The fight over who pays for artificial intelligence has moved out of the data centre and into the town hall. Across the United States, residents are blocking the power-hungry buildings that train and run AI, worried about their electricity bills and their water supply. Malaysia has spent two years courting exactly those buildings, which makes the American backlash worth watching closely from here.
Editor
Dinesh Raj chevron_right
Table of Contents
America is pushing back, hard
Opposition to AI data centres in the US has gone from scattered complaints to an organised movement. A Gallup survey this year found roughly 71 percent of Americans do not want a data centre built near them, and the anger now centres on cost and water rather than noise alone, Prism News reports. Coordinated protests reached around 125 locations across at least 40 states during a single day of action in July. The resistance is more than noise: by one running tally, more than US$64 billion of projects have been delayed or cancelled after local objections, according to the tracker Data Center Watch.
Lawmakers are turning that anger into legislation. On 6 August, US Congressman Ro Khanna introduced a Data Center Bill of Rights that would give local governments clearer power to block projects and shield those decisions from being overruled by their state, as Tech Times reported. The core grievance is money. Modelling widely cited in the American debate suggests data centre demand could push wholesale electricity prices up sharply in some regions within a few years, and households do not want that arriving on their bills.
Why this matters in Malaysia
Malaysia sits on the other side of this trade. The country overtook Singapore to become Southeast Asia's fastest-growing data centre hub by offering cheap land, cheap power and a location next to a city-state that capped its own growth years ago. That success now carries a physical cost. By early 2026 the sector was already drawing more than half the electricity Malaysia had approved for it and about 28.68 million litres of water a day, according to a review of the boom's strain on power and water. Tenaga Nasional expects data centre demand alone could pass 5,000 megawatts by 2035.
The real difference is in how the pushback arrives. In the US it is bottom-up: angry neighbours, local votes, a congressman with a bill. In Malaysia it is top-down. Johor, where most of the capacity is heading, now charges data centres a dedicated tariff and has turned away close to a third of applications that could not show credible power and water plans, a Reuters analysis found, even as its pipeline points toward a jump to roughly 7,000 megawatts. The federal government has paused new non-AI data centre approvals and lifted the regulated electricity tariff for the current period.
The bill still has to land somewhere
That top-down approach buys Malaysia something the US is losing: the ability to keep courting hyperscalers without a public revolt in every affected town. It does not make the underlying question disappear. If data centres keep taking a growing share of the grid and the reservoirs, households and small businesses are competing for the same power and water, and the way tariffs are structured decides who absorbs the increase. That is the same worry driving Americans into town halls, just settled in a different room.
It is why the financing matters as much as the megawatts. We have looked at how Malaysia is trying to pay for this build-out without writing a blank cheque on its grid, and at how the same boom is already nudging up the price of a graphics card for creators and gamers here. The American story is a preview of the political bill that arrives once the physical one grows too large to hide.
Malaysia bet it could win the data centre race and manage the strain by rule rather than by protest. 2026 is the year that bet gets tested, and the crowds gathering in American town halls are a reminder of what happens when a country leaves the question too late.
Images courtesy of Tyler and Fre Sonneveld on Unsplash.
