The push to make New Hampshire a more hospitable place for new AI data centers is running into early problems, from angry local protesters to large tech firms showing a lack of interest in building facilities here.

Last year, there was a sense of optimism that it was only a matter of time before giant tech companies like Amazon and Google proposed building new AI data centers in the state, especially after lawmakers made it easier for firms to build their own power stations to support their energy-devouring AI data facilities.

Officials say Amazon, Google and other “hyper-scaler” firms have indeed looked into the prospect of building AI data centers in New Hampshire – but no projects have been proposed.

And many think it may be a long while before any deals are proposed for a number of reasons, including the state’s high costs of construction and electricity, supply chain issues and other factors that make New Hampshire a less desirable place to build compared to other states.

“Last year’s excitement over (AI data centers) has died down a little,” said James Monahan, president of the Dupont Group, a Concord consulting and lobbying firm that represents the New England Power Generators Association. “Things are moving slower than last year’s enthusiasm suggested.”

It’s just not the economics that are holding back development of new AI data centers in New Hampshire. There appears to be growing community opposition to AI data centers on the grounds that they consume too much water and electricity and generate too much noise – all to the detriment of existing utility customers and nearby neighbors.

Earlier this spring, Hampton businessman Tom Moulton proposed possibly developing an AI data center along Route 4 in Nottingham – only to run into intense, well-organized opposition that forced him to quickly withdraw his project application.

The breadth and passion of the Nottingham opposition, some of it centered on fears of skyrocketing electric rates tied to a new AI facility, shocked local lawmakers, Democrats and Republicans alike.

“It stirred up a whole lot of grassroot concerns and opposition,” Monahan said of the now-abandoned Nottingham AI proposal.

Preserving Municipal Control

In Concord, lawmakers spent much of this past spring sparring over AI data-center issues in general.

A bill sponsored by state Sen. Debra Altschiller, D-Stratham, would have given local governments more authority to place limits on future AI data-center developments.

Among other things, SB 439 would allow towns to require that new AI data centers have adequate electric capacity. The bill also addressed noise protections for neighbors and landscape setback issues.

But legislative supporters of AI data centers struck back, stripping SB 439 of its original wording and replacing it with language limiting towns’ ability to regulate data centers.

The legislation was tabled after attempts to find compromise failed.

“It’s essentially dead,” Altschiller said of SB 439.

Altschiller emphasized her goal with the bill was not to block future AI data centers.

“I am not anti-AI data centers,” she said. “I am pro-municipal control. All I want is to give the towns the tools to deal with AI data-center matters.”

State Rep. Michael Vose, an Epping Republican, said Nottingham protesters recently made clear to him their concerns about Moulton’s AI data-center proposal.

“Nottingham is practically in my back yard, so I got a whole earful of it” from protesters, he said.

But the real issue at the heart of the Nottingham controversy, he said, was fear of artificial intelligence in general – not concerns over data centers.

“They’re afraid AI will take their jobs,” he said. “They’re afraid it will take over control of things. They’re very nervous [about AI]. It’s not really about data centers themselves.”

Vose, who sponsored last year’s bill that made it easier for firms to build non-grid power plants in the state, said he thinks AI firms will eventually decide one day to build data centers in NH.

But he acknowledged it will probably take longer than anticipated – and that any delay “may not be a bad thing.”

Delays could provide time to develop more cost-effective and efficient power-generation technologies, such as small modular reactors, that could power future AI data centers, he said.

For the time being, though, it looks like major AI data center developers are simply not that interested in building facilities in the state.

Unitil, which provides electricity and natural gas to about 81,000 customers in the state, said in a statement there’s not much happening when it comes to developers approaching the utility with electric-usage proposals.

“While we’re aware of the significant growth in data center development nationally, Unitil has not seen a notable level of interest from large-scale developers in our New Hampshire service territory at this time, with one inquiry to date gauging project feasibility, and no firm proposals to our knowledge,” the Unitil statement said.