A moratorium on data center construction could lead to a recession — BlackRock CEO

BlackRock CEO Larry Fink warned on CNBC that a halt to data center construction in the U.S. could lead to a recession in the U.S. economy.

The issue of data centers has become a hot topic in the run-up to the U.S. midterm elections: local communities in several states are opposing their construction due to rising utility costs and water consumption. Americans are also concerned about the environmental damage caused by data centers and the lack of transparency surrounding investments in such projects, the TV channel reports.

"If any kind of moratorium is imposed in this country, we'll end up in a recession," Fink said. "A significant portion of our economy currently depends on these capital investments."

The head of BlackRock acknowledged concerns regarding the large-scale construction of data centers but noted that “most of them are based on misinformation.” Huge sums are at stake: According to analysts’ estimates, total capital expenditures on AI could exceed $1 trillion in 2027 and total more than $5 trillion by 2030, CNBC reported.

“The problem isn’t data centers. They’re creating more new jobs than ever before,” Fink said. According to him, the scale of investment is driving demand for construction workers, digital infrastructure, AI computing equipment, and energy infrastructure.

Concerns surrounding the construction of data centers have already prompted technology companies to reevaluate major projects. In May, Oracle scrapped plans to build a natural gas power plant for OpenAI’s data center in New Mexico following protests by local residents and environmental activists. Instead, the company decided to use Bloom Energy fuel cells, which can generate electricity directly on-site.

In 2024, Amazon suspended a project to build three data centers in Prince William County, Virginia, following complaints from local residents about noise and the complex’s proximity to residential homes. In July 2026, in the same county, QTS, a data center operator owned by Blackstone, abandoned the Prince William Digital Gateway—an approximately 850-hectare campus where dozens of gigawatt-scale data center buildings were planned. For several years, the project had sparked protests from local residents over the strain on the power grid, land and water use, environmental impacts, and its proximity to the historic Manassas battlefield. Following lawsuits filed by opponents of the project, a court revoked the rezoning permit, and an appeals court upheld that decision.

Microsoft President Brad Smith noted in March that building a data center in the U.S. now requires “earning and maintaining the trust of the local community,” Reuters reported.

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This article was AI-translated and verified by a human editor