The Data-Center Divide

The Saline Township board in Michigan approved a $16 billion data center for Oracle and OpenAI after being sued by developer Related Digital, which claimed exclusionary zoning. The 1.4-gigawatt facility, part of the Stargate AI infrastructure project, will occupy 250 acres of farmland and draw enough electricity to power Detroit, sparking local opposition over emissions, light pollution, and traffic.

The governing board of Saline Township, a farming community of some 2,200 residents in Washtenaw County, Michigan, meets on the second Wednesday of every month in a white clapboard hall down a muddy, unpaved road. On a rainy evening this March, the hall was packed with members of the public listening intently for mention of the single issue that has dominated discussion in Saline since last year: the approximately $16 billion, 1.4-gigawatt data center being developed there by Related Digital, an offshoot of the powerful New York real-estate firm Related, which is owned by the billionaire Stephen Ross. The campus, built on behalf of the software giant Oracle and OpenAI, is part of a massive AI-infrastructure project known as Stargate, which aims to bring 4.5 gigawatts of additional data-center capacity to the United States. Slated to occupy 250 acres of local farmland and to draw enough electricity from the grid to power Detroit, it is the largest economic scheme ever attempted in the state of Michigan. At first, Saline’s five-person, nonpartisan governing board resisted the development. Last September, after outcry from locals, members voted 4–1 to deny Related Digital the rezoning permissions required for the data center’s construction. But lawyers for Related Digital and property owners of the proposed site promptly sued Saline, claiming that the company had been the victim of “exclusionary zoning” that prevented the free use of private land. The possibility of an expensive legal fight with a giant corporation had the intended effect. After consulting with its attorneys, the board conceded, accepting a settlement offer that would allow the data center to proceed with only minimal concessions from the firm. To Robby Dube, a Minneapolis-based attorney specializing in government disputes, the lawsuit was a familiar corporate maneuver. “I’ve seen this in my cases all across the country,” he told me. “It is a shockingly similar playbook every single time.” The only difference was how quickly the board folded. In Dube’s view, the case was meritless to begin with, but Saline’s board had been terrified by threats along the lines of, “I’m going to come here and obliterate you. You will be bankrupted. I have infinite money.” The board—adopting a milder attitude than its counterpart across Lake Michigan in Port Washington, Wisconsin, where city officials had a peaceful data-center opponent violently arrested at a public meeting—justified its surrender by claiming that, while board members still opposed the project, their hands were tied. At first, this recent turmoil was barely apparent at the March meeting, as township officials quietly deliberated on such issues as the fire-department budget and conservation easements. The edifice under construction just a few minutes’ drive away was invoked in diffident terms, as when board members discussed the small fines they had negotiated with Related Digital for construction trucks that violated local ordinances and debated whether a special post-office box would be required to receive them. But when Saline residents finally had their chance to speak, a volley of pointed questions followed. They asked about the emissions from the fossil fuels that would be used to generate power for the data center; the bright lights from the construction site shining into children’s bedrooms late at night and before dawn; and local roads that had been rendered dangerous by constant construction-related traffic. None of these impassioned complaints appeared to engender much sympathy from the board, or indeed from the three Related Digital executives who were sitting against the wall observing the proceedings. The woman who’d asked about the construction lights was Kathryn Haushalter, a Marine Corps veteran who served in Helmand province in Afghanistan. She and her husband own a farm, where she homeschools four of their five children less than three hundred yards from the data center’s construction site. Haushalter is familiar to both the Saline governing board and Related Digital: late last year, she filed a motion to defend the board’s original rejection of the rezoning proposal, alleging that the settlement had violated the Open Meetings Act. A judge summarily denied her request in February, but Haushalter wasn’t ready to give up. Although her legal bills were already in the “tens of thousands,” she was planning to fight on. “I always thought, Thank God I live in a country where I have a voice, and the little guys matter, ” Haushalter told me. “And then this happens.” The Stargate project—endorsed and promoted at every level of authority, from the White House to the governor of Michigan to the local worthies of Saline—had tested her faith in democracy. “I expect the federal government not to care about the little guys, but your local government, your neighbors—my neighbors are on that board,” she said. “It’s shocking. Nobody’s listening to