Global Challenges Arising from the AI Data Centre Boom

London, United Kingdom Aug 26, 2026 ALN: SCOTLAND isn’t the only country in the world grappling with an AI data centre boom.

Across the globe, communities and authorities are dealing with an increase in planning applications and the environmental impact of the sites.

As part of our mini-series looking at AI hyperscale data centres, let's take a look at what is happening outside of Scotland.

Memphis and Elon Musk’s Colossus

Trillionaire Elon Musk made Greater Memphis in Tennessee the centre of his AI ambitions in 2024, building data centres and energy infrastructure at a blistering pace.

It has left residents in the local area grappling with the unwanted impact of noise pollution and emissions from gas-burning turbines. The data centres were initially built to train and run XAI’s Grok models and chatbot, which prompted outrage after it was used to create fake sexual images.

There has been public opposition to the SpaceXAI sites Colossus and Colossus II, leading communities across the US to use the project as a blueprint for their opposition to other AI developments.

In July, New York Governor Kathy Hochul implemented a one-year moratorium on the construction of AI data centres in the state, while New Jersey Governor Mikie Sherrill introduced legislation to ensure data centre operators pay a fair share of electricity costs—rather than shifting the burden onto local residents and businesses.

One local resident, Jason Haley, whose house is within a mile of the site, told CNBC that the noise from Colossus II and its gas-burning turbines is “like a form of torture.”

Residents in the local area also reported that their water and electricity bills have increased since the data centre was established, although Memphis Light Gas & Water insisted rates have “not been impacted.”

File photograph of Twitter/X owner Elon Musk (Image: Kirsty Wigglesworth/PA Wire)

Microsoft, Meta, Google, OpenAI, and other developers of hyperscale data centres are also planning developments across the US. However, according to a Gallup poll from May, seven in 10 Americans oppose the construction of AI data centres in their local area, with nearly half (48%) stating they are strongly opposed.

Virginia’s “Data Centre Alley”

Loudoun County, in northern Virginia, due to its tax breaks—on average 25% lower than in neighbouring counties—has become the most densely populated area in the world for AI data centres. It currently hosts 12% of the world’s capacity for the sites that power AI, a world record. There are 200 of them, with more in the pipeline that have been approved or are in the process of being approved.

While it has become the epicentre for hyperscale data centres, an equivalent pushback has also occurred from those concerned about the environmental impact. A survey conducted by George Mason University in Fairfax, Virginia, found that 40% of Loudoun County residents believe the data centres are worsening their quality of life, compared to 19% who feel they are improving it, and 40% who think there is no difference.

Julie Bolthouse, director of land use at the Piedmont Environmental Council, which covers a large area of where most of the infrastructure is concentrated, told Le Monde that if all the ongoing projects in the pipeline were built, it would require quadrupling the current capacity of the electricity grid.

Europe

Across Europe, a push for a rapid expansion of AI data centres is facing a similar public backlash, particularly over energy and water consumption.

Local opposition groups have sprung up across the continent to protest the impacts of this expansion. In Aragon, Spain, one of the driest areas in the country, Amazon is investing billions of pounds into data centres in the area. Aurora Gómez, of the Spanish campaign group Tu Nube Seca Mi Río (Your cloud is drying my river), told Politico that there had been 24 hyperscale data centres approved in the space of three years.

She added that “the regional government had to put some grants for the farmers because there is such a drought that the crops are dying.”

In Italy, the Lombardy region—the country’s main digital hub—approved a framework in June this year to regulate and manage demand for data centres. Officials sought to make it cheaper for developers to use brownfield sites rather than building on parks or farmland.

AI data centres are also an issue in Europe (Image: Yui Mok/PA Wire)

According to a Politecnico study, in the 2026-2028 period, 30 companies—including 19 new operators—have announced 83 new infrastructure projects in Italy with a potential value of 25.4 billion euros.

Denmark, which was seen as an “attractive jurisdiction” for data centre projects, had to implement an emergency plan earlier this year due to capacity problems with the electricity grid. The Danish Government and Parliament agreed to the plan, which would prioritize which data centres could access the grid, distinguishing between those linked to “societally critical functions” and those which are not.

France has also seen opposition from local communities regarding data centres. A data centre UK company, Segro, wants to build in Le Bourget, in the department of Seine-Saint-Denis, just north of Paris. The citizen collective Le Nuage était sous nos pieds (The Cloud Was Beneath Our Feet) reported that there were about 15 projects that have sparked tensions across the country. An administrative court in Grenoble suspended a building permit for a 40-megawatt data centre development by Sesterce due to the lack of an environmental impact study.

Malaysia

Acute water constraints have impacted rapid data centre expansion, concentrated in Johor, Selangor, and Negeri Sembilan. The three areas together host 101 data centres, with the lion’s share—72—set up in Johor, which borders Singapore. Malaysia’s water reserves are already facing increasing pressure from climate change, industrial growth, and rapid urbanization, with rising demand from the data centre industry causing concerns about potential water shortages.

Charles Santiago, chairman of the Malaysian Water Services Commission, stated at a press conference that “alternative water sources must be considered to prevent a crisis.” The Malaysian Government has said it is working on stricter sustainability policies for the data centre industry.