Data Centers Open Doors, Refine Strategy to Counter Backlash

# Data Centers Open Doors, Refine Strategy to Counter Backlash Source: [https://news.bloomberglaw.com/us-law-week/data-centers-open-doors-refine-strategy-to-counter-backlash](https://news.bloomberglaw.com/us-law-week/data-centers-open-doors-refine-strategy-to-counter-backlash) Inside one of the dozens of data center complexes clustered near Washington sits a server sliced open like a hamburger, revealing an intricate web of processors and a copper\-plated cooling system\. Parts of the floor are transparent, exposing the stainless steel pipes channeling water through the closed\-loop cooling system\. And cabinets of blinking, whirring servers — including a gold\-platedNVIDIAbox — run proof\-of\-concept models for clients on hardware built by tech companies likeOracle,Cisco, andLenovo\. The data hall — part mini\-laboratory, part public relations strategy — was opened in Ashburn, Va\., last year by Digital Realty, a Texas\-based company that builds and leases data centers to server operators\. The 1,600\-square\-foot space, contained within a much larger building, allows those tenants to test models for their customers\. It also gives elected officials, students, and journalists a peek inside the kind of facility generating political turmoil across the country as the tech industry’s local footprint sits top of mind for voters this election season\. “In today’s climate, community members, state and local officials, they’ll get an opportunity to actually come into a data center to see what it looks like, to see how it operates,” said Okechukwu Keke, director of the Digital Realty Innovation Lab\. “It helps us communicate to them, ‘Hey, look, it’s not this big gray box\.’” The lab is an unusual case of a data center company opening to the public\. The industry’s anonymity has long been by design: The nondescript windowless warehouses contain proprietary and sensitive information on computer servers, shrouded by layers of security\.  **Okechukwu Keke, director of the Digital Realty Innovation Lab in Ashburn, Va\.**Photographer: Michael Domine/Bloomberg Tax But as the facilities become too big to ignore, that secrecy has fueled a reckoning for the industry that political scientists say has little precedent\. From local council meetings to statehouses to[congressional hearings](https://news.bgov.com/bloomberg-government-news/top-energy-panel-democrat-slams-gop-over-data-center-bill), the server farms powering artificial intelligence have drawn backlash in both red and blue states\. Data centers have even become a[wedge issue](https://news.bgov.com/bloomberg-government-news/trumps-embrace-of-ai-data-centers-adds-to-gops-midterm-peril)between PresidentDonald Trump, who fervently[supports](https://truthsocial.com/@realDonaldTrump/posts/117190477440173795)the industry, and downballot Republicans feeling heat from their voters\. The industry is confronting an opposition movement driven by a hodgepodge of AI fears and motivations: from displacement of white\-collar jobs, climate pollution, and rising electricity prices, to the loss of productive farmland, claims of[civil rights violations](https://news.bloomberglaw.com/environment-and-energy/naacp-lawyer-links-data-center-fight-to-civil-rights-legacy), and distrust of Big Tech billionaires\. Data center builders are now pivoting to make a public case for why they deserve permits and lucrative tax incentives\. Digital Realty is one of the founding members of a[new nonprofit](https://news.bgov.com/bloomberg-government-news/new-data-center-messaging-group-aims-to-counter-public-backlash)behind a multimillion\-dollar push on behalf of the industry\. Whether they succeed depends largely on whether they can let down their guard or put up their fists for a fight\. The latter strategy is doomed to fail for an industry whose widespread use of nondisclosure agreements has generated some of the fiercest blowback, said Matthew Levendusky, a political science professor at the University of Pennsylvania\. “Even if you have nothing to hide, it makes it look like you do, so it increases people’s suspicion,” he said\. “The national story is still too inchoate to tell,” Levendusky added, “but I’d be shocked if 2028 candidates don’t start developing plans for how they’ll handle AI, how they want to regulate it, et cetera\. This is going to be a part of our politics moving forward\.”  **A construction worker at the Digital Realty Data Centers site\.**Photographer: Michael Domine/Bloomberg Tax The industry’s mea culpa to the local backlash has focused on pulling back the curtains and paying more — if only a little bit\. Microsoft[pledged](https://blogs.microsoft.com/on-the-issues/2026/01/13/community-first-ai-infrastructure/)this year to pay full property taxes and[terminated](https://local.microsoft.com/blog/putting-communities-first-our-decision-to-end-ndas-with-local-governments/)nondisclosure agreements as part of the company’s Community\-First AI Infrastructure plan\.Metalast month[established](https://about.fb.com/news/2026/08/the-future-is-for-everyone/)a $1 billion fund to spend on locally identified needs, including schools, first responders, teachers, and local water and energy infrastructure\. Hyperscalers includingAmazon,Google, andOpenAIsigned a voluntary[pledge](https://www.bloomberg.com/news/articles/2026-07-23/trump-expands-ai-data-center-pledge-in-bid-to-ease-power-costs)drawn up by Trump to keep power rates affordable for ratepayers\. This month, Digital Realty joined QTS Data Centers, Compass Datacenters, and Vantage Data Centers in[establishing](https://news.bgov.com/bloomberg-government-news/new-data-center-messaging-group-aims-to-counter-public-backlash)a trade association called Infrastructure for America to counter opponents’ messaging on high energy bills and pollution\. The group plans to run ads, highlighting local leaders and others who say data centers create jobs\. Data center operators realize they need to do a better job at explaining how they work and why they’re needed, said Caleb Max, president and CEO of the National Artificial Intelligence Association, a Washington\-based trade association founded in December 2024 to advocate for more than 500 companies building and deploying AI\. Data center deals have grown[so contentious](https://news.bloomberglaw.com/litigation/data-center-foes-newest-tack-sue-locals-over-approval-process-100), he said, that people are “parsing through everything,” so it now “looks like a cover\-up” with local officials leading to higher energy prices — which he says is untrue\. “The perception is that the data centers caused all these evils, and so therefore that’s now the reality,” Max said\. “And so we have to rewrite that narrative\.” The industry’s construction workers are helping to do that, too\. The Steamfitters UA Local 602, which represents workers in Maryland, Virginia, and the District of Columbia, said it wouldn’t support any candidate for elected office who opposes “responsible data center development\.” “On this issue, our survival, our members’ paychecks, and the future of regional workforce development are on the line,” Sidney Bonilla, business manager for the local, wrote in[a public statement](https://aboutblaw.com/bmM3)\. A neighboring union that also covers Northern Virginia, the International Brotherhood of Electrical Workers Local 26, hasn’t yet made data centers such a hard\-line litmus test but the group will scrutinize both Democratic and Republican candidates to ensure they support quality jobs, said political director Donald Slaiman\. IBEW Local 26 endorsed Democrat Tom Perriello — who is running to unseat Republican John McGuire in Virginia’s Fifth Congressional House District — after he committed to supporting a data center project in the region, Slaiman said\. The union will send letters and texts to members, and arrange a get\-out\-the\-vote effort\. “We’re going to have a long discussion with everybody who we screen to make them understand,” Slaiman said\. “If they want to attract data centers to that part of the state where I represent, I’m going to be supporting them\.”  **Digital Dulles, the data center campus in Loudoun County, is projected to reach a total of 11\.7 million square feet\.