The backlash against artificial intelligence data centers could prove a tailwind for real estate investment trusts in the sector.
Protests have sprung up nationally as hyperscalers look to build data centers to train and run their AI models. Not only do the data centers take up large amounts of land, they consume enormous amounts of electricity and water and are noisy.
The debate is only expected to heat up heading into the midterm elections. A recent NBC News poll found that 69% of respondents oppose the construction of AI center centers in their area.
There are already more than 4,700 data centers across the country — a number expected to grow exponentially. PwC projects that annual data center spending will rise to $1.8 trillion in 2050 from roughly $800 billion in 2026. Some states are stepping up with legislation to restrict or ban construction, and a moratorium is already in place in New York.
While the hyperscalers are getting all the attention, another way to play the AI data center race is through real estate investment trusts. They are essentially landlords that build, own and then lease space to multiple tenants, including Amazon, Apple and Oracle, according to National Association of Real Estate Investment Trusts, an industry group.