us. The people who we voted in aren’t listening to us. The regulatory agencies aren’t protecting us. And now, we feel like the law is failing us.” As ever-larger data centers proliferate across the country, Saline is one battleground among many in the fight to halt their construction. There are several others in this corner of Michigan alone. Lowell Township, a hundred miles to the northwest, drove off a project at the beginning of the year. The night before the board meeting I attended in Saline, officials in York, the next township over, voted in favor of a six-month moratorium on all data-center proposals. Earlier that week, I had dropped in on a meeting in the township of Lyon, where irate locals confronted a commission that had conditionally greenlit a six-building, 172-acre data-center project. “They approved it in one meeting A Dunkin’ Donuts had to go through multiple public hearings, but this $4 billion data center required no public hearing,” said Michaila Czarnik, one of the leaders of a local opposition group. We met in the parking lot outside the township hall, where she was distributing protest signs to other attendees. “It was done in a single conversation and kept very much under wraps. I found out about it on Facebook, like everyone else,” Czarnik told me. According to the research project Data Center Watch, there are now 142 groups like Czarnik’s operating across twenty-four states. Some have been highly effective. A review of public records by the climate-news outlet Heatmap found that at least twenty-five data-center projects were canceled in 2025 due to local pushback, and that ninety-nine more were being contested as of January. This resistance is significant in its own right, but it is also the most visible manifestation of growing skepticism toward the promises of AI. Recent surveys by the Pew Research Center have found that half of Americans are more concerned than excited about the increased use of AI in daily life; a similar proportion believe that it will worsen our ability to think creatively and form meaningful relationships; and Americans are more likely to believe that AI will have a negative effect on education and the economy than a positive one. Politicians and AI evangelists have pitched the rapid construction of new data centers as a prerequisite to an “AI revolution” that will unleash unprecedented technological advances, such as the discovery of solutions to climate change or a cure for cancer. For local communities, however, this revolution means crippling electricity bills, a threatened water supply, and ceaseless noise and pollution from data centers’ diesel-powered backup generators. These fears have driven thousands of citizens to pack town halls deep into the night to voice their opposition, scenes that recall the origins of the Tea Party movement in the early 2010s. But whereas the Tea Party was fostered by support from moneyed interests, notably the right-wing Koch machine, and quickly adopted by segments of the Republican Party, data-center resistance has not received any real institutional backing, nor is it a strictly partisan movement. “The fight over AI data centers is not about right versus left. It’s not about Democrats and Republicans. It’s not about suburban versus rural. It’s really about top versus bottom,” said Saul Levin, a Washington-based activist who supervises a Signal chat connecting data-center opposition groups around the country. “The most elite people—billionaires, governors, tech oligarchs—are in favor. But if you talk to working-class Republican Christians in Texas, if you talk to anarchists in Tennessee, if you talk to apolitical moms and IT workers in the state of Oregon, or farmers, you hear pretty similar things: ‘We don’t want some massive building that’s going to make noise and pollute our water and air and raise costs for us with no tangible benefits.’ ” Czarnik’s description of her own group echoes Levin’s point. “We’re completely bipartisan,” she told me. “Hugely so. The output from the community, on top of being bipartisan, is that nothing like this has ever happened to them in their lives. A lot of people feel disenfranchised. Basically, we don’t trust anybody.” “People have been way out ahead of the politicians,” Faiz Shakir, the founder of the media nonprofit More Perfect Union and Bernie Sanders’s 2020 presidential campaign manager, told me. “They were mobilizing fights against data centers long before many politicians noticed. And they were winning fights in places like Tucson, St. Charles, and Indianapolis.” Shakir pointed out that only a handful of national figures on either side of the aisle have forcefully criticized AI, singling out Republicans like the Florida governor Ron DeSantis and the former congresswoman Marjorie Taylor Greene as notable outliers in their party. There are hardly more examples on the Democrats’ side, where Sanders and Alexandria Ocasio-Cortez’s call for a temporary pause on all data-center construction has attracted only marginal support. As for the Democratic leadership, their preferences are readily apparent. Last December, the House Minority Leader, Hakeem Jeffries, announced the formation of a House Democratic Commission on AI and the Innovation Economy that was stacked with members deemed reliably friendly to the AI industry. Jeffries installed as co-chair the North