Data Centers: Build Trust Before Pushback Builds Regulation

The AI boom has made data centers inescapable—neighbors, power draws, and political flash points all at once. The industry’s next challenge isn’t purely technical. It’s trust.

This past year, across the globe, I’ve heard a line repeated by fellow data-center insiders: “Our industry has taken off like a rocket.”

It is an apt image. In what has seemed like an instant, data centers have become objects of enormous economic and political attention, with the sector projected to reach a $7 trillion valuation by 2030. Yet rockets are notorious consumers of fuel. The same could be said of the infrastructure underpinning the AI boom.

The Cost of the Compute Boom

In 2025, North American data centers consumed nearly 1 trillion liters of water for cooling—roughly equivalent to New York City’s annual demand. In the United States alone, data centers now use 176 terawatt-hours of electricity each year, enough to power 16 million homes. Much of that water and electricity is drawn locally. Communities have noticed.

Their response has been increasingly forceful. Last year, $64 billion worth of data-center projects were delayed or blocked amid local opposition. Politicians in several states have floated moratoria on new construction. In Indianapolis, opposition to a proposed facility recently escalated into violence.

This is not merely a public-relations problem. It is rapidly becoming a political and operational one. If the industry does not address concerns over energy and water consumption itself, regulators and local governments will do it instead.

Fortunately, the technological path forward already exists. Cooling, long one of the sector’s greatest resource burdens, is also where some of its most meaningful efficiency gains can be found.

Thermodynamics Over Power: The Shift to Liquid Cooling

AI factories generate extraordinary levels of heat. As chips become more powerful, keeping them operational increasingly requires vast amounts of electricity and water. Traditional air cooling can consume up to 40% of a facility’s total energy usage, while evaporative systems depend heavily on local water supplies.

Liquid cooling offers a more efficient alternative, particularly two-phase direct-to-chip (2P D2C) systems. Unlike conventional single-phase approaches, which circulate water and glycol mixtures through hardware, two-phase systems rely on closed-loop refrigerants that boil into vapor as they absorb heat. The thermodynamics are not especially glamorous, but the implications are significant: more heat removed with fewer watts consumed.

That efficiency compounds. Because two-phase systems can operate at temperatures roughly 6–8°C higher than single-phase alternatives, they reduce dependence on chillers and cooling towers as well. The result can mean energy savings of up to 50% compared with traditional air cooling, up to 35% over single-phase cooling and substantial reductions in water usage besides.

At a moment when grid instability has become a global concern, and long-promised energy solutions such as small modular reactors remain years away, the industry has little choice but to embrace a simpler principle: do more with less.

Conveniently, efficiency and sustainability are no longer competing objectives. Lower facility energy consumption reduces operating costs while also easing pressure on local utilities and water systems—the very issues driving opposition in the first place. With 65% of Americans saying they would object to data center builds in their communities, these concerns now sit at the center of public resistance to AI infrastructure projects.

Beyond Technology: Rebuilding Community Trust

Yet technology alone will not solve the industry’s credibility problem. Data centers have long operated with a culture of opacity, partly out of competitive necessity and partly because few outside the sector paid much attention. That era is over.

In the absence of communication, communities tend to assume the worst. Some firms have responded by attempting to “educate” residents in ways that can feel less like engagement than condescension. Unsurprisingly, this rarely improves trust.

A more sustainable approach would involve treating communities as stakeholders rather than obstacles. That means explaining why facilities are being built where they are, acknowledging legitimate concerns around infrastructure strain, and making a clearer case for the economic benefits data centers can bring—from construction jobs to long-term tax revenue. It also means listening. Residents are often identifying real weaknesses in the industry’s current approach, not simply resisting change for its own sake.

For years, the data-center industry assumed that demand for compute alone would guarantee its expansion. Increasingly, that assumption looks naïve. Public acceptance may prove just as important as power availability or chip supply.

Without more efficient infrastructure—and a more honest conversation with the communities that host it—the industry risks discovering that its greatest constraint is not technological, but political. Rockets, after all, still require permission to launch.