President Trump used Truth Social this week to warn any town weighing whether to fight a data center project. Communities that turn them away, he wrote, are choosing to be 'backwards and poor.' Towns that welcome them, he said, will get lower taxes and jobs 'all over the place.' He called the industry the 'Golden Goose,' said other places would happily take the investment instead, and warned that China 'could not be happier' watching American towns turn it down.
The numbers come first, and on the growth argument, Trump has a case. AI-related computing infrastructure investment hit roughly 1.4% of U.S. GDP in the first quarter of 2026, up from 0.7% a year earlier, and is now the largest driver of growth in U.S. private investment, according to Epoch AI. The St. Louis Fed found information-processing equipment made up 39% of total GDP growth through the third quarter of 2025 — a bigger share than during the dot-com boom. Data centers' dollar contribution to GDP growth has passed consumer spending for the first time ever, a notable milestone given consumer spending typically makes up about two-thirds of GDP.
Yet few issues cut across party lines the way data centers do. What makes them valuable nationally is exactly what makes them unpopular locally. A single facility can draw as much power as a mid-size city and remake a town's tax base within months, with neighboring households absorbing the costs. Conservatives who normally favor deregulation are turning up at town meetings over property rights and distrust of distant tech billionaires. Progressives who favor the technology's economic promise are objecting on environmental grounds. With midterms four months away, candidates in both parties are spending campaign money just to get the issue 'right' rather than touch it.
The jobs picture explains some of the resistance. A $10 billion campus in Lebanon, Indiana, employs more than 4,000 workers at the height of construction — but once the servers are running, the project keeps around 300 permanent employees, a ratio of 13 construction jobs for every one that lasts. A typical data center supports fewer than 200 local jobs long-term, per the U.S. Chamber of Commerce. In Virginia, the nation's largest data center market, projects create one permanent job for every $54 million invested, according to a MinnPost fact-check, versus 17 jobs per $1 million across the broader economy. At least 10 states are losing more than $100 million a year in revenue from data center tax incentives alone.
The layoff math adds to the skepticism. Microsoft cut nearly 5,000 jobs in early July even as it kept pouring billions into AI data centers, and nearly 200 economists and researchers warned in July that AI could cause large-scale job displacement over the next decade on a scale compressed from what took the Industrial Revolution generations to unfold.
Capital rewards clear rules, and the data center boom is real capital doing real work — the GDP figures prove it. But the same boom is being built on a foundation of state tax carve-outs that pick winners and drain public coffers by nine figures a year in state after state. That is not free enterprise finding its own way to work; it is government subsidizing a politically connected industry while ordinary property owners absorb the power bills and the job losses. If Washington wants towns to stop saying no, the fix is not a Truth Social insult — it is ending the corporate welfare that makes the fight necessary in the first place.