Carolina representative Valerie Foushee, who was then locked in a tight primary race with an avowedly anti-AI challenger, Nida Allam, in a district facing a proposed data center. Foushee’s appointment had the desired effect of directing a gusher of AI cash into her campaign, enabling her to edge out her progressive opponent by one percentage point. The cause for Republicans’ general unwillingness to embrace anti-AI politics is obvious: Donald Trump himself is closely aligned with the tech oligarchs who run the industry. But for Democrats, the aversion may seem more puzzling. After all, local Democratic candidates running in Virginia and Georgia on anti-data-center platforms swept to victory last year, and a March poll by Quinnipiac University found that a majority of American adults oppose the building of a data center in their community. Why, then, has the party failed to capitalize on the obvious political opportunity to get behind this opposition? The political economy of Michigan provides an instructive explanation. Governor Gretchen Whitmer, often touted as a viable Democratic presidential nominee, has always offered a helping hand to major corporations, even when the benefits to her constituents are dubious. During her time in the Michigan state legislature from 2001 to 2015, she voted in favor of $4.5 billion in business subsidies, siding with corporate interests more frequently than the vast majority of her colleagues. According to the nonprofit newsroom Bridge Michigan, since taking office as governor in 2019, Whitmer has spent nearly a billion dollars of taxpayer money on corporate incentives that have delivered only a fifth of the jobs they promised to create. Notably, in 2023, she committed some $175 million to a Chinese-owned electric-vehicle battery plant that generated significant local opposition and ultimately amounted to nothing. Michigan’s burgeoning data-center industry has given Whitmer more opportunities to offer financial inducements to some of the richest companies in the world. In 2024, she backed legislation to grant total exemptions on sales and use taxes for large-scale data centers, arguing that they would deliver “jobs and economic development” to the state. Initially blocked by recalcitrant Democratic members of the House, the legislation was reintroduced during a lame-duck session following the 2024 election. At the urging of the outgoing Democratic House speaker Joe Tate, it passed with Republican votes and went into effect in April 2025. Companies such as Oracle and OpenAI demanded more than just tax breaks to operate data centers in Michigan, however; they wanted a guaranteed power supply from the state’s dominant utility, DTE Energy. DTE was only too happy to comply. Sales of electricity have long been flat, but the proliferation of data centers promises a massive increase in demand, and in turn, higher profits, making utility companies eager allies of the AI industry. Last October, DTE requested state approval on two contracts to provide 1.4 gigawatts of power to the Saline data center. Significant portions of the contracts were redacted, but the three Whitmer-appointed regulators on Michigan’s Public Service Commission waved them through anyway, agreeing to DTE’s request that the contracts be accepted without public debate. Whitmer personally signaled her support, stating via press release that “Michigan has always been a leader in building the next big thing” and extolling the thousands of construction and “good-paying jobs” in reality, somewhere between thirty and a hundred permanent hires that the Saline data center would allegedly generate while protecting ratepayers from price hikes. Among the many Michiganders aghast at this lubrication of a multibillion-dollar corporate initiative cloaked in secrecy was one official with the power to do something about it. Dana Nessel, Michigan’s attorney general since 2019, has long been a thorn in the side of DTE, complaining vehemently to the public about the utility’s repeated demands for rate increases. She has no higher opinion of the Public Service Commission, which she derided when we met in her Lansing office as “more like a shill for the utility companies than a protector of consumers in this state.” Nessel discussed political realities with a candor rare among public officials. “These companies, particularly DTE and Consumers Energy, which are the top two energy providers in our state of both gas and electric, are also, by happenstance, two of the biggest political contributors, and they contribute to everybody. That means almost every single state legislator takes money from them,” she told me: “the governor, the secretary of state for some reason . . . I do believe that the Public Service Commission has been bought and paid for by DTE and by other utilities.” Her specific complaint about the Saline deal was that the heavily redacted contracts made it impossible for her or the public to know how the utility planned to supply the power required to run the Stargate campus day and night “and yet somehow still be able to provide enough electricity to the rest of the DTE customers without raising our rates.” She was therefore demanding that the contracts be reconsidered in a “contested hearing,” in which their terms could be evaluated by experts on all sides. As Nessel explained, public opinion