They're Building Data Centers on Your Dime and Nobody Asked You

The AI infrastructure boom is being sold as progress. The numbers tell a different story: unproven revenue, public subsidies, rising utility costs, and communities forced to fight for basic disclosure.

There is a polished story being told about America's AI future. It is a story about innovation, inevitability, and economic development. Governors tell it at ribbon cuttings. Lobbyists tell it in committee rooms. Tech executives tell it as though the only real question is how quickly towns should get out of the way.

But the numbers behind the data center boom tell a much harsher story. The infrastructure is real. The revenue case is not.

The Money Doesn't Add Up

Start with the most important number you haven't heard: $600 billion.

That's the annual revenue the AI industry would need to generate (right now) to justify the infrastructure spending currently underway. Sequoia Capital's David Cahn calculated it: take Nvidia's data center run-rate revenue, double it to capture total data center costs, then double it again for the margins AI companies need to survive. The result is a $600 billion annual revenue requirement that doesn't exist. Not even close. That gap has tripled since 2023.

OpenAI is projected to lose $14 billion in 2026. It doesn't expect to reach profitability until 2030. Its own CFO has internally raised alarms about the company's ability to finance future computing contracts if revenue doesn't accelerate. And yet, its CEO Sam Altman has publicly discussed $1.4 trillion in infrastructure commitments.

Goldman Sachs, not exactly a bear on growth stocks, has quietly mapped out multiple scenarios where this ends badly. In one credible scenario, AI users refuse to pay premium prices for AI tools (Microsoft has already struggled to get customers to pay $30/seat for Copilot), monetization stalls, and the data center buildout collapses into overcapacity. Norway's $2 trillion sovereign wealth fund cited "high volatility" as the reason it is cautious about direct data center investment. French financial giant AXA told Bloomberg it is "exercising greater caution on the AI build-out."

Research from SightLine Climate projects that 30–50% of the announced U.S. data center pipeline for 2026 will not materialize before year end. The infrastructure is real. The revenue backing it is not.

You're Subsidizing It

While tech companies speculate with their own capital, they're also spending yours. More than 40 states have granted full or partial sales tax exemptions for data center hardware and software purchases. Because servers are replaced every two to five years, these exemptions are not one-time deals — they're perpetual, open-ended drains on public budgets.

The numbers have become grotesque:

• Texas and Virginia each lose over $1 billion per year in tax revenue to data center subsidies.

• Wisconsin is staring at an estimated $2 billion in forgone revenue, nearly equal to the state's entire current budget surplus to benefit facilities for Microsoft and Oracle.

• North Carolina's one-time construction exemptions alone could reach $2.3 billion if all proposed projects are completed.

• In Texas, the state's FY2025 cost projection exploded from $130 million to $1 billion a 1,000% increase within just 23 months.

Good Jobs First, the national economic development watchdog, notes the cruelest irony: California offers no data center tax breaks and has more than 400 facilities more than almost any other state because the real attractor is proximity to Silicon Valley, not tax concessions. The incentives aren't competing for investment that would otherwise go elsewhere. They're being harvested.

"These exemptions were likely pushed by lobbyists to legislators with central planning sympathies who believed the economy 'needed' more data centers."

— Brian Balfour, John Locke Foundation (Carolina Journal, May 2026)

You Signed the NDA. You Just Didn't Know It.

Across the country, local officials have been negotiating data center deals under non-disclosure agreements that prohibited them from revealing the company's identity, anticipated water and power usage, the terms of the deal and in some cases, even the existence of the NDA itself.

In Pine Island, Minnesota, residents discovered in early 2026 that a data center had been greenlit by their city only to learn that city engineers and developers had been coordinating for over two years before any public disclosure. In Hermantown, a Google 1.8 million-square-foot data center was kept from the public until a Data Practices Act request forced disclosure. In Farmington, residents didn't learn about a project until it was already before the city council.

In Festus, Missouri, text messages obtained through records requests showed local officials had been coordinating with developers for months before the public knew anything. One message referred to citizen critics as "a sideshow of uneducated people." The messages also revealed that Missouri Governor Mike Kehoe personally lobbied the Planning and Zoning Commission ahead of a rezoning vote. Microsoft announced in early 2026 that it would stop using NDAs with local governments after the practice drew scrutiny. That announcement alone confirmed how widespread the practice had become.

Bipartisan legislation in Minnesota is now moving to ban local officials from signing NDAs on projects involving public resources. It passed committee by voice vote with no audible dissent.

Your Power Bill Is Paying for It Too

Researchers at Carnegie Mellon University modeled the grid impact: data center growth through 2030 could increase average U.S. electricity generation costs by 8% nationally and by more than 25% in regions like Northern Virginia, the epicenter of U.S. data center concentration. More than 25 gigawatts of aging coal plants that would otherwise be retired are now projected to stay online primarily to meet data center demand, potentially increasing power sector emissions by 30% by 2030.

