In the race to power artificial intelligence, tech giants like Amazon, Meta, and Microsoft are transforming quiet rural counties into bustling hubs of computing power. These massive data centers promise economic revival for struggling small towns, injecting billions in investments and swelling local budgets. Yet, beneath the short-term windfall lie growing concerns: skyrocketing housing costs, strained water and energy resources, and tax breaks that favor corporations over communities. As residents push back, many towns are betting their future on a boom that may not last.
Boomtown Revival
Data centers are concentrating in a handful of U.S. counties, creating modern-day gold rushes. According to a Wall Street Journal analysis, nearly 75% of the nation’s data center capacity is packed into just 33 of America’s 3,143 counties. Places long hit by factory closures or agricultural declines are suddenly flush with cash.
Take Umatilla County, Oregon. Amazon’s data center hub has ballooned the city of Umatilla’s annual budget from $7 million in 2011 to $144 million in 2024. The influx funds new high school robotics programs, boosts home construction, and packs local restaurants and bars. Similar stories unfold elsewhere: Meta’s $10 billion project in Richland Parish, Louisiana, and a record-breaking investment by OpenAI and Oracle in Washtenaw County, Michigan.
Nationwide, the numbers are staggering. A Harvard study counts nearly 3,000 data centers, with real estate firm Cushman & Wakefield reporting current capacity at 22.2 gigawatts—enough to power up to 17.8 million homes. Another 10.5 gigawatts are under construction, and 79 gigawatts are planned, requiring energy equivalent to 40 Hoover Dams.
Local leaders see opportunity. In Taylor, Texas, the Economic Development Corporation sold an 87-acre parcel to Blueprint Data Centers, projecting $25–35 million in tax revenue for the city over a decade, plus $20–25 million for schools. “These are the revenue sources that help with improved parks, more police, and better roads,” says Ben White, the corporation’s president. He notes data centers create few permanent jobs—mostly during construction—avoiding the strain of population growth on services.
The Hidden Costs
The prosperity comes with trade-offs. Housing shortages top the list. In Umatilla County, home prices have doubled, pricing out longtime residents even as new units are built at record speed. Some cities loan developers funds to accelerate construction, recouping costs only if sales continue—a risky wager on endless growth.
Tax incentives amplify the gamble. Umatilla County granted Amazon a 15-year property tax exemption, part of $6 billion in nationwide breaks over five years, per CNBC. A University of Michigan study concludes these deals benefit corporations far more than locals, who forfeit revenue for schools and infrastructure.
Environmental strains are even more alarming. Data centers guzzle resources. In 2023, they used 17 billion gallons of water for cooling, according to Lawrence Berkeley National Laboratory. Including electricity generation, the total jumps to 228 billion gallons—enough for Arizona’s entire population. In Newton County, Georgia, Meta’s facility contributed to water shortages.
Energy demands are massive too. Bloomberg reports electricity costs near data centers rising up to 267% in five years. Many centers rely on fossil fuels, prolonging coal and gas plants and exposing communities to pollution health risks. Residents often bear higher utility bills to subsidize the industry.
Community Backlash and Power Imbalances
Frustration is mounting. In Taylor, Texas, resident Pamela Griffin fights to honor a 1999 deed designating the land for parkland—a childhood playground where kids played baseball and camped. “It brings tears to my eyes that the wishes of that man did not get done,” she says of the original owner. Her neighborhood, once a haven for non-white families, now faces a data center next door.
Pushback is nationwide. Tucson, Arizona, blocked a proposal in August; defeats hit Racine County, Wisconsin; College Station, Texas; and Indianapolis, Indiana. Data Center Watch tallies $64 billion in stalled projects. St. Charles, Missouri, imposed a yearlong moratorium, while Atlanta banned centers near transit.
Experts highlight unequal negotiations. “There’s a big power imbalance and information imbalance,” says Melissa Scanlan of the University of Wisconsin-Milwaukee’s Center for Water Policy. Rural governments, inexperienced with mega-projects, often sign non-disclosure agreements (NDAs), leaving residents in the dark. In Northern Virginia, activists uncovered Amazon’s involvement only through job postings.
Microsoft’s Lyndi Stone admits the challenge: “Nobody really wants a data center in their backyard… Data centers, once operational, don’t bring a lot of jobs.” Construction booms fade, leaving warehouses that hum quietly but demand relentlessly.
A Risky Bet
Small towns are all-in on AI’s endless growth, trading tax revenue for resource strains and lost community character. Renewable energy and efficient cooling, like Blueprint’s closed-loop system in Taylor, could mitigate impacts, but most rely on the grid’s fossil fuels.
As Elena Schlossberg of Virginia’s Coalition to Protect Prince William County warns: “If you are only in this fight to stop what’s in your neighborhood, you’re going to lose because another one’s coming right behind it.” Tech firms bank on selling the boom before any bust. For these communities, the data center dream could either revitalize or reshape them forever—or leave them holding the bill when the servers go dark.