Local resistance pressures tech giants ahead of the U.S. midterms

Companies promise fewer tax breaks, more disclosure or more money

What Amazon, Google, Meta and Microsoft have promised

Amazon, Google, Meta and Microsoft are answering local resistance to their data centers with three kinds of promises: taking fewer tax breaks, keeping fewer secrets or offering host communities more money. The tech industry says it has gotten the message. In addition to ramping up financial incentives, officials with Google and Meta said in interviews with The Associated Press they are trying to address mistrust by being more transparent with communities where they would like to build. The companies are also making pledges to reduce their impact on the environment and offering assurances that data centers will boost local property values — all while maintaining AI is a positive force for the American economy, despite its skeptics.

Meta and Amazon said recently they will each spend $1 billion on financial incentives to host communities in the coming years, on top of millions they already spend to support schools, charities and job training. Google says its investments in local programs in data-center communities will reach $1 billion by the end of 2027. The dominant players in the industry — Amazon, Google, Meta and Microsoft — project they will spend more than $600 billion this year combined on capital projects, primarily data-center construction in the U.S. Some critics call the payments that entice communities “bribes.”

The companies’ new promises also included taking fewer tax breaks. A Senate Democrats report said the companies aggressively seek state and local tax breaks. Microsoft has pointed to a couple of local tax breaks that it will forego, and Google recently said that for all of its new data-center campuses, the company will pay full real property taxes on the buildings and land. Nearly 40 states offer sales-tax exemptions that are saving data-center owners and developers billions of dollars annually, while Meta, Google, Microsoft and Amazon collectively reported more than $300 billion in net income in their most recent fiscal year.

Earlier this month, Amazon rolled out its “Amazon Data Center Commitment,” including pledges to improve the environmental rating of its backup diesel generators and disclose more about its data centers’ energy and water use. The companies have known since last fall that community opposition was becoming a serious problem. Data-center demand began driving up electric bills last year across a 13-state electricity grid stretching from Illinois to New Jersey and Maryland, angering ratepayers. The outcry led to promises from the tech giants to pay the cost of the power infrastructure to feed their data centers, while Microsoft rolled out its five-point “Community-First AI Infrastructure” plan.

Disclosure rules and the critics

Amazon, Google and Microsoft have stopped requiring government officials to sign non-disclosure agreements. Meta is always evaluating how well it shares information with communities, said Lindsay Elin, Meta’s vice president of public policy and external affairs. “As part of that work, we are reviewing our use of non-disclosure agreements,” she said in a statement to the AP.

The use of non-disclosure agreements has meant people in host communities may know little or nothing about a project until it shows up on a municipal board’s voting agenda. Besides that, tech companies often have hidden their involvement in a project behind a code name and developers who do the legwork with local governments, critics and other developers say. That practice “raises people’s suspicion as to what’s truly happening,” said Anita Verma-Lallian, a developer with data-center projects in Arizona.

Devi Thomas, Google’s global head of community development and engagement, told AP that she wouldn’t call resistance to data centers a “backlash,” but that “there are often community questions to be addressed.” “Early public consultation is increasingly a very important part of the process. We have done as much as we can to make sure communities are involved early on,” Thomas said.

In a report this month that sharply criticized data-center giants including Amazon, Google, Meta and Microsoft, several Senate Democrats said companies have used non-disclosure agreements to freeze out the public. The report also said the companies aggressively seek state and local tax breaks and do not cover the entire cost of the electric-grid buildout needed for energy-hungry data centers.

Those commitments have not persuaded the companies’ critics. Sam Burleigh, who helped start Concerned Citizens of Montour County in rural northern Pennsylvania to fight a potential Amazon-backed data-center project, said the company’s commitments are “propaganda.” “What I see is them realizing they have more resistance than they ever dreamt of. And so now they have to find some way, some method to break through that resistance,” Burleigh said. Kathryn Hoffman, executive director of the Minnesota Center for Environmental Advocacy, which has sued over two prospective Google data centers, said she sees Google doing more public relations outreach, but doesn’t see it doing more to disclose critical details about its plans.

Municipal resistance and the midterm politics

Residents continue to attend municipal board meetings in large numbers, pressuring officials to reject data-center proposals, and more municipalities are passing data-center moratoriums. Data Center Watch, a project of AI security consultancy 10a Labs, said it saw sustained local opposition to dozens of projects during its latest April-to-June reporting period. Community opposition that blocks municipal permits has become a bottleneck for the companies’ construction plans, and the tech giants could face more challenges if voters next month elect more public officials who are skeptical of data centers.

Balaji Tammabattula, chief operating officer of BaRupOn, which develops data-center campuses, said the pressure of the midterms has helped developers understand how crucial community support is to a project’s success. “It’s impossible to build without them,” he said.

Drew Nations, a developer in North Carolina, said developers need to aggressively address quality-of-life complaints from neighbors. He said that includes shielding neighbors from noise and keeping data centers out of public view so they are not an eyesore, and that developers need to forego “corporate welfare” from communities, such as property-tax abatements. Those tax breaks leave people in the community thinking, “‘So you’re saying that this multi-multi-billion, if not trillion-dollar company, gets tax breaks and I don’t?’” Nations said.

Community opposition is a factor in the midterm elections next month, which will decide control of Congress and 36 governors’ offices. In an Aug. 18 memo, the Senate Republicans’ national campaign arm crystallized the pressure on the tech giants, warning the tech sector that it must “fix the toxic brand of an entire segment of the economy” or risk long-term fallout in elections. The memo said that included addressing “who benefits, who pays, and why a community should want one.”

President Donald Trump has backed the data centers. In a social media post Wednesday, he urged the companies to pay people and communities a “dividend” if they wanted their data centers to be popular. “MAKE DEALS, and get them built!!! GREAT FOR THE U.S.A.,” Trump wrote.

Spending to promote data centers has been on the rise. The Data Center Coalition, a trade association whose members include the tech giants, said it has spent more than $10 million running pro-data-center advertisements in 10 states on television and elsewhere. Data-center giant QTS and a group that doesn’t disclose its donors, Build American AI, also began advertising campaigns this year.