How U.S. data center backlash is spreading across Europe and Asia

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

Across the Atlantic, negative sentiment is growing in Europe, which has more at stake due to its densely populated countries and higher electricity prices, experts told CNBC.

Similar tensions are emerging in South Korea, with growing opposition to data centers near residential areas and proposals for tighter local restrictions, even as the national government pushes to accelerate development.

Public opposition has already impacted around $42 billion of data center investments in Europe, in account delays and cancellations, according to research from STL Partners. That compares to around $77 billion in the U.S.

The pushback could be the “straw that breaks the camel’s back,” Olivier Darmouni, associate professor at HEC Paris who specializes in the energy transition, told CNBC.

Scotland has paused planning approvals for new hyperscale data centers after campaigners called on the government to avoid the “cautionary tale” of Ireland, where overwhelming power demand led to a moratorium.

Constraints have been rising in the Nordics, where investors were drawn to large tracts of land and renewable energy. After a surge in power applications, Denmark passed an emergency law that could see data centers at the back of the queue for grid power applications.

Spain also proposed new data center rules this summer, requiring data centers to source 80% of their electricity from renewables. Projects in the U.K. have stalled after pushback from locals.

Much of the concern centers around water usage, power consumption, electricity prices, and the sheer amount of space that some centers require. There is also little agreement on how many permanent jobs the sector creates, and no precedent for projecting a center’s economic value per megawatt.

“The gains of AI are very diffused,” Darmouni told CNBC.

“There’s definitely been more understanding of the scale of the potential AI build-out and its geographical spread, and perhaps … more information about how much bigger these are, and that they’re a little bit more like giant ghost warehouses that consume a lot of resources and can hurt local communities in some ways.”

Europe’s denser population, and the fact that many data center operators are U.S. companies, might mean that the backlash hits harder, the professor added.