Wall Street Is Starting to Treat Data Center Backlash as a Credit Risk

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Wall Street banks financing the AI data center boom are paying closer attention to opposition from communities where projects are planned.


According to a report by Reuters on Monday, banks and asset managers are increasingly weighing local resistance when deciding whether to finance data centers, as protests and permitting disputes raise the risk of delays or cancellations.





While lenders already have to assess technical, environmental, zoning, insurance, and financial risks, now they are also weighing local concerns over electricity costs, water use, noise, and the size of data centers.


“Readiness means all the permitting and approvals that are required, and the community support from the people who are going to live around it,” Bank of America infrastructure finance chief Karen Fang told Reuters.


At least 75 data center projects worth roughly $130 billion faced local opposition during the first quarter of 2026, according to a report by Data Center Watch. Last month, Goldman Sachs estimated that more than $5 trillion would be spent on AI infrastructure by 2030.


The news comes amid growing organized opposition to data centers across the U.S. So far in 2026, there have been nearly 40 arrests linked to data center protests.


In July, demonstrators held 142 protests across 42 states over data center development, citing electricity and water use, noise, subsidies, and the effect of large facilities on surrounding communities.


That resistance has also reached state legislatures, with at least 15 states having considered moratoriums on data center construction, according to a July Brookings report.


But Brookings researchers argued that stopping construction is not a long-term solution.


“These bills would pose a threat to the digital economy if drafted too broadly and could create massive financial problems for a number of firms,” Brookings wrote. “Legislators should resist the impulse to stop technology and instead focus more on implementing responsible guardrails and restrictions that protect broadly shared principles.”


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