Key Takeaways

  • Blackstone is emphasizing union jobs, workforce training, water-free cooling and local investment as opposition to data centers grows.
  • The cancellation of a QTS project in Virginia shows that local approval does not eliminate litigation, political or community risks.
  • AI infrastructure investors increasingly need to treat electricity, water and public acceptance as core development constraints.

Blackstone is stepping up efforts to address the workforce, environmental and community effects of AI infrastructure, as local resistance becomes a material obstacle to data center development in the United States.

CEO Stephen Schwarzman said Blackstone is working with portfolio companies, including data center businesses, on union job creation, workforce training, water-free cooling systems, expanded power generation and significant local economic investment. The effort reflects a broader challenge for private capital: compute demand is rising rapidly, but the physical infrastructure supporting it has to be built somewhere.

That is becoming a difficult sell. According to Reuters, only 14% of respondents in a June Reuters/Ipsos poll said they would support a data center for technology companies being built in their community. The opposition crossed partisan lines, even as other technology and energy policies remain politically divisive.

A data center can look very different depending on which side of the property line someone occupies. For an investor or hyperscaler, it represents scarce compute capacity and long-term digital infrastructure. For nearby residents, it may mean transmission equipment, construction traffic, persistent noise, water demand and uncertainty about future electricity bills.

Blackstone has substantial exposure to that tension. It took data center operator QTS private for $10 billion in 2021. Earlier in July 2026, QTS terminated a planned project in Virginia following years of planning, local opposition and litigation, despite the project having received county approval.

That decision offers a cautionary signal for developers. Entitlements and permits may establish a legal path to construction, but they do not by themselves create durable public support. Community challenges can extend timelines, increase development costs or stop projects after considerable planning work has already taken place.

The investment case remains powerful. McKinsey estimated in 2023 that generative AI could add between $2.6 trillion and $4.4 trillion in annual global economic value. Gartner projected in 2024 that annual spending on AI-centric data center infrastructure and related cloud services could exceed $200 billion by 2028. Those expectations help explain why Blackstone and other private capital managers are committing tens of billions of dollars to compute, power and supporting infrastructure.

But who absorbs the local costs while customers elsewhere receive the benefits? That question is moving closer to the center of project finance and site selection.

Energy is the most visible pressure point. The International Energy Agency projected in 2024 that electricity consumption from data centers, AI and cryptocurrency could double by 2026 and surpass 1,000 TWh. High-density AI systems can require substantial power not only for computation, but also for cooling and supporting equipment.

Water use creates another layer of scrutiny, particularly in regions facing drought or competing municipal and industrial demand. Blackstone's emphasis on water-free cooling indicates that cooling design is becoming part of the community case for a project, rather than merely an engineering decision made after a site is chosen.

Other operators are moving in a similar direction. Equinix and Digital Realty, along with hyperscalers such as Microsoft Azure, have invested in greener cooling, renewable power contracts and community engagement programs. Approaches differ by market, climate and grid, so no single technical change resolves every concern. Still, clearer resource planning can improve the credibility of development proposals.

Schwarzman compared AI's potential impact with the industrial revolution, while acknowledging that large-scale change produces anxiety because its direction remains uncertain. He also said he has been spending time with industry leaders and policymakers on balancing community concerns with America's AI leadership.

For Blackstone, that balance is now an execution issue, not simply a public-relations theme. Developers that disclose expected power and water requirements early, explain who pays for grid upgrades, and attach measurable local benefits to projects may face a more workable approval process. Those that treat community acceptance as an afterthought could find that capital and technical capability are not enough to get an AI data center built.