In the first half of 2026, U.S. tech companies committed more than $850 billion to data center leases. In parallel, a battle is emerging over whether the rapid expansion of data centers is outpacing environmental safeguards.

Environmental Groups Push For a Pause on Data Center Growth

Jim Walsh, policy director at Food & Water Watch, a non-profit organization, told Benzinga in an emailed statement that some of the country’s biggest concentrations of new data centers are emerging in Virginia, Georgia, Texas, Arizona and Oregon, where communities are increasingly grappling with the industry’s environmental footprint.

Walsh pointed to research from Lawrence Berkeley National Laboratory and analysis by the U.S. Energy Information Administration that examine the growing energy demands associated with data centers and AI infrastructure.

He argued that governments should temporarily halt new projects while regulators assess their long-term impacts.

“We need a full moratorium on data centers to put a pause on the out-of-control expansion of this industry,” Walsh said, adding that policymakers need time to determine where new facilities are sustainable and adopt protections for public interests and limited water resources.

EPA Says AI Leadership And Environmental Protection Can Coexist

The U.S. Environmental Protection Agency rejected the idea that AI development and environmental protection are mutually exclusive.

In response to the questions asked by Benzinga, EPA argued that American leadership in AI is critical to both national security and economic growth.

“The truth is, America can lead the world in AI while equally protecting human health and the environment,” the agency said, while criticizing allegations about the industry’s environmental impacts.

The EPA highlighted its Water Reuse Action Plan 2.0, which encourages collaboration with data center developers to expand water reuse for cooling and reduce dependence on freshwater supplies.

It also pointed to its Clean Air Act Resources for Data Centers initiative, which helps state and local regulators navigate air permitting requirements for AI facilities.

The agency added that data centers generate more than $727 billion in annual economic impact and support over 4.7 million direct and indirect jobs across the U.S.

Utah Group Rejects Foreign Influence Claims

The debate has also spilled into local politics. In fact, local opposition to AI data centers gained momentum across the U.S. in the first half of 2026, delaying or halting at least 75 projects valued at roughly $130 billion.

Elizabeth Hutchings of Alliance for a Better Utah pushed back after investor Kevin O’Leary alleged that opposition to a proposed Utah data center project was tied to foreign-backed online campaigns.

“The only foreign interest in this data center is Kevin from Canada,” Hutchings told Benzinga, arguing that Utah residents are simply demanding greater transparency and meaningful public input before projects that could affect their communities for decades move forward.

O’Leary did not immediately respond to Benzinga’s request for comments.

Data Center Boom Puts Pressure on America’s Aging Power Grid

Goldman Sachs projects global data center electricity demand will rise 220% from 2023 levels by 2030, with the U.S. expected to account for roughly 60% of that growth.

In February, President Donald Trump addressed the issue during his State of the Union address, introducing the “Ratepayer Protection” initiative to require major technology companies to produce more of their own electricity as pressure on the nation’s aging power grid grows.

Meanwhile, earlier this month, Gov. Kathy Hochul (D-N.Y.) unveiled a temporary halt on new hyperscale data centers requiring 50 megawatts or more of electricity. Trump criticized the policy, calling it a “terrible decision.”

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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