Us Voters Put Data Centers On Notice. Australia Could Be Next

CANBERRA — American voters took to the ballot box this week to express artificial intelligence skepticism. Dozens of successful campaigns against data centers provide a template for those seeking to alter the AI deate in Australia.

After pollsters reported rising AI data center skepticism leading up to the Nov. 3 midterm elections, Americans voted against data centers in 40 out of 41 local ballot initiatives across 10 states. The vote ran roughly 3-to-1 against data centers and, in one instance, the officials promoting a data center were recalled: in other words, fired by voters.

Around 40% of proposed new data center capacity in the U.S. face new hurdles: 159 gigawatts of planned data centers are in states where the new governor backs a pause. 

Texas Gov.-elect Gina Hinojosa has pledged to impose a moratorium on new data-center approvals until the legislature passes protections for water supplies, electricity costs, property rights and air quality.

The Midwestern state of Ohio already had 125 data center moratoriums, and this week held the largest number of local referendums.

In Perry, a measure requiring hyperscalers seeking tax breaks to post bonds and meet noise limits passed 87-13. In Urbana, a ban on data centers was passed 77-23, and 73% voted to "recall" mayor Bill Bean. The debate followed Thor Equities, which planned a U.S.$1 billion data center campus there suing the city for enacting a 12-month emergency building moratorium in March.

An NBC exit poll of nearly 80,000 voters nationwide found that AI and data centers were a crucial or major factor in the congressional vote of 56% of voters, while 76% opposed a new data center in their own community.

American voters told local officials they don’t want large, long-lived industrial projects before they can see who pays for the electricity and water or what returns their community will receive.

The American experiences suggest the local data-center industry has a legitimacy problem — and Australia is increasingly mirroring that dynamic, despite government efforts to put guardrails on data center development.

The Albanese government is determined to attract and fast-track more data center investment, but a growing number of hurdles are appearing.

A cross-party parliamentary inquiry report in New South Wales, Australia’s most populous state, published Nov. 5 criticized current rules for looking at individual data centers in isolation “despite many impacts being cumulative in nature."

The committee chair, Abigail Boyd, from the Greens party, cited a "frenzy" of development to urge a "moratorium on new AI data centre approvals."

"The pipeline of planned projects is astonishing in scale, threatening to consume incomprehensibly large volumes of energy and water to feed their demands," Boyd wrote in her report foreword.

The report found that data centers are often clustered and their breakneck development is impacting other industries, for example by diverting labor to data centers and away from other infrastructure and residential construction.

The report records union concerns that NSW lacks enough specialist workers in mechanical services, ventilation, fire protection and piping. Big projects could draw tradespeople from other construction sectors, contributing to labor shortages and higher costs.

A dissenting statement to the report, from the pro-business Liberal party committee members Jacqui Munro and Scott Farlow, applied further pressure to the state and federal Labor governments, warning of "social fracturing and cautious investment," because of "woefully inadequate" public communication about both AI's benefits and "the physical constraints of construction and operations" of data centers.

In anticipation of this sort of criticism, the federal government wants to legislate data center standards that require operators to “bring your own energy” through additional capacity, preferably renewable energy. Ahead of a legislative framework, the government has sought to work with state and territory governments to create a voluntary national framework for approving developments, with some success.

Local protests have taken little notice of the national level conversation.

A proposed site in Lane Cove, Sydney, is no longer, after Goodman Group, the developer withdrew its plans for a 3-storey data center valued at roughly $1.2 billion Australian dollars, that would have operated around 20 meters from the nearest home, and 160 meters from Lane Cove West Public School.

About 40 kilometers outside South Australia’s capital, Adelaide, a much bigger proposed center, the 1,200-megawatt Tungkillo project in the Adelaide Hills, has prompted a cross-party protest movement over land, water, noise and light.

A hallmark of successful American campaigns against data centers has been their ability to move quickly beyond abstract complaints about AI, to deliver a variety of constraints related to both the specific projects, and the size of future proposed facilities.

In other instances, voters sought and won financial safeguards for public investments, to block tax incentives, and to punish officials who backed particularly contentious projects.

The most important lesson for proponents of data centers appears to be that a jobs-and-investment pitch needs local evidence. A generic promise of economic growth, or a short-term employment boost through construction jobs, is unlikely to outweigh immediate concerns about bills, and competition for land, water and energy.

The core tension Australian officials will need to pore over is: What must a developer prove before a community is asked to host the infrastructure?

An Australian government September consultation paper sought feedback on the idea that large data centers cover attributable network and utility costs, manage demand during peak periods and report water use. Similar rules exist in NSW for data center developers to access a fast-track to approval.

While the federal government’s intent to deliver guardrails is clear — how they plan to enforce them remains up in the air.

In Australia’s increasingly low-trust political debate: if voters lack trust that they are insulated from the costs of AI development, Australia may follow much of America into data center purgatory.