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The great AI data centre cover-up

July 8, 2026
in Finance
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The great AI data centre cover-up
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It is just over 40 years since a US political journalist wrote something about scandals that should have been mandatory reading in school classrooms from then on.

“The scandal isn’t what’s illegal, the scandal is what’s legal,” wrote Michael Kinsley. He was talking about the way rules are written to let powerful insiders, from Wall Street to Washington, get away with unfair but lawful behaviour. 

People say Kinsley’s adage is outdated in the age of President Donald Trump. They are wrong. Look no further than the gathering environmental misery AI barons are foisting on us as they race to build more data centres.

Data hubs already devour more electricity globally than all but 10 countries. About 448 terawatt hours last year if you’re interested. The AI boom means that amount is on track to roughly double within four years.

This would be less of a problem if all the new electricity were green. It won’t be because so many countries still get most of their power from fossil fuels. That includes the US and China, the two largest data centre markets by far.

So the faster these sites multiply, the more planet-heating carbon emissions for the rest of us. 

It gets worse. The battle to build data centres is so fierce that the tech giants are not hanging around and waiting for a backlogged grid connection like other companies. Instead, they are funding their own off-grid power plants.

And because they want features such as super-reliable “five nines”, or 99.999 per cent power availability with only a few minutes of downtime a year, they are often going for systems powered by gas and diesel, which emit air pollutants when burnt.

As of this year, analysts say data centre developers in the US have announced about 100GW of off-grid gas generation. It’s unlikely this will all be built, but Mark Zuckerberg’s Meta alone is planning to fund 10 gas power plants across Louisiana for its hubs.

And here’s where that Kinsley rule of legal scandals kicks in. 

Louisiana is one of a growing number of places trying to lure AI investment with business-friendly rules that in some states mean faster power plant approvals and less public scrutiny. 

As Reuters reported last month, an Ohio law has allowed some plants to be approved in just 45 days without public hearings. 

People are understandably angry. An unprecedented 75 US data centre projects worth around $130bn were blocked or delayed in the first three months of this year, nearly as many as in the whole of 2025, says the Data Center Watch research group. It reckons active opposition group numbers have grown from 396 at the end of 2025 to 833 by the end of March.

The AI giants’ demand for electricity is only part of the problem. Data centres are a concrete target if you’re worrying about job-killing robots. But they also swallow up land and water. By 2030, they could be using enough water to meet the basic needs of all 1.3bn sub-Saharan Africans for a year, UN researchers estimate. 

You can see why it is so important to know exactly what these companies are building and where. But transparency is for the little people. You and I might be fined for not telling the government what we earned last year. An AI company can quietly get the nod for a gas power plant across the road from your home without so much as a public hearing. It’s not needed for private off-grid customers, developers say.

All of this is why António Guterres, the UN secretary-general, last month called on all big AI companies to disclose their data centres’ carbon emissions, water and land use.

I wish him luck. Meta, Google and other big tech companies have long published data on company-wide electricity and water use, which has often soared since AI took off in 2022. But the figures are not always broken down for their data centres and it is hard to find any reporting on the effect of AI workloads.

Last week I asked seven companies if they would heed Guterres’s call.

My queries went unanswered by all except Microsoft and OpenAI, who sent me their latest published environmental material, but declined to discuss Guterres’s request. 

OpenAI’s policy on AI infrastructure is still instructive. “We support policies that require transparency around water, electricity, and government agreements,” it says, “with appropriate exceptions to maintain security, commercial sensitivities, trade secrets, and proprietary information.” 

The case, I think, is closed.

[email protected]

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