in Michigan is largely uniform on the subject of data centers. On most of the big issues facing the state, “you really have a red or blue side,” she said. “Not so when it comes to data centers. We’re seeing a lot of crossover. And I’ve seen polls where as high as eighty-nine percent of our state residents do not want to see data centers come in in the way that they are being permitted to right now.” But some of Michigan’s highest-profile candidates in the forthcoming midterm elections are throwing their weight behind these projects anyway. The current secretary of state, Jocelyn Benson, a front-runner in the race for the Democratic gubernatorial nomination, has expressed enthusiasm for the Saline data center, which, according to her spokesman, will create “thousands of jobs in southeast Michigan.” Her support, garnished with pious caveats about the need to prevent the center from boosting residents’ already sky-high electricity bills or curbing access to clean water, became easier for Michiganders to understand when it came to light that her husband, Ryan Friedrichs, is a vice president at Related Digital and had been directly involved in the project. Ross, Related’s billionaire owner, contributed more than $8,000 to Benson’s campaign. As of this March, Friedrichs was apparently still taking a close interest. Sharp-eyed attendees at the town meeting I attended said that Gregory Gushee, one of the senior Related Digital executives monitoring the proceedings, had been busily texting a “Ryan F” throughout the evening. “They must still be nervous about us,” said Kathryn Haushalter, who spotted the messages. Clearly, money has played a decisive role in the politics of AI, both on the federal level—where Trump’s attempts to block states from regulating any aspect of AI were surely influenced by the millions of dollars he’s received from luminaries such as the OpenAI co-founder Greg Brockman—and in states like Michigan. But it is no less influential in local politics, all the way down to individual counties. Consider Virginia’s Prince William County, on the outskirts of Washington, the proposed site of a “digital gateway” consisting of thirty-seven data centers that, if completed, would be the largest data-center complex in the world. Local resistance to the project has been fierce since the beginning. But a Democratic majority on the county’s governing board of supervisors nonetheless voted to rezone the required agricultural land for development in December 2023. As in Michigan, Virginia’s principal utility, Dominion Energy, wields immense power thanks to its bottomless purse. Since 2010, the company has contributed more than $1 million to Luke Torian, the delegate representing Prince William County in the state assembly. During the 2023 election cycle, when discussions regarding the digital gateway were under way, Torian raised some $800,000 from Dominion and other entities with a stake in getting the gateway built, including the Data Center Coalition, Amazon, landowners near the proposed site, and, not least, the International Brotherhood of Electrical Workers, which has become an important part of the data-center lobby. When he wound up running unopposed, he was free to distribute his war chest to other campaigns. In October 2023, two months before board members were due to cast their crucial rezoning votes, Torian disbursed some $42,500 to the coffers of four Democrats running for reelection to the county’s board of supervisors, all of whom went on to support the digital gateway. The fight then moved to the courts, where, last August, a judge struck down the rezoning decision on the grounds that the vote had been taken without adequate public notice. But the board of supervisors didn’t relent: to date, Prince William County has spent $1.6 million of taxpayers’ money in legal fees defending the project, which was finally killed by the Virginia Court of Appeals in April. The case of Virginia, which hosts more than a quarter of all the hyperscale data centers in the world, shows just how difficult it can be to dislodge the influence of industry money. For years, developers and technology companies have enjoyed a hearty welcome from state authorities eager for promised jobs and economic gain. In 2008, when the state’s Democratic governor, Tim Kaine, approved a sales-tax exemption for data centers over a certain scale, companies flocked to the state to take advantage. As thousands of acres of farmland disappeared under concrete colossi and residential neighborhoods began to reverberate with the ubiquitous hum of machines over the next several years, the state government and legislature rejoiced in the torrent of investment, echoing calls to “win the AI race with China” even as Virginians’ power bills edged remorselessly upward, climbing by some 30 percent since 2021 alone. Republicans, data-center enthusiasts, controlled the state government from 2022 to early this year, with Glenn Youngkin as governor. During that time, efforts to control the spread of data centers went nowhere in the assembly. Bills deemed unfriendly to the industry often failed to advance out of committee. If they passed, they were inevitably vetoed by Youngkin. “There were probably forty-plus bills that touched on regulating data centers ,” Dan Holmes, a lobbyist who tracks data-center legislation in Richmond, recalled