Data center backlash goes mainstream — and Ben Thompson proposes paying locals $10K a year to accept them

Data Center Backlash Goes Mainstream — And Ben Thompson Proposes Direct Payments to Locals

Data center opposition has moved beyond fringe environmentalism into mainstream electoral politics. A Texas county passed the state's first county-level moratorium on data center construction. In Missouri, voters ousted all four city council incumbents who approved data centers. North Carolina's governor is now highlighting that sales tax exemptions for data centers cost the state up to $57 million annually. Seven in ten Americans oppose building data centers for AI in their local areas, with 48% strongly opposed. Only a quarter favor such projects.

The backlash is real and spreading across both red and blue regions, yet the underlying tension reveals something broader: Americans broadly resist major infrastructure projects, regardless of category. High-speed rail, new roads, hospitals, nuclear plants, housing — all face local opposition. Data centers sit at the bottom of the popularity list, but they are part of a larger pattern of status-quo bias that has calcified in American development culture.

The messaging problem runs deep. Tech leaders struggle on multiple fronts. Some, particularly at AI labs, genuinely believe most jobs will disappear — a message that lands poorly at a University of Arizona commencement where Eric Schmidt was booed throughout his speech. Beyond the job displacement narrative, it is extremely difficult to describe the benefits of inventions not yet made or cures not yet discovered. Fifty years ago, people rejected nuclear power as unnecessary and scary; now electricity is expensive and experts rue the decision. Tech also has a chronic problem understanding how it sounds to people outside the Valley. Silicon Valley skepticism of Facebook, a company predicated on connecting with friends and family, reflected how insular tech culture can be.

The information landscape works against data centers too. TikTok's algorithm is still controlled by China and may amplify misinformation. Meta, having learned the lesson that aggressive censorship backfires, now gets no credit for restraint on data center falsehoods. X, owned by Elon Musk, has a perverse incentive: SpaceX's upcoming public offering includes the possibility of in-space data centers, making the platform structurally positioned to benefit from terrestrial data center opposition — though Thompson notes he has seen no evidence of algorithmic manipulation.

Thompson's solution is blunt: pay locals directly. He crunches the numbers on a proposed 1.6-gigawatt data center in DeForest, Wisconsin, which would generate around $3 billion in annual operator revenue. DeForest has 11,500 residents. At $10,000 per person per year, the total annual cost would be only 3.8% of the data center's gross revenue. Thompson argues that such a direct payment would likely have won approval for the DeForest project — and that operators could easily pass the cost to users. The original tax deal the village negotiated, around $50 million, pales against the math of direct distribution.

The proposal inverts the logic of local opposition: instead of abstract tax benefits that may or may not reach residents, data center operators would write checks directly into mailboxes. It sidesteps the friction between what communities are promised and what governments actually deliver.