The tiny Los Angeles suburb of Monterey Park found the AI industry’s pain point in this month’s elections. Voters there took a dramatic step by enacting a permanent moratorium on data centers.
AI executives should look south from their San Francisco offices and pay close attention to this warning. They are about to launch some of the biggest IPOs in history, with record valuations. But these IPOs are coming just as public opposition is growing to the data centers they rely upon.
This could be one of the most important results from this primary election season, even if the Monterey Park moratorium itself won’t have a direct impact. Only one facility was proposed in the town, and it was already canceled by public opposition. But the vote showed that the political weakness of the AI and data center industries can translate into real-world losses.
Even worse, this is likely to be just the first vote of many across the country. AI executives need to toss out their broken political playbook around data centers and improve their pitch to the American public. They need to deal with the perception that they are spiking electricity bills for regular people by outcompeting households for energy.
The Monterey Park campaign never seemed close. The city council unanimously voted to place the measure on the ballot. Early returns show the public approving it with more than 86 percent. Data center supporters couldn’t seem to muster a single coherent argument, while their opponents created powerful ads that drove strong social engagement.
The shellacking should be no surprise. Gallup polling found that 71 percent of Americans oppose the construction of AI data centers in their community. The University of Pennsylvania’s Annenberg Public Policy Center found that only 17 percent of Americans think AI will have a positive impact on the country. They’re about as popular as spoiled milk. The hostility to AI companies coincides with the public feeling poor. The University of Michigan’s Consumer Sentiment Index dropped to 44.8 this May, the lowest rating in the history of the survey.
We saw the political weakness play out 600 miles east of Monterey Park, among the very different voters of Box Elder County, Utah. The controversial Stratos data center there won approval, at least for now, but only after a painful and bruising process.
Hundreds of residents showed up fighting mad at hearings on the project. Thousands filed objections online. The data center could eventually consume more than double the entire state’s current electricity demand, all of it generated on-site by burning natural gas from the same pipeline that heats local homes. Residents worried that this project would drive up their energy bills and pollute their air.
Gov. Spencer Cox had to walk back his strong support of the project and acknowledge, “People are concerned about data centers, they’re concerned about the [Great Salt Lake], they’re concerned about resources. They should be concerned. I share those concerns. They’re right.”
The industry did not handle this situation with much grace. Look at the spokesman for Stratos, who has become a very visible advocate for data centers: television personality and investor Kevin O’Leary. The problem is that O’Leary’s acerbic persona long ago earned him the ironic nickname Mr. Wonderful. While Governor Cox reached his hand out to the opponents, O’Leary derided them as being paid protesters bused in from out of state.
And on the other side? Pope Leo XIV has emerged as a leading critic of data centers. In Magnifica Humanitas, he argues, “Current AI systems require enormous amounts of energy and water, significantly influencing carbon dioxide emissions. … As their complexity increases, the need for computing power grows too, which requires an extensive network of … data centers and energy-intensive infrastructure. For this reason, it is essential to develop more sustainable technological solutions that reduce environmental impact and help protect our common home.”
The public backlash is already having an effect. The days of tax incentives for the data centers are probably over. Politicians are starting to follow the public mood and campaign against data centers. More public votes are coming in cities and states across the country.
The AI companies are responding with massive political donations, it’s true, but dollars don’t vote.
The industry does have a magic key to unlock public support, but it’s not using it: deliver a clean-power revolution for the country. Instead of spiking energy bills, they could cut them. Instead of increasing pollution, they could decrease it.
This won’t be easy and it won’t be cheap. To make this happen, the AI and data center industries would need to overcome the federal government’s apparent hostility to renewable power and their own short-term incentives. They would also need to overcome China’s dominant lead in the sector, but that lead is also proof that wind, solar, and geothermal power are viable technologies today.
The alternative seems to be for the AI industry to sit back and watch the chaos unfold as the Monterey Park vote, and the Box Elder revolt, are repeated everywhere around the country.
They would be at risk of killing their own goose just as it starts laying golden eggs.
Shum Preston is a political analyst and a Certified Information Privacy Professional. He is the former director of communications at Common Sense Media and at the California Department of Justice, and tracks data center politics on X.com/DataCenterPol.
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