AI data centers are transforming rural land markets — and fueling a backlash

At a July protest against data centers in Lubbock, Texas, state Agriculture Commissioner Sid Miller took the microphone to share his concerns about data center land grabs in his home state. But what he said could apply to what's happening in dozens of states across the U.S.

"When [data centers] first started popping up, nobody really knew much about them," he said at the protest. "I found out real quick that they were taking up our very best farmland. ... And [developers] give sometimes 10 times the value, so it's hard for farmers to turn that down."

Nationwide, investments in computing power sparked by the new technology of artificial intelligence have set off a commercial land rush, sending property values soaring in unlikely and out-of-the-way places.

AI data centers house massive computer servers filled with powerful chips and systems that are needed to run AI models and workloads. The centers require vast amounts of electricity and water to power and cool the servers, and because of their large footprint, vast amounts of land.

Companies are racing into rural America to build not only data centers but facilities for the businesses constructing and servicing them. In locations across the country, entire secondary economies are popping up around technology construction sites, creating boom towns and transforming land uses.

In many cases, the transformation is pitting some of the largest corporations in the U.S., along with their backers on Wall Street, against local residents and communities, who are grappling with newfound competition for their space, infrastructure and natural resources.

Land purchases in the U.S. for future data centers reached about $6 billion in the first half of 2026 — a 79% increase from last year, according to commercial real estate firm Avison Young.

Data centers represent 27% of development sites in the U.S. this year. It's the second-highest category after apartment buildings, outranking industrial buildings, office buildings, retail spaces and mixed-use developments, according to the firm.

And that's just the data centers themselves. Commercial developments in directly related industries, such as water and power plants, and indirectly related sectors, such as housing construction for workers, likely put the total share of AI-driven land investment higher.

Comprehensive rural property price data correlated to data center and related industry construction is hard to come by. However, several reports and analyses indicate that in key data center areas commercial property values are skyrocketing.

That's especially true for properties with dependable access to regional power grids. Last year, site costs in Northern Virginia and the Northeast surpassed $8 million per acre, according to real estate firm CBRE.

Reports of developers offering prices for powered land that are far above their accustomed values are almost becoming common, despite their targeted, site-specific applicability.

In Loudoun County, Virginia, a data center developer reportedly offered $4.4 million per acre for land.

"Median land prices in Northern Virginia are nowhere close to those figures," a July brief from the National Association of Home Builders says, citing data showing the median price in Loudoun County in 2025 was $125,000 per acre.

"Home builders cannot bid in that market, because a builder's land budget is capped by what home buyers can afford," the NAHB says. "A data center operator faces no such constraint. The result is not more expensive homes on that parcel. It is no homes at all."

Residents in many communities are worried that the data centers will create a drain on water and energy infrastructure and that electricity prices for all customers would be raised to cover the costs of powering the data centers.

Pennsylvania farmer Bobbi Thompson said she's concerned about pressure on local water resources,
as cloud computing company CoreWeave builds a data center in Lancaster, less than 20 miles from her Mount Joy Township home.

"Where is all the water coming from?" Thompson said. "What does that mean for us as a community?"

Concerns about rising electricity costs are not unfounded. Existing and forecast data center load growth is "the primary reason" for "high prices" within electricity capacity markets, according to a May report from Monitoring Analytics, the group that monitors the PJM market, a wholesale electricity transmission region covering all or parts of 13 states in the mid-Atlantic and Midwest.

The report says that "data center load growth resulted in a combined total increase in capacity market revenues" of $23.1 billion from auctions through 2028.

Many residents are also concerned about the general loss of open land to private commercial use.

"It's a little depressing, as far as the outlook, to physically see the farmland go away," said Lindsey Dodge, a resident of Boise, Idaho.

The land rush is visible in its starkest relief in rural America, where wide-open farmland with grid access can be worth a lot more for its computational, rather than agricultural, potential.

Thompson and her sister, Michelle Kennedy, said they have received dozens of offers in the past year for their 45-acre family farm.

Their next-door neighbors have applied to rezone their own farmland into an industrial complex, accommodating more than 1 million square feet of manufacturing and warehousing space. The development would have room for about 1,000 total employees and hundreds of vehicles, which Thompson and Kennedy say would harm the operations of their farm.

"Can you imagine if you had a thousand vehicles parked 24/7?" Kennedy told CNBC. "Cows don't produce milk if they're not relaxed."

Kennedy and Thompson put a conservation easement — a form of restrictive legal contract maintained by an outside entity — on their land to prevent it from becoming an industrial lot in the future.

"It becomes our legal and fiduciary responsibility then to monitor, steward and enforce that conservation easement in the future," Jeff Swinehart, chief operating officer of the Lancaster Farmland Trust, the group working with Kennedy and Thompson, told CNBC.

Boise is one of the centers of the national computing boom. Meta is building a data center in the nearby town of Kuna, and Micron is putting up two semiconductor factories in the metro area, pouring billions of dollars into the region.

Mike Adler, founder and CEO of Adler Industrial, one of the largest commercial development companies in the Treasure Valley region of Idaho, said he's watched the city change before his eyes, with remote alfalfa farms turning into prime real estate.

Adler took the opportunity to grow his business and participate in the economic boom transforming the city.

"All of a sudden ... I realized that what felt like the middle of nowhere was really the center of the valley," he said. "I realized this is an area that people were building. People wanted to be here. And if you look at those projects today, they're built out — they're nice. It's an area that everyone's now using."

Many Idahoans involved in the boom are excited by the development, but they're also feeling the weight of the changes.

Harry Sawyer, a fifth-generation Idahoan and vice president at commercial real estate firm CBRE, said he's seen families make a lot of big decisions as property values have soared and presented opportunities.

"'Do we keep on farming? Do we sell and do something else?' We're seeing it everywhere, but especially here," he said.

In other parts of the country, the battle over data centers is decidedly more hostile.

In Saline Township, Michigan, local officials have resigned due to death threats they've received over a huge new data center known as The Barn, a multibillion-dollar construction project by development firm Related Digital that's being built for Oracle and OpenAI.

"We've got a lot of recorded messages wishing us dead," township clerk Kelly Marion told CNBC in May. "What they say is, 'We want you dead.' I'll get them for, like, the entire board. Other board members have gotten them themselves. You know, 'We wish you'd die of a slow death.'"

One resident launched a recall effort requiring members of the township board to be reelected, which included Marion, who voted in favor of the proposal.

Wall Street is paying attention to the growing intensity of pushback from states and local communities.

Investment bank Mizuho noted in a Sept. 1 analysis that as many as nine states have pending moratoriums on new data center development.

That's in addition to New York, where Gov. Kathy Hochul in July issued a moratorium on new hyperscale data centers for up to one year. Data center development "threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers," Hochul said.

Some investment banks say they consider the popular mobilization a risk to their investments and the capital expenditures made by the companies they represent, and some also think it could be a factor in the midterm elections in November.

"Most local pushback is manageable," Shahriar Pourreza at Wells Fargo wrote in a June 3 note, "but if this reaches state-wide scale in key [data center] markets, we think it could pose a material risk to future growth, stock values."

"We still see this as a state and local policy risk rather than a federal one for the time being: federal policy has remained accommodative toward data center construction," Ariana Salvatore at Morgan Stanley wrote on Sept. 1. "It's overly simplistic to say none of this spend could be affected by the political backlash."

In an Aug. 10 note highlighting market volatility around the midterm elections, analyst Ohsung Kwon at Wells Fargo said "data center politics is a key risk."