US data center financing faces community opposition

The U.S. data center boom is encountering significant political and community opposition, forcing banks and asset managers to incorporate these risks into their financing decisions. In Q1 2026, at least 75 projects worth about $130 billion faced local opposition, according to Pi Data Centers. Major banks including JPMorgan Chase, Morgan Stanley, and Bank of America are scrutinizing community concerns, permits, and approvals before committing capital. Specific projects illustrate the trend: JPMorgan Chase and Morgan Stanley managed a $12.3 billion bond sale for BlackRock's partnership with Meta Platforms in El Paso, Texas, despite resident opposition; Quality Technology Services terminated its Prince William Digital Gateway project in Virginia after strong local opposition; Morgan Stanley and KKR & Co. arranged a $9.7 billion credit facility for CyrusOne, which faces opposition to its Illinois center; and Bank of America advises Related Digital on a $16 billion campus for Oracle Corporation in Michigan, which is moving ahead despite opposition. Lenders are leaning toward projects in more welcoming states and are pricing cancellation risks, while operators seek to preempt issues by building on-site power generation. Despite the challenges, banks remain keen to finance the sector, driven by surging AI demand and forecasts of over $6 trillion in AI spending through 2030.