Minnesota towns halt data centers as AI skepticism rises

Minnesota communities pump the brakes on data centers

Several Twin Cities suburbs have enacted temporary bans on data center construction, reflecting growing public anxiety about artificial intelligence infrastructure and who bears its costs.

Inver Grove Heights passed a moratorium on June 26 following public opposition to a proposed 5-megawatt facility — relatively modest by industry standards, where the largest centers consume hundreds of megawatts. More than 20 residents spoke at the city council meeting, voicing concerns that extended beyond immediate impacts like noise and electricity consumption.

"In data centers, profits are privatized, and the problems are publicized," one resident told the council. Another warned that when "this bubble bursts — which many smart people say it will — we're going to be left holding the bag."

Why it matters

Data centers have become a focal point for broader unease about AI's trajectory. Even small projects now trigger resistance as communities question whether they'll shoulder environmental and financial burdens while tech companies capture the benefits. The pattern suggests infrastructure developers will face mounting pressure to address cost distribution and resource consumption.

Polling reveals widespread wariness

New survey data underscores the depth of public concern. According to a June Star Tribune/KARE11/University of Minnesota poll, more than three-quarters of likely Minnesota voters express worry about AI use in daily life. Two-thirds would oppose a data center near their homes.

Nationally, opposition appears driven less by proximity than by principle. Consulting firm Milltown Partners surveyed 6,800 Americans and found only 8 percent of data center opponents actually live near an existing facility.

The moratorium wave

Inver Grove Heights isn't alone. Eagan recently enacted a similar temporary ban and was subsequently sued. Minneapolis passed its own moratorium, though it exempted downtown areas. Elk River's council rejected a 33-megawatt facility and is expected to pursue a ban soon.

These actions come despite the relatively small scale of some proposed projects, suggesting the opposition stems from concerns about AI's broader implications rather than specific local impacts.

Industry responds to water concerns

One frequent criticism centers on water consumption for cooling systems. Nvidia recently unveiled new cooling technology it claims can dramatically reduce both water and energy requirements for AI data centers, though the announcement came as local opposition was already mounting.

What comes next

The temporary bans may force a reckoning. Companies and policymakers will likely need to provide clearer answers about resource consumption, cost distribution, and community benefits before projects can move forward — even relatively small ones that wouldn't have triggered scrutiny in the past.

The details were first reported by Axios Twin Cities.