A Sabey Data Center facility in Quincy, Wash. (GeekWire Photo / Lisa Stiffler)
Data center developers already knew they had a public relations problem. This month’s midterm elections showed how much of a political problem it has become.
Voters approved data center restrictions in 44 of 45 local measures across a dozen states. Candidates who support stronger regulation of the facilities won 32 of the 34 gubernatorial races called so far. And political campaigns reportedly spent more than $380 million on TV ads referencing data centers, according to the Associated Press .
The results capped a year of accelerating resistance as tech giants plan to spend hundreds of billions of dollars on new facilities.
So what comes next? More outreach, more transparency and the expectation that states and local governments will pass data center rules, said leaders in the Pacific Northwest.
“We’ve been working and adapting our approach to meet the moment,” said John Wilson, chief financial officer of Sabey Data Centers , in an interview. “There used to be a time where we would say that our track record could speak for itself, and that’s clearly no longer the case.”
Communities nationwide have raised concerns about the facilities’ effect on rising electric bills, their water use for cooling electronics and the noise they generate.
Broader fears about artificial intelligence are also stoking the pushback, including worries that it will replace workers and appropriate human-created content, and that it can provide erroneous information, foster unhealthy relationships with users, or facilitate scams or terrorist attacks.
A renewed effort to regulate data centers is expected in January in Washington state — home to the headquarters of Sabey, Microsoft and Amazon.
Earlier this year, state Rep. Beth Doglio , D-Olympia, pushed legislation that included ratepayer protections, transparency on environmental impacts and clean energy requirements. Microsoft and the national Data Center Coalition opposed the bill, which failed.
Doglio has been meeting with stakeholders, including tech companies and data center developers, and will try again in the coming legislative session under noticeably different conditions. Fellow lawmakers, she said, will take on AI’s intersection with privacy, education, labor and other issues.
“It’s going to be a very tech-heavy session,” Doglio said.
Inside a Microsoft data center. (Microsoft Photo)
More outreach, bigger obstacles
Before voters weighed in this month, tech companies launched efforts to assuage public fears.
In January, Microsoft released its “Community First AI Infrastructure” initiative , which includes promises to pay the company’s full power costs, reject local property tax breaks, replenish more water than it uses, train local workers and fund AI education and community programs.
Last month, Amazon announced its “Built Together” program , pledging to invest $1 billion over five years in the U.S. communities where it operates data centers, including support for education and civic projects. The initiative offers similar commitments to Microsoft’s on transparency and covering its energy costs.
Wilson said Sabey also works with communities to understand and meet their needs. When a proposed campus in Indianapolis triggered significant pushback, the company brought community members to Quincy, a central Washington data center hub, to tour a Sabey facility and hear from locals about their experience.
“It requires a lot of patience. It requires a lot of transparency in our communication,” Wilson said. Sabey’s Decatur Technology Park in Indianapolis is moving ahead, and the company aims to bring it online in 2030.
But the even bigger challenge now is statewide moratoriums and data center bans — a scale of resistance that is difficult to address even when there is local support.
Oregon Gov. Tina Kotek in October directed a state agency to pause processing and issuing permits for new and expanding data centers until July 2027. Umatilla, where Sabey is developing its first Oregon campus, declared a local state of emergency over the potential loss of investment and revenue, the Oregon Capital Chronicle reported.
Even with the surge in resistance, “we’ve been able to find our way through on every project that we’ve had,” Wilson said. “I’m knocking on wood as I say that.”
Preparing for new laws
Corporate commitments alone may no longer be enough to win public confidence, said Brad Smith, Microsoft vice chair and president, in a GeekWire interview. Communities increasingly want laws requiring all data center developers to build responsibly — a shift he called a “watershed” moment, “but one we anticipated.”
“[P]eople want to see everyone who builds a data center do it in a responsible way,” Smith added, “and they feel that the only way that one can obtain that result is to have some new laws that are put in place.”
Come next year, that could include Washington and impact local tech giants, Sabey and others. Baxtel , a data center industry research firm, lists 29 Microsoft facilities operating in Washington and four under construction, with Sabey operating eight facilities.
Amazon plans to build its first large-scale data centers in Washington, with proposed campuses in Walla Walla County and the Tri-Cities. Amazon did not respond to repeated requests for comment on this story.
Doglio said the next version of her bill will be more stringent. “We have to have a strong bill,” she said, adding that the public and members of her party are calling for it. Microsoft did not publicly specify which provisions triggered its opposition to the previous bill.
Wilson hopes any legislation, in Washington or elsewhere, allows flexibility and recognizes that data centers vary widely in size, impact and application. Sabey provides data center space and infrastructure for customers ranging from major cloud companies to corporations and community organizations.
“Describing all data centers as one thing is just not accurate,” Wilson said, “and it doesn’t understand the realities of the industry itself.”
Smith expressed optimism that U.S. lawmakers can find a middle ground that meets the needs of communities and tech companies.
“There’s plenty of room to draft laws that enable people to go forward and build responsible data centers without chilling the economic contributions these data centers make, especially to local communities,” he said.
