J.P. Morgan: The bottleneck to U.S. data center expansion is extending from power to community permitting

How much investment is really lost when projects worth $68 billion are blocked?

Data Center Watch counted 45 data center projects blocked or delayed in 27 U.S. states in the second quarter of 2026, involving about $68 billion in potential investment; about 32 of them were classified as “blocked.”
This is not an amount of investment permanently canceled: about 40% of the projects had no publicly disclosed investment estimate, some may still have been in the planning stage, and “blocked” also includes project withdrawals or temporary pauses. The figure is therefore better understood as reflecting the scale of local opposition than as actual losses.
JPMorgan believes the more important development is that opposition is shifting from protests to policy: a single moratorium or change in permitting rules could affect hundreds of projects in the development pipeline.

In the second quarter of 2026, local-level debate shifted markedly toward proposed legislation, moratoriums and stricter reviews. Measures include community impact reports and additional environmental or grid requirements. Even without directly prohibiting construction, added conditions could extend timelines, raise costs, or even undermine a project’s economic viability.
The impact of such measures could extend beyond an individual canceled project; a tighter permitting environment would also make it more complex to obtain permits and supporting infrastructure. Opposition crosses party lines, and local elections and candidates’ political incentives could also influence the policy direction.

More than 70% of the opposition groups tracked by Data Center Watch raised environmental concerns, including water and land use; about 50%–60% of cases involved utility costs. The underlying dispute is not just about environmental protection, but about who communities believe bears the external costs and who benefits from the projects.
Technical improvements may therefore not be enough to quell opposition. Developers are beginning to incorporate community engagement into project development, responding to local concerns through investment in schools and infrastructure, vocational training and tax benefits, rather than waiting until the permitting stage to engage with communities.

Grid-connection constraints are prompting developers to consider behind-the-meter generation, but the power-supply system itself can also affect local acceptance: natural-gas generation may raise emissions and local concerns; cleaner options could help win support if they reduce community energy costs or environmental impacts, although evidence on this remains preliminary.
Local responses to nuclear power are also mixed: plans to restart Three Mile Island have revived some opposition to nuclear power, while AI-related electricity demand has led some environmental discussions to shift toward accepting nuclear power as an alternative to higher-emission options. Power availability addresses only part of the constraint; the type and cost of the power-supply system, as well as its local impacts, also matter.

JPMorgan says the direct impact of local opposition still accounts for only a portion of overall data center investment. Its current view is not that construction in the U.S. will grind to a halt, but that projects may face gradual friction: longer timelines, higher community and compliance costs, and greater difficulty coordinating permits and supporting facilities.
Alongside power supply, grid connections and land, social license could influence where new capacity can be built more quickly and economically. Data Center Watch has observed continued rapid development in Southeast Asia, Western Europe, the Middle East and sub-Saharan Africa; some developers have already begun drawing on U.S. experience and adjusting how they engage with communities.