Wall Street Adjusts Credit Risk Evaluations for Data Centers Amid Local Backlash

Wall Street Reevaluates Credit Risks for Data Centers Amid Local Opposition

Financial institutions on Wall Street are adjusting their credit-risk assessments for data center projects in response to increasing community opposition. A recent report highlights that banks and asset managers are now factoring local dissent into their financing decisions, as protests and permitting challenges can cause significant project delays or cancellations.

According to Data Center Watch, the first quarter of 2026 saw over 75 data center projects with a total value of approximately $130 billion facing local resistance. This trend is alarming for lenders, who are now not only considering traditional financial and environmental risks but also local concerns regarding electricity costs, water usage, noise pollution, and the size of the data centers.

Karen Fang, head of infrastructure finance at Bank of America, emphasized the importance of community support in obtaining necessary permits and approvals for projects. She stated, “Readiness encompasses all the necessary permits and approvals, along with community backing from residents in proximity to the project.”

As protests against data centers rise across the U.S., with nearly 40 arrests reported so far in 2026, local opposition is becoming a significant factor in project viability. In July alone, there were 142 demonstrations in 42 states addressing concerns about energy consumption, noise levels, and the environmental impact of large facilities. This backlash has also prompted at least 15 states to consider moratoriums on new data center constructions.

However, experts from Brookings warn that such moratoriums could harm the digital economy if not carefully considered. They advise legislators to focus on creating responsible guidelines rather than stifling technological progress. Goldman Sachs has projected that investment in AI infrastructure could exceed $5 trillion by 2030, indicating the critical balance needed between community concerns and technological advancement.