From 2020 to 2024, residential electricity prices climbed 25%. Industrial users, including data centers, saw rates stay flat or fall.

The starkest example is Maryland. In May 2026, Maryland's Office of People's Counsel filed a complaint with the Federal Energy Regulatory Commission, objecting to plans that would force Maryland residents to pay $1.6 billion over 10 years in grid upgrade costs for data centers located in Virginia, Ohio, and Pennsylvania. Not Maryland. Just Maryland's ratepayers footing the bill.

"Maryland customers have neither caused the need for these billions in new transmission projects, nor will they meaningfully benefit from them."

— David Lapp, Maryland People's Counsel (The Real News Network, May 2026)

Goldman Sachs has explicitly stated that AI is "contributing to increased inflation in the U.S." through elevated computer costs, software price increases, and electricity rates, and that this pressure will continue for years.

Who Pays With More Than Money

For some communities, the cost isn't measured in dollars.

Elon Musk's xAI data center, situated in a majority-Black neighborhood in South Memphis, operates gas-burning generators that have reportedly increased nitrogen dioxide pollution in the area by as much as 79% in a community already carrying a high pollution burden. The NAACP has filed legal challenges and released national principles demanding community-owned renewable energy and full public disclosure.

In Amarillo, Texas, Latino residents and water advocates are fighting what developers are calling the world's largest AI data center, citing the risk of depleting the Ogallala Aquifer the underground water source for the entire southern Great Plains. A mid-sized data center can consume as much water as a small town. Larger ones require up to 5 million gallons per day.

A national analysis by the Consumer Federation of America found that nearly half of all data center facilities are located in census tracts with above-average social vulnerability scores. In California, approximately one-third are in the state's most polluted neighborhoods.

"Big Tech is siting them in Black and poor communities, raising utility bills, polluting the air, and draining watersheds. If this trend continues, the AI economy will be built upon sacrifice zones."

— Consumer Federation of America (September 2025)

But Communities Are Pushing Back and Winning

Here's the part the industry doesn't want to become a story.

In 2025, grassroots opposition, legal challenges, and local moratoriums blocked or postponed $156 billion worth of data center projects across the United States. Legislators in at least 28 states introduced rollback bills on data center tax incentives in 2025–2026. At least 11 states are actively considering new regulations to restrict data center construction.

A Marquette Law School poll found that 70% of Wisconsinites up from 55% just months prior now consider data centers "more trouble than they're worth."

Maine became the first state in the country to pass a statewide ban on large data centers in April 2026 an 18-month moratorium on any facility consuming more than 20 megawatts. The governor vetoed it on economic grounds but simultaneously signed legislation removing data centers from the state's business development tax incentives. A dozen more states are considering similar bans.

And then there's Festus, Missouri, a river town of 12,000 people south of St. Louis, and the clearest signal that democratic accountability is not dead.

When the Festus City Council approved a $6 billion data center in a 6-2 vote over the objections of hundreds of residents who had packed a high school gymnasium voters didn't write op-eds. They voted. Days after the approval, every incumbent council member on the ballot was removed from office. A fifth member subsequently resigned. Voter turnout more than doubled compared to typical municipal elections.

The project remains legally approved. The development continues, and that reality matters. The formal process, built around NDAs and late disclosures, is structurally designed to be difficult to reverse. But the political message traveled nationally.

Developers have noticed. They are increasingly moving projects to unincorporated county land specifically to bypass city councils and municipal zoning boards. When cities push back, they go to counties. When counties push back, they go rural. It is regulatory arbitrage in real time and it only works as long as communities don't compare notes. They're starting to compare notes.

The Bottom Line

This isn't a story about whether AI has a future. The story is the infrastructure buildout underway right now is not being driven by proven demand, verified revenue, or community consent. It is being driven by corporate fear of missing out, interstate tax competition designed to benefit the wealthiest companies in history, and political processes engineered for opacity.

The public is absorbing the cost in tax revenue surrendered, in utility bills rising, in water drawn, in air dirtied, while the returns flow upward to shareholders and executives betting on a revenue timeline that their own CFOs acknowledge may be a decade away.

What Festus understood, what Maine's legislature understood, what communities from South Memphis to Amarillo are beginning to understand, is that "economic development" is not self-evidently good when the development happens to you, not for you. The question isn't whether data centers should exist. The question is who decides where, under what terms, and who pays.

Right now, you're paying. And most of the time, no one told you.

Sources: Sequoia Capital (David Cahn); CNBC, Fast Company (OpenAI financial reporting, April 2026); Goldman Sachs Research (AI data center scenarios, 2025–2026); CMU Open Energy Outlook Initiative (July 2025); Good Jobs First (April–May 2026); Carolina Journal (May 2026); The Real News Network / Maryland People's Counsel (May 2026); Consumer Federation of America (September 2025); SightLine Climate (February 2026); Politico (April 2026); Tom's Hardware (April 2026); KCUR / NPR (April 2026); Maine Public Radio (April 2026); Axios (December 2025); NAACP / ECJ