American banks and asset managers have begun considering local resident protests when assessing credit risks for data center projects. This was reported by Reuters, citing top executives from several Wall Street financial institutions.
According to them, when evaluating project financing, lenders examine local community objections and prefer states more favorable to such constructions. Interest in the sector remains strong.
“I primarily look at two things. First, the project’s readiness, and second, its credit quality. Readiness means having all necessary permits and approvals, as well as support from the people who will live nearby,” said Karen Fang, head of infrastructure and sustainable finance at Bank of America.
Other sources noted that financing negotiations begin at least a year before construction starts and continue throughout the process, so a failed project results in lost time and additional due diligence for the bank.
“The amount of work required to secure a bank loan for such a project is significant. Signing the loan agreement is just the beginning. Throughout construction, developers must repeatedly confirm compliance with financial covenants and monitoring requirements agreed with lenders before each tranche,” said Kevin Curtin, head of AI infrastructure investment banking at JPMorgan.
Morgan Stanley CFO Sharon Yeshaya described the industry as capital-intensive and reliant on fundraising. The bank assists clients in raising capital, organizing syndicated placements, ensuring full execution, and finding ways to mitigate risks, she emphasized.
Canceled and Blocked Projects
According to Data Center Watch, in the first quarter of 2026, at least 75 projects worth about $130 billion faced local opposition. Meanwhile, Goldman Sachs forecasts that major tech companies’ AI spending will exceed $6 trillion by 2030, far surpassing investments in internet infrastructure during the dot-com era.
Microsoft, Meta, Oracle, Amazon, and Alphabet have already accumulated around $1.09 trillion in future lease obligations, mostly for AI data centers.
Banks are already involved in several contentious projects. JPMorgan and Morgan Stanley arranged a $12.3 billion bond placement for BlackRock, a Meta partner for a data center in El Paso, Texas, according to a document seen by Reuters journalists.
JPMorgan, Morgan Stanley, and BlackRock declined to comment. Meta stated it is engaging with residents, authorities, and local organizations.
QTS, owned by Blackstone, did not seek bank financing for the Prince William Digital Gateway project in Virginia, a source said. The project faced strong opposition and was canceled in July. QTS declined to comment.
Morgan Stanley and KKR Capital Markets led a $9.7 billion credit line for Dallas-based operator CyrusOne. Local residents oppose its $500 million facility in Sangamon County, Illinois.
CyrusOne confirmed the financing is secured but did not disclose details. According to a source, part of the line can be used for new construction only with all permits and leases in place.
Bank of America acts as structuring agent and financial advisor for Related Digital, the developer of a $16 billion campus in Michigan (a project for Oracle). It also faced resident opposition but continues to progress.
Industry Efforts to Address Concerns
An unnamed foreign bank representative said investors are already pricing in the risk of project cancellations, anticipating continued demand for computing power. Operators, in turn, try to prevent conflicts early on, such as considering building their own power plants on-site.
Operators aim to avert conflicts at the design stage, for example, by considering on-site power generation, noted Rajat Rana, a lawyer at Quinn Emanuel Urquhart & Sullivan. In August, it was revealed that Amazon will build a data center campus with its own 7.65 GW gas power plant in Pecos County, Texas.
Meanwhile, Crusoe and Aalo announced an AI factory using small nuclear reactors.
At the same time, authorities at various levels—from municipal to national—are increasingly suspending, restricting, or outright banning the construction of such facilities. In mid-July, New York Governor Kathy Hochul signed an executive order imposing the first statewide moratorium in the United States on large-scale data center construction.
The main concerns of residents there relate to noise, the appearance of buildings, rising electricity rates, and increased water consumption. The issue has also extended beyond the U.S. Earlier, a water crisis due to AI scaling was predicted in the UK.
Earlier in August, Bridgewater Associates founder Ray Dalio compared the enthusiasm around artificial intelligence to the crises of 1929 and 2000.
