Forty-one communities had data centers on the ballot in the midterms last week. Forty of them voted against.
Two days later, the Nasdaq fell 5.5% in a single day as investors realized what these results meant for the AI infrastructure buildout.
Most of the industry is treating poor public perception of data centers as a PR problem. It’s bigger than that, and understanding the missing link could be the difference between sinking and swimming for these companies.
The Missing Link: Community Insights
Innovation is all about solving problems, and when it comes to technology, these companies are the cream of the crop. Building faster chips, cheaper compute, and more capacity is always top of mind as they stay critically focused on solving customer problems.
But when it comes to the public, the playbook was different. Instead of generating value for communities, they side-stepped them. They worked it out with elected officials, signed nondisclosure agreements, and announced the projects once deals were already done.
The voters took notice, and many worried about how the new centers could siphon water and electricity away from their resources and increase costs. And the offer of short-term construction jobs to build a technology that takes away the work of so many was far from convincing.
We saw how that story ended. Voters went around the officials and decided it themselves.
This was a core message I shared in an innovation strategy workshop with the executive team of a technology infrastructure company. Public sentiment, policies, and regulation are just as important to growth strategy as the technology itself. Without the former, we don’t get the chance to build on the latter.
This isn’t just a story about data centers. It affects any business that relies on physical infrastructure expansion to grow. New plants, distribution centers, clinics, or any type of facility that enters a new community.
Innovation Is About Adding Value
When it comes down to it, the opposition ins’t really about the buildings. Data centers have been around (and mostly ignored) for decades.
People are against big corporations extracting value from their communities while residents pay a higher price. Many aren’t against AI either. They’re opposed to the idea of having their jobs replaced by technology while getting nothing in return.
Need proof? Look at the one community that sided with the industry. In Harwood, North Dakota, a town of about 940 people, roughly 75% of voters rejected new limits on a data center project. According to Fortune, the mayor expects it to bring in $1.65 million in taxes by 2028. Residents could see what they were getting. So they said yes.
If big tech has real aspirations of growing to the valuations they give themselves, it will require a massive change in how they approach the public. They need to treat the public’s problems as issues worth solving, and give communities a real stake in the answer. Here’s how:
Long-Term Commitments:
Demonstrate to communities that you care about where you’re building. That could mean bonds that guarantee sustainable incomes for the new jobs that are promised, partnerships with local businesses and nonprofits, or joint-funded local infrastructure investments to show you want to add real value.Give A Little To Get A Lot:
Get local communities on board by giving them a stake in the game. Things like a public ownership stake or annual dividend based on financial performance bring people along and give them a reason to root for your success.
Here’s what that looks like in practice: In Scotland, developer DataVita agreed to pay up to $100,000 per megawatt, every year, into a local community fund, according to Exponential View. Compare that to Oracle’s New Mexico project, which by its math comes to about $84,000 per megawatt, paid once. That’s nearly 18 times less. One is a stake; the other is a check.Transparency Builds Trust:
Work with local residents and leaders throughout the process of building new investments. Don’t obfuscate what you’re planning; bring them into the process and build a trusting relationship.
A Holistic Insights Strategy
When planning for growth and innovation, the first task is to solve problems. The important challenge is making sure you understand the pain points of all your key stakeholders, which may extend further than just your customers.
Companies that build a holistic insights strategy and understand the true market needs, trends, and pain points are the ones that find success in their innovation efforts. They grow a capacity for foresight because they can spot what issues will arise that others don’t see coming until it’s too late.
No matter your industry, it’s important to care about what matters to people. Don’t mistake a critical growth barrier for a PR problem.
How are your community insights informing your growth and innovation strategy for 2027?
If you don’t have an answer already, Zero Point Strategy can help.
