How the Bipartisan Dirty Data Center Boom is Leaving Taxpayers Without Power (Part 2 of 3)

By Mary Barrow, CFA Legal Intern

In Part 1 of this series, we examined how federal, state, and local policies are enabling the rapid expansion of data centers across the United States. This second installment dives deeper into how these massive data centers disproportionately impact vulnerable and disenfranchised communities-areas already struggling with limited resources, weakened political power, and diminished capacity to resist powerful corporate interests. The lack of transparency created by policies discussed in Part 1 has been utilized as a valuable tool for Big Tech to snuff out meaningful community engagement and make resistance an uphill battle, almost impossible to win.

Targeting Vulnerable Communities

Data centers are increasingly being sited in low-income neighborhoods and communities of color, areas already burdened by environmental and economic injustice. A recent national study revealed that while data centers aren't disproportionately located in high Environmental Justice Index (EJI) tracts overall, a very strong correlation exists between their siting and social vulnerability (poverty, lower educational attainment, etc.) with nearly half of all facilities found in census tracts whose social vulnerability indicators are above the national median. Regionally, the picture is even more stark: states like California, Texas, and Illinois host clusters of data centers in areas with high or very high EJ burdens, while other regions like Virginia see fewer in such communities. In California alone, Tech Policy Press reports nearly one-third of data centers are located in the state's most polluted neighborhoods.

These patterns echo a long history of corporate siting strategies in areas with limited political influence and resources. For decades, communities like those in Louisiana's "Cancer Alley" (an 85-mile stretch housing over 200 petrochemical plants) have been targeted for toxic facilities due to low land values, historic redlining, and racial segregation. In Cancer Alley, communities have suffered cancer rates up to 47 times higher than EPA "acceptable" levels, with emissions regularly exceeding federal standards. Even so, regulatory enforcement has lagged due to the political power imbalance between the industry and community.

Just as petrochemical companies relied on redlining and secrecy to insulate their operations from resistance, data center operators are now using similar tactics. While data centers may be less overtly toxic, they still consume massive amounts of energy and water, generate harmful noise and emissions, and are disproportionately located in communities with limited resources to resist. Unlike petrochemical firms-which, despite their pollution, often provided some long-term local jobs-data center companies are aggressively touting job creation yet delivering very few. For instance, OpenAI's massive Stargate AI center in Abilene, Texas employed over 1,500 construction workers, but will sustain only about 100 permanent positions once operational. Nationwide, even optimistic industry estimates, such as a PwC-commissioned report that attributed 4.7 million jobs to data centers, acknowledge that only around 600,000 were direct tech roles, with the rest being indirect or temporary. Moreover, many of these permanent jobs pay substantially less than promised and often go to outside specialists rather than local residents. Ultimately, placing data centers in marginalized neighborhoods mirrors the tactics of past environmental racism.

Permitting and Process Opacity

One way communities have historically protected themselves from harmful or unwanted developments is through zoning and permitting laws, which were designed to ensure transparency, environmental compliance, and public participation. Today, those safeguards are being undermined. The controversy surrounding xAI's planned supercomputing campus in Memphis illustrates this breakdown vividly. According to a lawsuit filed by the NAACP, the project's air permit "blatantly violates the Clean Air Act," allowing emissions far beyond statutory thresholds. Yet the Tennessee Department of Environment and Conservation approved it anyway, despite clear federal standards.

This was not an administrative slip; it was a calculated business decision by Elon Musk's xAI, one predicated on the assumption that enforcement would be lax under the current administration. That assumption is hardly unfounded: even though Trump's personal relationship with Musk has frayed, the political signals remain clear that permitting rules will bend in favor of AI development, and oversight will be minimal.

Trump's newly unveiled American AI Action Plan further signals this permissive stance to data center developers. The plan pledges to fast-track AI infrastructure by "streamlining" permitting and dismantling regulatory "barriers," including environmental reviews that have historically been required under the National Environmental Policy Act. The plan goes even further by threatening to preempt state and local standards, conditioning federal support on jurisdictions' willingness to adopt lighter-touch rules. These provisions effectively slam the door on community engagement, eliminating public notice requirements, shortening or bypassing comment periods, and restricting legal remedies traditionally available to residents fighting high-impact projects.

Together, these shifts create a regulatory environment in which tech giants can proceed with near impunity, confident that even blatant violations of environmental law will go unchecked. Environmental statutes remain on paper, but political priorities have hollowed out their force. The United States is recalibrating its governance model to prioritize hyperscale AI development above democratic accountability, leaving already vulnerable communities exposed to the unchecked social, environmental, and infrastructural costs of Big Tech's expansion.

Clawing Back Power: Learning From Community Champions of Years Past

When regulatory systems fail and government agencies align with industry, communities have historically been forced to fight for their right to clean air, water, as well as for meaningful participation in decisions that affect their lives. These struggles have been long, grueling, and often uphill battles against both corporate giants and the very agencies tasked with protecting the public. They have also produced some of the most powerful models of grassroots resistance, models that can and should inform today's fight against Big Tech's unchecked expansion of data centers.

Take the case of Norco, Louisiana, where residents, led by Margie Eugene-Richard and the Concerned Citizens of Norco, faced years of stonewalling from local boards and state agencies that rubber-stamped Shell Chemical's pollution-heavy operations. For years, regulators dismissed health concerns and relied on company self-reporting, even as air monitors documented dangerous benzene levels. Shell only conceded to relocate 200 families and fund millions in community programs after relentless organizing, media pressure, and international advocacy made regulatory inaction untenable.

Even procedural fairness has had to be fought for. In Kettleman City, California, a predominantly Latino community opposing a hazardous waste facility expansion discovered that planning boards were holding hearings without translation or bilingual notices, effectively silencing opposition. Through litigation and grassroots mobilization, residents forced compliance with language access laws, setting a precedent for environmental justice communities nationwide.

These victories didn't come because the government suddenly acted in good faith. They happened because communities clawed back power through strategic litigation, citizen science, and relentless coalition-building, forcing agencies and corporations into accountability.

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