Politics
Edward Longe: Data center protests are hurting Main Street
Data center opposition has become a national trend, uniting Americans across the country and across the political spectrum.
From Fort Meade, Florida, to Box Elder, Utah, to Indianapolis, residents have turned out in force to protest the server farms rising in their backyards, with particular concerns about water consumption and electricity rates.
But lost in the debate is an irony: Activists who believe they are fighting corporate power may instead be harming small businesses and doing a disservice to their own communities. Data centers are not simply infrastructure for Amazon and Google. They are also the foundation on which small businesses operate and compete with larger incumbents.
If opponents succeed in restricting the supply of data centers, they will not weaken the technology giants. They will instead reinforce their market dominance.
When people think about data centers, they often picture the massive hyperscale facilities being built by companies such as Meta in Louisiana or Google in Texas. While these projects account for roughly half of America’s data center infrastructure, co-location and enterprise facilities play an equally important role.
These facilities allow startups and small businesses to access enterprise-grade computing without constructing or maintaining their own server rooms.
A small financial technology company running fraud-detection software or a healthcare startup processing patient records can exist because shared data centers provide affordable access to the computing power their businesses require.
Between March 2024 and March 2025, local opposition delayed or blocked more than $64 billion in data center projects across the United States. Between March and June 2025 alone, that total climbed to more than $98 billion. When development slows, the cost of computing inevitably rises. Large technology companies such as Meta, Amazon and Microsoft have the financial resources and existing infrastructure to absorb regulatory delays. Small businesses and startups do not.
They face shrinking computing capacity, rising operating costs and fewer opportunities to compete.
A small business watching its cloud computing bill rise has far fewer options than Amazon. When regional co-location capacity becomes scarce, the companies that suffer are those that rent computing infrastructure rather than own it.
Policymakers who have spent years expressing concern about the market power of major technology firms now risk making it even more difficult for competitors to emerge by restricting the infrastructure they depend upon.
Economists describe this phenomenon as regulatory capture, where government regulations, licensing requirements or compliance costs become so burdensome that they discourage new competition while protecting established players. Today, regulatory capture is emerging through proposals for data center moratoriums, energy-access restrictions, increasingly complex zoning requirements and prolonged permitting delays. While intended to address public concerns, these policies could reduce access to the computing capacity new companies need to compete.
The impulse to slow data center development is understandable. Community concerns are real, public opposition is vocal, and elections are never far away.
But election cycles end, while poor policy can have lasting consequences.
Adding unnecessary barriers to digital infrastructure does not weaken the nation’s largest technology companies. It simply grants them an even greater competitive advantage.
If lawmakers truly want to strengthen Main Street, they should streamline permitting, modernize zoning rules and expand access to reliable energy. Otherwise, the nation’s computing market will continue consolidating around the handful of companies already wealthy enough to build and operate their own infrastructure.
That outcome would not challenge Big Tech; it would protect it.
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Dr. Edward Longe is Director of the Center for Technology and Innovation at The James Madison Institute.
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