water usage, given decades of flat electricity production in the U.S. He expressed confidence that by partnering with utilities and "paying our own way," the industry can satisfy local communities, noting that utility commissions' approval is crucial.

Smith reiterated Microsoft's firm belief that private companies should integrate the costs of electricity grid improvements into their financial planning, rather than relying on public tax dollars, especially for transmission and substation enhancements. He also confirmed Microsoft's unwavering commitment to its 2020 goal of being "carbon-negative by 2030," which involves significantly reducing emissions and then annually removing more carbon from the environment than it emits. While acknowledging that power to data centers sometimes comes from natural gas, Microsoft works with utilities to ensure cleaner natural gas usage and invests in bringing new carbon-free energy sources—such as nuclear, solar, and hydro—to regional grids. Smith asserted confidence in meeting these carbon commitments by the decade's end, describing progress as "lumpy, not linear," with current investments laying the groundwork for future benefits. Despite calls for a pause in Wisconsin, Microsoft supports the state developing a comprehensive electricity plan but believes its projects should proceed, citing partnerships to improve the southeastern Wisconsin electricity grid, proposed rate tariffs that impose additional costs on Microsoft, and investments like a 150-megawatt solar farm.