of each of the last two legislative sessions, when Republicans still ruled. “Nothing passed.” The 2025 state elections, in which Democrats gained control of the House and the governor’s mansion, seemed to herald change, with the victory of several critics of data-center development. Abigail Spanberger, the newly elected governor, promised to be less amenable to corporate demands than her predecessor—even if she still seemed overly impressed by national-security arguments about the threat of Chinese competition in AI. The most serious assault on the industry thus far came in February, when Senator L. Louise Lucas, a former shipyard worker and the chair of the Virginia Senate Finance and Appropriations Committee, advanced a proposal to repeal the data centers’ cherished sales-tax exemption, which now costs the state an estimated $1.9 billion a year, money she said was needed for social services, transport, and education. Her proposal easily passed the Senate, but it went nowhere in the House, where Democrats’ efforts at reform have hit an obstacle in the figure of the House Speaker Don Scott, the recipient of more than $3 million in campaign donations from Dominion. “The Speaker of the House and, to some degree, the governor, are signaling they’re not willing to take away the toys from the data-center industry,” Holmes said. Even so, the fact that a few unwelcome bills have come close to succeeding has the industry nervous, he suggested. “They’ve never been so fearful,” Holmes said. He worries that the data-center companies could unleash even more financial firepower as a result, potentially dwarfing Dominion’s already considerable contributions. “And if that happens,” he said, “then good luck reforming the industry.” If Virginia Democrats are beginning to style themselves as data-center opponents, in Michigan, the politics of data-center resistance remain up for grabs. In the governor’s race, I had to look to the Republican lineup to find a full-throated critic. Tom Leonard, the former Speaker of the House in the state legislature, has built his campaign around the issue since the day he went on local TV and said that he was a “hard no” on data centers in the state, based on their failure to deliver promised jobs and the likelihood that they would drive up utility bills. His comments drew an enthusiastic response. “The next day, I woke up and I just had dozens of messages on Facebook and in my email, people saying, ‘Hey, you’re the only candidate for governor willing to speak up. Thank you,’ ” Leonard told me. “I’ve been doing this for several months, and I can tell you there is a huge grassroots movement that a lot of politicians are underestimating right now. They don’t understand how important this is going to be to the electorate as we head into November.” Anthony Hudson, running as a Libertarian, has also said that he would shut down data-center proposals as governor. Another candidate who has joined the anti-data-center fray is Abdul El-Sayed, currently running to be the Democratic nominee for the state’s open Senate seat, on a platform proposing strict regulation of such projects. “Democrats should be taking more advantage of this moment to stand up to oligarchs and push back,” he said bluntly. “But unfortunately, if you’re taking money from exactly the same oligarchs, you’re probably not going to do that.” Given that we live under a political system that runs on money, it may prove impossible to stop data centers’ onward march, even if the grassroots rebellion continues to spread. But what if their financial defenses run short of cash, or the model on which the entire AI industry subsists founders? Haushalter and other data-center resisters spoke of their worry that the AI bubble might pop and leave their community with the empty concrete shells of abandoned complexes, good for nothing except, as I heard one township board member quip, “pickleball.” As it stands, the data-center economy appears remarkably unstable in light of the shocks caused by Trump’s war on Iran. The price of the diesel needed to fuel data-center generators has already climbed by 30 percent. Supply-chain disruptions will only increase the exorbitant cost of building data centers, as well as the time it takes to complete them, during which the projects yield no revenue. Inevitable delays compound the interest on the debt burden for developers and for AI companies like Oracle. “Most of these loans for data centers are interest-only until construction is finished,” Ed Zitron, a technology reporter and trenchant critic of the AI economy, told me. “So all that principal isn’t getting any lower. You’re just handing money to the bank. It’s not a great situation at all.” In recent months, it seems that Wall Street has begun to catch on to these unappealing facts. Last December, even as the Saline project enjoyed the approval of Michigan’s utility regulators and the township board caved to Related Digital’s threats, Blue Owl, a private-equity firm that has been a leading data-center financier, announced that it was pulling out of the project, to which it had previously committed $10 billion. The firm cited Oracle’s rising debt levels and its extensive AI spending as justification. While Stargate found other financing, worries over debt loads persist. Perhaps we’ll soon have a surfeit of pickleball courts.