**Photographer: Michael Domine/Bloomberg Tax The stakes for the industry are high and the challenges many\. The US House[plans](https://news.bgov.com/bloomberg-government-news/house-to-take-pre-midterms-vote-on-bipartisan-data-center-bill)a vote on a bipartisan bill to make data centers pay their share of energy costs after[hearing](https://news.bgov.com/bloomberg-government-news/data-center-backlash-floods-campaign-trail-as-hill-action-stalls)from constituents\. Decisions on permits, tax incentives, and power rates are all looming for state and local officials who can be more susceptible to changing political winds\. Ohio state Rep\. Jennifer Gross \(R\) said she was acting as a “voice for the people” when she[introduced](https://ohiohouse.gov/members/jennifer-gross/news/representatives-jennifer-gross-and-michelle-teska-introduce-data-center-accountability-and-citizen-protection-act-147338)a bill \([HB 983](https://www.legislature.ohio.gov/legislation/136/hb983)\) that would require voter approval before data center construction or expansion, broaden public access to data center agreements, and ban future property tax abatements\. Gross said state officials and regular citizens have been unable to get basic information about the sites, including what chemicals are being discharged into rivers and streams\. “As a legislator, it’s our responsibility to know those things,” she said\. “It’s not that I’m anti\-data center\. We are pro\-Ohio citizen, and we need to know\.” Some of the most substantial policy actions[have targeted](https://news.bloombergtax.com/daily-tax-report-state/data-center-tax-breaks-at-risk-as-states-rethink-cost-and-impact)state\-level sales tax exemptions that have soared into the billions of dollars annually\. Virginia, the biggest data center market,[assessed](https://news.bloombergtax.com/daily-tax-report-state/virginia-lawmakers-approve-data-center-energy-tax-in-budget-deal)a first\-of\-its\-kind energy tax on the industry in June\. Pennsylvania Gov\. Josh Shapiro \(D\), who’s running for reelection and is a likely 2028 White House contender, signed an executive order that requires data centers to win local approval and bans nondisclosure agreements for state agencies dealing with data center projects\. But all those actions represent mostly “low\-hanging fruit” without a durable long\-term policy that will likely be difficult to negotiate when state legislatures reconvene in 2027, said Chris Borick, a political science professor at Lehigh University\. States are trying to straddle a fine line between responding to opposition without totally killing the industry, he said\. “Let’s just put it in neutral for a little bit and see what happens,” has been governors’ approach so far, Borick said\. “There’s at least a little sense of, ‘Well, we don’t want to overshoot this and go so fast into reverse that we damage any of the good that might come from this\.’”  **Digital Realty Data Centers server showroom in Ashburn, Va\.**Photographer: Michael Domine/Bloomberg Tax At Digital Realty’s lab, nestled inside a data center the company built in 2010, a stream of elected officials arrive from all over the country to see the technology up close, Keke said\. Visitors are surprised at how unassuming and normal the computers are and how faint the hum of the servers are outside the building\. He often shows off the cooling system, which fills with water only once at setup, then recycles it over and over\. The company opened similar labs in[Tokyo](https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.digitalrealty.com%2Fabout%2Fnewsroom%2Fpress-releases%2F30091%2Fdigital-realty-opens-first-asia-pacific-innovation-lab-in-japan-to-help-accelerate-ai-and-hybrid-cloud-deployment&data=05%7C02%7Cdmoore1%40bloombergindustry.com%7Cfa8407815e8b45bbcf1f08df100c68df%7C97be21fdc6014b169920f5accc69da65%7C0%7C0%7C639247317653850748%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=iIOvHNZ%2BU%2F6szMPOQ%2BQ8wmYKuZqUsJrNB2wFPpJFJFw%3D&reserved=0)and[London](https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.digitalrealty.com%2Fabout%2Fnewsroom%2Fpress-releases%2F30231%2Fdigital-realty-brings-innovation-lab-to-london-expanding-global-ai-infrastructure-testing&data=05%7C02%7Cdmoore1%40bloombergindustry.com%7Cfa8407815e8b45bbcf1f08df100c68df%7C97be21fdc6014b169920f5accc69da65%7C0%7C0%7C639247317653835702%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=1Q4Yg5yltqhh%2BVpu7y4x5%2B4nUaL%2B0DBcF2hPXOqhVbA%3D&reserved=0)this year and planning more sites in Singapore, São Paulo, and Johannesburg\. “There are people that I think you can reach that are just not informed, that I think are willing to come to the conversation with an open mind,” Keke said\. ---