Last month, Pamela Griffin and two other residents of Taylor, Texas, took to the podium at a city council meeting to oppose a proposed data center. But later, they sat around as council members discussed a proposed tech factory. Griffin did not speak out against this development. Nobody did it.
A similar contrast is repeated in communities across the United States. Data centers encounter unprecedented public resistancewith environmental costs a major concern. More were needed to fuel a growing appetite for AI, and they became obvious hotspots for communities worried about what automation could mean for them. However, many factories built to supply servers, electrical equipment and other parts to data centers face virtually no opposition.
Factories tend to create more jobs and drain less natural resources than data centers, so with the exception of a few controversial points. chip manufacturing plants in several states, they had to go through local hearings to obtain permits and tax breaks. But experts who track supply chains say the increased scrutiny of manufacturing projects highlights a potential new strategy for activists fighting data centers and a source of risk for communities that might invest in a short-lived boom.
“At some point, people are going to figure out what the critical plant is that can bring all the data centers to their knees, and they’re going to go after that,” says Andy Tsay, a professor at Santa Clara University who studies global trade and reshoring.
While targeting the supply chain may be a new way to slow data center construction, Griffin says organizers are too spread thin to take on more. So for now, the door is wide open for manufacturers to increase their presence in the United States and fuel the data center market without crushing the resistance.
“We have to start at the bottom and recruit the people who make these servers, but first we have to get people to understand what these data centers are,” Griffin says. “We have to choose our battles.”
At last month’s council meeting, she focused on her opposition to a proposal for a second data center in Taylor, after another data center was built near her home that she chases to stop. That evening, Griffin and his fellow activists knew the council would also consider a proposed factory for Taiwanese manufacturer Compal. But the site’s potential role in supporting the data center industry wasn’t obvious to them.
Griffin’s case shows what communities protesting data centers face if they also plan to challenge manufacturing projects: opacity, public perception and the prospect of additional legal battles.
Server farms
City records describe Compal’s intentions as creating “servers,” in addition to everything from smart home devices to automotive electronics.
The list goes on, but Compal spokesperson Tina Chang told WIRED that the Taylor factory would be for the company’s server operations. The building is leased by Compal USA Technology, a subsidiary which was created last year with the aim of expanding Compal’s server product operations in the United States. Another site near Georgetown, Texas, announced at the same time as the Taylor facility, will “establish a server services center serving enterprise and cloud infrastructure needs.” depending on the company.
Taylor, who is near Austin, spent more than a year courting Compal, who considered alternatives globally before choosing the city. A 366,000 square foot pre-built facility attracted the company, which announced it was signing a lease of nearly $66 million with investment plans totaling $200 million. “They fell in love with the openness,” Ben White, president of the Taylor Economic Development Corporation, told the city council at the December meeting. “It gave them the flexibility to do what needed to be done.”
White added that the 900 jobs Compal hopes to create would make it second after all Samsung as the city’s largest employer. Council members asked some basic questions about jobs and competing cities before unanimously approving nearly $4.4 million in tax breaks for the project. “Another home run,” Mayor Dwayne Ariola said of the project.
Griffin, a retired teacher and learning center director who grew up in Taylor, says she and her fellow residents deserved more transparency at the meeting about Compal’s work with data centers. Even so, mounting a campaign to stop a factory would have been difficult because it could have portrayed her and her fellow critics as anti-development.
“I don’t want to sound like I’m trying to stop everything from happening to Taylor,” Griffin says. “I’m just trying to stop data centers from coming into the city limits. If we stop people who are trying to create jobs there, then people will turn on us and say we’re trying to kill jobs.”
Masheika Allgood, founder of AllAI Consulting, which advises community groups opposed to data centers, notes that another challenge is whether the data center industry has enough funding to lobby politicians and run public relations campaigns to fight its opponents. Factory developers are likely in a similar situation and critics don’t have the resources to fight on multiple fronts. “These are tough, exhausting fights,” Allgood says. “So while it would be ideal to fight on all fronts, it’s too much to ask of people.”
New or expanded factories have been presented as necessary to meet growing demand and mitigate the impacts of tariffs on imports to the United States. It makes sense that server factories want to locate close to their customers, and in the United States, Texas is second only to Virginia in terms of data centers.
Cities find it valuable to have both data centers and factories because they balance each other out in some way. Data centers don’t create many jobs, but they generate significant property tax revenue. Factories increase employment but also demand for public services such as roads, schools and social programs, which adds additional costs. “Both types of projects can be very beneficial to our community as we seek to attract more good-paying jobs close to where our residents live and … reduce our reliance on residential property taxes,” said Jerrod Kingery, a spokesman for Taylor.
Other cities are making similar decisions. Last month, the Georgetown City Council unanimously approved about $1.8 million each in public assistance for Compal and another Taiwanese manufacturer, Pegatron, to set up shop in the city. Compal plans to maintain servers in nearly 213,000 square feet of space. Pegatron plans to create about 100 jobs in a 169,000-square-foot facility, the first in the United States.
Similar to Taylor’s Compal plant, there is little public information on what Pegatron will specifically produce. Industry insiders have speculated about United Daily News from Taiwan that the factory will mainly produce servers. In an unsigned email, Pegatron declined to comment on specific plans, but said its project “went as planned.”
No members of the public spoke about either project in Georgetown at last month’s council meeting. Previously, when the city posted on Facebook To celebrate Pegatron’s plans, a few commenters raised questions about how local water, electricity and traffic could be affected, with some confusing the plant with a data center. But after the city issued a clarification stating that “facilities like these use minimal water” and “pay for their own electricity,” only a few additional comments poured in.
Cameron Goodman, Georgetown’s economic development director, says the city deliberately sited the factories “in locations with appropriate roads, water, wastewater and electrical infrastructure” and recruited businesses “well suited” to those spaces.
Factories where computer chips are produced use large amounts of waterand activists protested plans for new manufacturing plants in Arizona, Indiana, and New York. But concerted opposition to other links in the data center supply chain, such as factories in Texas, California and Colorado that make electrical equipment, has been limited.
Cities that host these providers could face economic challenges if the massive buildup of AI data centers is symptomatic of a soon-to-burst bubble, as some skeptics believeand demand for servers and other parts is slowing. Or if data center opponents like Griffin begin to see widespread success, that could also undermine the need for increased production.
But the immediate prospect of job creation and economic growth has kept long-term concerns at bay, and data center manufacturing continues to accelerate. Compal’s U.S. human resources manager, Rick Ortiz, told the Taylor City Council that the company hopes to “be a part of the community for many years to come.”
