Bay Area Cities Push Data Centre Moratoriums as AI Boom Meets Midterm Backlash

Last month, outside Oakland City Hall, protesters in cardboard robot costumes chanted and danced to a drumbeat. They were there to oppose new data centres, the facilities that process vast amounts of digital information. Their main worry was the strain those facilities could put on the energy grid, and what that would mean for household electricity bills.

Carlos Gutierrez, an activist with the environmental justice group Communities for a Better Environment, put it in blunt terms. Power prices in Oakland have climbed so high, he said, that some people are considering shutting off their electricity, while the city is planning to supply power to a data centre.

The protests worked. Oakland passed a data centre moratorium on October 6, after days of demonstrations. It is one of at least seven Bay Area cities, including San Francisco and Richmond, that have passed temporary construction moratoriums in the two months before Tuesday's midterm elections. San Francisco, Brisbane and Oakland each paused construction for 45 days, with the option to extend later.

The pushback is striking because of where it is happening. Anthropic, OpenAI and Meta are all based in the Bay Area, and the AI industry's growth has been credited with a local economic renaissance. Data centres house the chips and servers behind services like Anthropic's Claude and OpenAI's ChatGPT. They need round-the-clock power and large amounts of water for cooling, and even with cooling they give off heat enough to raise land surface temperatures by as much as 9 degrees Celsius (16 Fahrenheit). Nationally, the Pew Research Center counts more than 3,000 data centres in operation and over 1,500 more in development.

The issue has also entered the campaign for the seat Nancy Pelosi is leaving after 39 years in the House. Two Democrats are competing for it: San Francisco Supervisor Connie Chan and state Senator Scott Wiener. Wiener opposes any ban, telling Mission Local that a blanket moratorium could undermine AI regulation. Chan wants a nationwide moratorium until responsible AI regulation is in place. She said at an October debate that a pause would give lawmakers the moment they need to regulate, and she helped pass San Francisco's moratorium in early October. A University of Southern California poll in mid-October had Wiener ahead, 47 percent to 41.

Shum Preston, a San Francisco political analyst, said opposition to data centres unifies the public like few other issues. An October CNBC poll found 63 percent of registered US voters oppose data centres within 16 kilometres (10 miles) of their homes. Preston noted there has been little opposition to the moratoriums at local hearings, and offered his own reading of why: developers likely do not want to embarrass supervisors who are friendly to them before an election. He also pointed to the short duration of the pauses. Opponents, he said, will be more vocal when the 45 days end and election season has cooled, and that is when hearings will get more contentious.

The moratoriums face other obstacles. San Francisco Supervisor Shamann Walton, who sponsored the city's ordinance, says its planning code is outdated. Written in 2001, it classes data centres as "internet service exchanges," which has made it hard to count how many exist or to monitor their power and water use. In a September 14 statement he said 2001 rules cannot regulate 2026 technology.

Roger Lin, a senior attorney at the Center for Biological Diversity, argues 45 days is hardly enough to document impacts and frame regulations. He added that nondisclosure agreements often keep even local air quality boards from knowing what data centres do to air quality.

Industry supporters point to the facilities as proof of a thriving sector with benefits for communities. Anthropic, for example, is preparing an IPO expected to raise billions of dollars. Critics counter that such wealth may not spread across the Bay Area, and that the gains will go mostly to the already rich in a city with some of the nation's highest and fastest-rising rents. At a San Francisco City Hall hearing, one resident told supervisors the city is becoming less for humans and more for robots and billionaires.

What to watch next: whether cities extend their moratoriums when the 45 days run out, and how the Pelosi seat race, with its two opposing positions, shapes AI regulation locally.