How the backlash against US data centers will spread to Europe and Asia

As the AI ​​boom becomes a major part of the political debate, public backlash against U.S. data centers spreads to Europe and Asia, raising risks for investors.

Across the Atlantic, negative sentiment is also rising in Europe, where Europe is at greater risk because of its dense population and rising power prices, experts told CNBC.

Similar tensions are brewing in South Korea, where opposition to data centers near residential areas has grown and tougher local regulations have been proposed, despite the government’s push to accelerate development.

Public opposition has already affected around $42 billion in investments in European data centers in the form of account delays and cancellations, according to a study by STL Partners. This equates to approximately $77 billion in the United States

Olivier Darmouni, an associate professor at HEC Paris who specializes in energy transitions, told CNBC that the backlash could be “the straw that broke the camel’s back.”

More than 70 data center projects were rejected or restricted in Europe between January and April, according to the European Data Center Monitor. This is more than the number of cases in all of 2025. It turns out that the backlash is snowballing from local city halls to courts, regulators and Congress.

Scotland has suspended planning approval for new hyperscale data centers after campaigners called on the government to avoid a “red flag” like in Ireland, where overwhelming electricity demand led to suspensions.

Constraints are growing in Northern Europe, where investors were drawn to large tracts of land and renewable energy. In response to the rapid increase in power applications, Denmark passed an emergency law that could put data centers at the end of the grid power applications.

Spain also proposed new data center regulations this summer that would require data centers to source 80% of their electricity from renewable energy. The project in the UK has been stalled due to opposition from local residents.

Many of the concerns center on water usage, power consumption, electricity costs, and the enormous amount of space some centers require. There is also little agreement on how many permanent jobs the sector will create, and no precedent for predicting the center’s economic value per megawatt.

“The benefits of AI are very widespread,” Darmouni told CNBC.

“We’re definitely understanding more about the scale of potential AI builds and their geographic spread, and we’re probably going to learn more about how big AIs are and how they’re like giant ghost warehouses that can consume a lot of resources and, in some ways, harm local communities.”

The professor added that Europe’s high population density and the fact that many data center operators are American companies could make the backlash even greater.

Home to technology giants Samsung Electronics and SK Hynix, South Korea is at the center of the AI ​​supply chain. In June, the government listed AI data centers as one of its three major investment projects, along with semiconductors and physical AI.

However, the government’s efforts to build the necessary infrastructure have been met with resistance at the local level.

Residents in Geumcheon district, southwest of Seoul, are asking authorities to revoke building permits and halt construction of data centers near their homes, according to the local government.

In July, authorities announced plans to require consent from a majority of residents living within 200 meters of proposed data center sites and introduce a three-tier system for project review and dispute mediation.

For months, residents have been protesting the plan by gathering in front of local town halls on weekday mornings. According to local media, the demonstrations had lasted 172 days as of mid-August.

In the city of Gwacheon, just south of Seoul, a local councilor proposed an ordinance aimed at protecting nearby residents from risks associated with data centers that operate 24 hours a day, including the possibility of fires caused by backup batteries.

Despite the backlash, the AI ​​boom shows little sign of slowing down.

But “the community’s ability to derail a $10 billion (data center) plan is very strong,” said Asha Walters, managing director at Alvarez & Marsal.

He told CNBC that the historically business-friendly environment in the United States has made it easier to overcome the backlash.

But in Europe and Asia, Walters said there are “hotter and colder” trends at the country level in terms of where demand is headed. The “push and pull” between favorable conditions for data centers and more stringent regulations can be challenging for investments.

Even if the project is withdrawn before construction begins, the funds are likely to have already been spent, so public backlash could raise costs for the project.

Most of the capital investment happens after the permit is obtained, but operators spend a lot of money to get there, “so if you don’t get the permit, there could be some loss there,” Walters said.

“Digital infrastructure is becoming more visible, and it is natural for communities to want to understand what is being built near them, why it is needed, and how local impacts are being managed,” said Eulalia Flo, Vice President, EMEA Growth and Emerging Markets. Equinixone of Europe’s largest data center operators.

“We don’t see this as a structural constraint to growth, but the policy environment is truly tightening in some markets,” Flo said.

But Dominic Ward, CEO of data center operator Vern, said the rise of AI represents a “very broad misunderstanding of the industry.”

“We used to be a completely unknown part of the economy,” Ward told CNBC. “We were just a black box. We were just a building with things that no one understood. Now we are one of the fundamental layers that drive the economy.”

He added: “Everyone now knows where they are, so there is no room to hide.”