The Little Red Hen goes digital: No data centers, no internet

The politics of data centers increasingly resemble the fable of The Little Red Hen. Everyone wants the bread — AI, cloud computing, streaming, financial markets that clear in milliseconds — but fewer want the wheat fields, the mill, or the oven, let alone helping with baking. Worse, some don’t want others to bake at all.

Across the country, opposition to data centers is rampant. It is organized, growing, and bipartisan. Projects are being delayed or canceled as communities object to land use, water consumption, and electricity demand they fear will raise their rates, while also creating eyesores or traffic. Some states are even pursuing moratoria.

Resistance is understandable if costs are being imposed, but it is also selective, and at times even hypocritical.

This is because many of the same constituencies opposing data centers are deeply reliant on what those facilities produce. The modern economy is not optional. Streaming, remote work, financial systems, AI tools — all the “bread” protesters consume — depend entirely on the physical infrastructure of server farms and the electricity that powers them. No data centers, no cloud. No cloud, no modern economy.

Increasingly, we see political pressure to block local development while still demanding its benefits.

If communities and policymakers say “not here” to infrastructure, they are effectively expecting someone else, somewhere else, to absorb the costs. That’s where the Little Red Hen analogy becomes relevant as we take the next steps in an increasingly digital economy. In fairness, providers — and the communities that welcome them — should be free to say “not for you” when it comes to certain benefits.

If landowners, developers, and energy providers build voluntary, privately financed data center ecosystems — particularly in rural or “greenfield” developments — there is no moral obligation to socialize certain benefits outward to those who rejected the projects.

A serious commitment to property rights and bottom-up infrastructure means taking “no” at face value. That is how this sector should evolve. The emerging model is already visible: firms are exploring on-site generation to meet their own power needs, avoiding strained public grids and political interference. The proper step is to ensure they are never compelled to share that self-generated electricity, subsidize services, or involuntarily extend other associated benefits as a public utility would. (It’s only May 4 — mark this: some will try to dictate terms even for providers they chased away.)

Call it a functional splintering: a market-driven differentiation of infrastructure access that, had it prevailed a century ago instead of public utility and common-carrier models, might have yielded untold trillions in additional cross-sector infrastructure and network value.

Going forward, we can afford to ignore the neo-Luddites and let them internalize their back-to-the-past preferences. Americans need vast amounts of infrastructure — from water systems to EV charging to drone logistics. Those who want these benefits should be free to build and join communities where they are “baked in.” Importantly, those who host and enable capacity — counties, landowners, and newly built communities that may become tomorrow’s cities — should capture the upside: jobs, tax base, reliable power, priority access to digital services, and even equity stakes in the networks they help attract.

NIMBYism combined with common carriage produces stagnation, not wealth. Those who block data centers are entitled to their choice: fewer local impacts, but also tighter supply, higher prices, and potentially reduced reliability over time. That is not punishment; it is alignment. It allows expansion for YIMBY jurisdictions, while NIMBY communities remain as they prefer.

The alternative path we are on is incoherent: prohibit the infrastructure yet expect universal, subsidized access to the digital and AI cornucopia.

A durable policy framework doesn’t impose exclusion; opponents effectively choose it themselves. But it does allow differentiation. It permits privately built, privately powered systems that serve those who opt in today and tomorrow.

This approach reflects a simple principle of fairness: say no, and you may receive less of the gains that others help create. No one is proposing deprivation: If you decline to help make the bread, no one will let you starve, but you’re not going to get the first slice, nor are you going to get a subsidized low-cost slice.

The AI revolution and the infrastructure that underpins it will move forward at levels not yet fully appreciated. Communities have every right to opt out. But those that opt in should reap the rewards first — and most.

For more:

“AI and the electricity blackout America needs,” Competitive Enterprise Institute

“Trump’s AI plan clears the field — then occupies it,” Competitive Enterprise Institute