How Backlash Against Data Centers Could Start Showing Up in Hyperscalers' Earnings Reports
As states like Ohio move to increase their regulation of data centers and reduce their subsidies for the businesses behind them, the costs of building and operating them could increase significantly.
How Backlash Against Data Centers Could Start Showing Up in Hyperscalers' Earnings Reports
Overview
Ohio has become one of the hottest destinations for hyperscalers looking to build data centers. Because of the state's relatively low land prices, existing facilities, and generous tax breaks, it has looked like a great fit for companies such as Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Meta Platforms (NASDAQ: META) that want to continue rapidly building artificial intelligence (AI) infrastructure.
However, the tides are turning and moods are souring as legislators in the once-welcoming state aim to close the door on new data centers. Ohio could be the canary in the coal mine; investors should expect other states to follow suit in removing their welcome mats. The implications will undoubtedly affect earnings and the growth trajectory of AI in the U.S.
Details
The backlash against hyperscalers and their data centers is intensifying for several reasons. Residents living near them complain of noise pollution, strain on local water and electricity supplies, and the disappointingly low numbers of permanent jobs being added to their local economies. The concerns are real, and communities, regulators, and politicians are pushing back against the facilities with growing fervor, according to multiple reports.
Source
Originally published at www.fool.com.
