Public outcry over data centers has banks recalculating risk
Major banks like Bank of America and JPMorgan are reassessing financing for AI data center projects due to increasing public backlash across the U.S. This opposition, driven by concerns over energy use, noise, and environmental impact, has led to numerous project cancellations and the enactment of over 500 local restrictions. Over 50 planned data centers have been canceled this year alone, with the pace of moratoriums accelerating.
Major financial institutions, including Bank of America and JPMorgan, are actively recalculating the risks associated with financing AI data center projects due to a significant increase in public opposition across the United States. Karen Fang, Bank of America's global head of infrastructure and sustainable finance, stated that community support and project readiness, including permitting and approvals, are critical factors in their financing decisions. Kevin Curtin, head of AI infrastructure investment banking at JPMorgan, emphasized the extensive work required to secure a bank loan and the ongoing need for projects to comply with financial covenants throughout construction.
The growing backlash is evident in more than 500 U.S. counties or municipalities that have enacted severe restrictions on new data center development, often including steep setback requirements, noise limits, and outright permit bans. According to Heatmap, the majority of these restrictions have been enacted since the beginning of the year, with nearly 190 passed since June 1, and the pace of moratoriums is accelerating. This has resulted in the cancellation of over 50 planned data centers this year, more than double the cancellations in all of 2025, with Amazon, Microsoft, and Google among those canceling projects in states like Arizona, Wisconsin, and Indiana.
Residents' concerns primarily revolve around increased energy consumption leading to higher utility bills, disruptive noise levels, environmental impact, and security risks. Meta CFO Susan Li acknowledged the "dynamic and uncertain" environment for AI infrastructure building. Despite this increased scrutiny, Bank of America remains a significant lender to AI-related companies, notably serving as a financial advisor for a $16 billion data center campus being developed for Oracle in Salin Township, Michigan, a project that has also faced local opposition.