Craig Thompson is co-founder of Austin, Texas-based specialty executive recruitment firm Allegiance Search, which focuses on digital infrastructure, energy and advanced manufacturing teams. Opinions are the author’s own.
Power has been the defining barrier to the data center industry growth for years. But in August, Texas Gov. Greg Abbott gave the industry a very public reminder that access to power is not the only thing developers need to worry about.
Abbott temporarily halted approvals for new data center projects within Texas’ grid interconnection process and ordered an audit of pending developments amid concerns over grid reliability and the extraordinary volume of proposed new electricity demand. It was reported that around 90% of the 474 GW of proposed new load requests in the state were linked to data centers.
For anyone working in digital infrastructure, let alone Texas developments, this is a bit of a jaw-dropper.
Texas is one of the most pro-development states in the country and expected to become one of the most important data center markets in the world. Yet the state is now effectively saying that expansion has to happen on terms that protect the existing grid and the communities already relying on it.
I think that points to the next major development challenge for this industry. On top of powered land and capital, developers need public support.
The residents pushing back have a point
It’s easy for us to characterize community opposition as people failing to understand the economic opportunity data centers create. I think that would be a mistake.
Let’s look at the development through the eyes of someone living in one of the smaller communities where these projects are often being built. They are not thinking about artificial intelligence compute demand or the long-term value of hyperscale infrastructure. They are thinking about what has changed outside their front door: construction traffic, noise pollution, open land suddenly becoming a construction site and, of course, energy costs.
If residents believe a huge new user of electricity is contributing to higher costs or putting additional strain on the infrastructure they already depend on, telling them the project will ultimately be good for the local economy is not going to win them over.
Abbott’s intervention is important precisely because those concerns have moved beyond local protest and into state-level infrastructure policy. Texas is now scrutinizing whether proposed data center demand is realistic and whether the grid can support it without placing an unreasonable burden on existing customers.
That is a significant change in the conversation.
The benefits are real, but they arrive later
There is obviously the other side to this — and for the record, the side I believe really matters. Data centers bring substantial economic benefits to the communities where they are developed.
The construction phase creates thousands of jobs. Once operational, the projects provide permanent employment and can generate significant local tax revenue. Over time, that money contributes to roads, public services and wider infrastructure improvements.
The problem is that the costs and benefits arrive on completely different timelines.
The disruption begins as soon as construction starts. The larger economic benefits might take years to materialize. That gap is where developers risk losing people.
If your commute gets worse this month, your electricity costs increase and the landscape around your town changes dramatically, it is understandable that the promise of better infrastructure five or 10 years from now does not immediately feel like much of a win.
Community relations as a development function
This hurdle has given rise to community relations as a genuine leadership function.
At scale, more developers are hiring senior people specifically to manage the relationship between projects and the communities around them.
The title varies. In some businesses it sits under community relations, while elsewhere it falls closer to external affairs. The purpose is the same. These people are the link between the developer and the community.
Their job is to explain what is being built, why it is being built and what the long-term benefits could be. Just as importantly, they need to understand local concerns early and make sure those concerns reach the people making decisions inside the business.
That is why I think the role is moving well beyond traditional public relations.
When projects create visible disruption before the benefits arrive, somebody has to own that communication. Developers need people who can engage credibly with local leaders and residents while also giving the internal team a much clearer understanding of how the project is being received — before the cardboard signs come out.
As data center projects become more politically and publicly visible, community relations is moving closer to the core of how those projects are developed, and I expect that to continue.
Over the next few years, I think we will see community relations professionals become a much bigger board-level priority, particularly for those building at scale across multiple markets. The companies that recognize that early will be better prepared for the next phase of data center growth.
