Garry Tan: Data Center NIMBYs Are Destroying $1 Trillion a Year in AI Infrastructure
garrytan · x · 2026-08-25
Y Combinator chief Garry Tan published an essay attacking data center NIMBYism, responding to an SF candidate supporting a national data center moratorium.
Key numbers: 25 data center projects were canceled in 2025 due to community pushback, up from 6 in 2024 and just 2 in 2023. Economists estimate the blocking destroys roughly $1 trillion in enterprise value annually. The counterexample is Loudoun County, Virginia, which turned data center tax revenue into $111M for schools and lower property taxes.
Tan notes the opposition is bipartisan, driven by wildly exaggerated water-use claims (a Chile data center was reported to use 1000x a city's water when the real figure was 0.2x) and electricity price concerns. Just as housing NIMBYs cost 36% of GDP, he argues the same playbook is now blocking the AI economy—and states that share the upside with communities will win.
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