The Buildout of Data Centers Poses New Reputation and Operational Risks Across Industries

An analysis by KRG Advisors maps the participants, issues and communications imperatives in the data center ecosystem in the U.S.

NEW YORK, July 9, 2026 /PRNewswire/ -- The rise of artificial intelligence, cloud services and AI throughout the economy is driving data center demand at a breakneck pace that businesses, utilities, regulators, and communities in the U.S. are struggling to match.

Because they require inordinate amounts of electricity, water, capital, and regulatory coordination simultaneously, data centers have emerged as a contentious, high-profile issue encompassing an array of industries. Organizations that have traditionally operated with limited public scrutiny may now be reputationally and operationally vulnerable, including electric utilities, economic development agencies, construction and engineering firms, real estate developers and infrastructure investors, water utilities and resource managers, and universities.

KRG Advisors, which provides communications and go-to-market strategies to enhance and protect reputations and drive operational performance, has published a comprehensive analysis of the data center ecosystem in the U.S. Entitled The Buildout of the Century: Risks, Issues and Communications Imperatives In the Data Center Ecosystem, it maps the key participants and issues for each phase of the full project lifecycle, while outlining the communications imperatives required for businesses, trade associations and economic development organizations to operate successfully in it.

"Not since the electrification of the United States, which transformed the way Americans live and work, has the nation experienced an infrastructure expansion like this," said Chris Deri, founder and managing partner of KRG Advisors. "However, the increasing business demand for capacity is colliding with mounting public opposition to data centers themselves, along with deep skepticism and anxiety about the broader socio-economic impact of AI adoption."

"The growing data center backlash has created new business and reputation risks for many companies and industries that have historically flown beneath the radar," he added. "Data Center Watch, a research firm, recently reported that 75 data center projects worth $130 billion were blocked or delayed by local opposition in the first quarter of 2026 alone. Data centers also transcend our current polarized politics. According to a recent Gallup poll, 56% of Democrats and 39% of Republicans are strongly opposed to a data center near their community."

Deri added, "KRG's report provides a comprehensive, objective analysis of issues and risks for every participant in the data center ecosystem at each stage of the buildout."

The Data Center Ecosystem

As detailed in the analysis, the data center ecosystem consists of three phases spanning the full project lifecycle of their development and operations in the U.S.

Phase 1: Planning and Siting
The earliest stage focuses on site selection, rezoning, power procurement, land assembly, and incentives. The most influential stakeholders include hyper-scalers, developers, utilities, investors, local governments, and advocacy groups. Key conflicts center on:

• Rezoning and land-use disputes
• Power procurement and grid capacity
• Tax incentives and economic-development deals
• Community opposition related to transparency, property values, and environmental impacts
• Utility concerns over who bears the cost of new grid infrastructure

Phase 2: Build-out
Once approved, projects move into construction and interconnection. Major concerns shift toward:

• Transmission and interconnection delays
• Skilled labor shortages
• Supply-chain constraints and equipment availability
• Construction financing and cost overruns
• Traffic, noise, and other local disruptions

Phase 3: Operation
When facilities become operational, attention turns to long-term impacts and expansion. Critical issues include:

• Electricity rates and ratepayer impacts
• Water consumption and disclosure requirements
• Reliability and outage management
• Expansion approvals and continued local opposition
• AI demand growth and long-term investment returns

Communications Imperatives
The steps required for businesses, trade associations and economic development agencies to navigate the data center ecosystem without imperiling their business and reputation objectives are informed by an array of considerations. Among these are the trust and credibility an organization has with key stakeholders and the visibility of a given project, as well as its proximity to controversial decisions and the sociopolitical dynamics of a community.

In addition, there are several communications imperatives that are broadly applicable to those operating in the ecosystem.

• Assess the risk: Evaluate stakeholder expectations, public visibility, and issues such as land use, electricity, water, and tax incentives to identify potential reputational and operational risks.
• Build and activate a coalition: Align businesses, community organizations, industry groups, and other credible stakeholders to strengthen support, shape public perception, and reduce opposition.
• Establish guiding principles: Develop, publish, and report against shared commitments for responsible data center development to demonstrate accountability and build trust.
• Create a communications toolkit: Equip coalition members with consistent messaging, engagement resources, and rapid-response tools to address concerns and support the project throughout its lifecycle.

"AI companies and cloud providers need capacity immediately to remain competitive, while power plants, transmission lines, and permitting processes can take years to complete," said David Bloomgren, a senior client advisor at KRG Advisors. "At the same time, major technology companies have modified, delayed, or deprioritized certain sustainability and climate commitments for the sake of increased capacity."

Bob Knott, a senior client advisor at KRG Advisors, added: "State and local governments face a difficult balancing act as the development of data centers accelerates.  Lawmakers rely increasingly on data centers for tax revenue and economic growth, while their constituents, many of whom don't recognize their own dependence on data centers, are increasingly active in opposing their development."

About KRG Advisors
KRG Advisors provides communications and go-to-market strategies to businesses and organizations to enhance and protect their reputation and drive operational performance.

Our advisors are experts in corporate branding, crisis and issues management, public affairs, financial communications, market research, and management consulting. They have held leadership positions at Burson, Edelman, FTI Consulting, Teneo, and other global consultancies, as well as senior roles in government foreign service, military intelligence, NGOs, and television and film production.

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SOURCE KRG Advisors