How California can do data centers differently and win back community trust

Americans finally found something to agree on: concern about the rapid proliferation of data centers. 

A recent Reuters/Ipsos poll found that only 1 in 3 Americans approves of the current pace of data center construction, and most would oppose a facility being built in their own community. That skepticism comes at a time when confidence in Big Tech is at an all-time low, according to Gallup.

These concerns deserve attention, not because the data center boom can be stopped, but because it can’t.

More than 800 data centers are under construction across the United States, with the largest technology companies collectively spending hundreds of billions of dollars each year to expand AI infrastructure. McKinsey & Company estimates that the cumulative global investment in data centers could reach nearly $7 trillion by 2030. 

The combination of a once-in-a-generation infrastructure buildout and a public trust deficit poses a defining challenge for the tech industry. If it wants communities to accept the infrastructure powering the AI revolution, Big Tech must embrace transparent planning, ensure that host communities truly share in the benefits and accelerate clean energy deployment — rather than deepen dependence on fossil fuels.

As my colleague Charles Zukoski, a USC engineer and host of the “Electric Futures” podcast, says, “Social license isn’t free.”

In other words, community approval is not a given.

Yet data center developers often spend years planning projects behind closed doors, shielded by nondisclosure agreements, only to face fierce opposition once residents finally learn what’s coming.

From the public’s perspective, NDA might as well stand for “No data centers allowed.”

Building trust requires meaningful engagement long before permits are filed. Residents deserve honest conversations about electricity demand, water use, traffic, tax revenues and employment opportunities. 

Microsoft has already ended its practice of requiring nondisclosure agreements from government officials during parts of its site selection process. Other technology companies should follow its lead. 

Transparency is only part of the equation. Communities that host this critical infrastructure should also share equitably in its economic benefits. 

Tom Steyer, a former candidate for California governor, proposed a “token tax” on corporate AI use, with proceeds funding direct payments and workforce training modeled on Alaska’s Permanent Fund, which distributes a share of oil revenues to residents. 

While his proposal remains hypothetical, Virginia has already taken a similar step. Since July 1, the state has imposed a 1.1-cent-per-kilowatt-hour tax on electricity consumed by data centers, a policy expected to generate as much as $600 million annually. For now that revenue flows to the state’s general fund, rather than back to residents, so the community payoff is yet to be seen.

Finally, there is the issue of energy. The International Energy Agency projects that global electricity consumption from data centers will more than double between 2024 and 2030, roughly matching Japan’s entire current electricity demand. 

Today more than half the electricity powering U.S. data centers comes from fossil fuels, with gas serving as the single-largest source.

The same extraordinary demand driving the expansion of data centers could become one of the strongest market forces for clean energy deployment. Long-term power purchase agreements can finance new wind, solar, geothermal, advanced nuclear and grid-scale storage projects that might otherwise struggle to attract investment.

If companies pair AI infrastructure with investments in transmission, energy efficiency and carbon-free generation, data centers could help modernize America’s electric grid instead of simply straining it.

The data center boom presents the tech sector with a rare opportunity to rebuild public trust. 

By bringing communities into the planning process early, sharing the benefits of development more equitably and leading the transition to clean energy at the scale this moment demands, the industry can demonstrate that innovation and community wellbeing can advance together.

There is still time to get this right.