Key Highlights

  • Trump said on Wednesday that data center operators need to reach financial deals with the communities hosting them.
  • Several US states are weighing moratoriums on new data centers as the November 3 midterm elections approach.
  • A senior Nebius executive called the dividend idea worth considering and said it could take several forms.
  • Data center stocks have been under pressure this week on concerns over debt-funded AI buildouts.

A Political Fix for an Unpopular Buildout

President Donald Trump has a proposal for the growing backlash against data centers: pay the neighbors. In a Truth Social post on Wednesday, he told operators to "MAKE DEALS" with local communities, arguing that projects that were unpopular became popular once money changed hands. He suggested the payment could be a dividend to the community, to individuals in it, or to both.

Trump, who has long backed the industry, added that he has examined the issue closely and reached a firm view. He said large new facilities are required to generate their own electricity and to supply or sell any surplus to the local community or grid. That, in his telling, means power bills need not rise and could fall substantially.

Why the Issue Has Heated Up

Data centers have become a campaign issue before the November 3 midterm elections. Residents have raised objections over water use, power consumption, electricity prices and the land the sites occupy. Multiple states are considering moratoriums.

Access to electricity is the sector's biggest constraint. Power grids in the United States and Europe are swamped with requests from large users, data centers among them.

The Industry Responds

A chief revenue officer at AI infrastructure company Nebius, speaking on the sidelines of Nvidia's GTC Berlin conference, said the company is in principle already discussing how to invest in communities. The executive said benefits could flow back through tax revenue already being paid, and that a more direct economic benefit for residents is conceivable. Dividends, the executive added, already take other forms, such as spending on education and job creation, and the idea is not far-fetched.

Money Worries Weigh on the Sector

The political push comes as investors grow wary of how the buildout is financed. Data center stocks have been under pressure this week, with concerns over the sector's financial health. As projects grow more expensive, developers are leaning more on debt markets.

HSBC chief executive Georges Elhedery told an interviewer on Tuesday that investors need to be selective. He pointed to the quality of tenancy agreements and the pricing of contracts as things to examine, noting that not all deals are strong enough to back confidently and that some are tougher than others.

The worries have shown up in trading: Korean AI firm Elice fell more than 30% in its market debut on Tuesday, and AI-linked stocks such as CoreWeave and Seagate recovered only part of the early damage, rising more than 1% and 2% respectively. The broader market has felt the strain. Doubts about whether AI infrastructure demand justifies the spending have weighed on sentiment in recent sessions, and the Nasdaq Composite ended Tuesday marginally lower.