Berkshire Hathaway CEO Greg Abel notes growing U.S. community resistance to data center construction
Quick Look
- Berkshire Hathaway CEO Greg Abel said in a CNBC interview that communities across the U.S. are increasingly pushing back against data center construction due to concerns over power consumption and local resource strain, noting Berkshire's interest in serving hyperscalers only if it does not impact rates for other customers.
- Analysts say the issue could influence midterm elections, with New York enacting a moratorium and other states considering restrictions.
AI-generated summary
Why It Matters
Data center construction is expanding across the U.S. to support growing demand for cloud computing and AI infrastructure, but communities are raising concerns about increased electricity usage, strain on local power grids, and limited long-term job creation.
Berkshire Hathaway CEO Greg Abel noted the growing resistance to the construction of data centers across the U.S. in an interview with CNBC's Becky Quick on Wednesday morning.
"There is a lot more pushback in the communities across the U.S.," Abel said.
Berkshire's interest in the ongoing computing facility buildout is mostly related to power and electricity generation for the sites, Abel commented, noting that the conglomerate wants to be in business with supercomputing companies provided they keep their costs contained.
"We are interested in serving these hyperscalers ... if there was no impact to the rates of our other customers," he said.
Investors and analysts on Wall Street have echoed Abels comments, pointing to increasing organized political resistance to major computing construction projects that can siphon local natural resources.
New York State has enacted a moratorium on data center construction, while many other states have pending bans and restrictions of varying intensity. There are about 4,700 data centers in the U.S. and the number is growing.
Analysts at Mizuho said in a Tuesday note to clients that investors think data centers could be a significant issue in the midterm elections.
"This is clearly an evolving situation as some investors question the set-up with upcoming mid-term elections and validity of claims around resource consumption and limited long-term job creation," Vikram Malhotra at Mizuho wrote on Tuesday.
What to Watch
AI outlook — possibilities, not facts
More states will implement restrictions or moratoriums on data center construction in the next 6-12 months
Likely · Within months
Open Questions
- Which specific states besides New York are considering data center bans or restrictions?
- What are the exact power consumption figures for the average data center and how do they compare to local residential usage?
- How many jobs do data centers typically create during construction versus operation?
- Are there any federal-level discussions or regulations being considered regarding data center energy use?
