‘Let Data Reign’: Trump decries opposition to data centres in US

President Trump urged US communities to embrace data centres, arguing they will create jobs and warning that opposition could push business toward China. The article highlights mounting backlash over electricity demand (power-grid/outage and higher utility bills), water use for cooling amid droughts, and calls for stricter federal regulation, with a Gallup poll showing 71% of Americans oppose AI data centres locally. Vice President JD Vance softened the stance by saying firms should add power back to the grid rather than remove it, but bipartisan scrutiny suggests potential policy tightening that could affect data-centre investment and operating costs.

Analysis

This is a permit/ownership story more than a pure AI-demand story. The incremental winner is the layer of the stack that can monetize power bottlenecks: electrical equipment, switchgear, cooling, and onsite generation. If the political message hardens into "bring your own power," capex shifts away from marginal data-center landlords and toward vendors that sell the pickaxes, while also improving pricing power for independent power producers and gas-turbine supply chains.

The bigger near-term risk is that public support does not remove local veto points; it can actually embolden opponents by making the projects more visible. That means the revenue impact is likely delayed 1-3 quarters, with the real catalyst being whether utilities sign firm load agreements and whether states relax interconnection rules. If approvals remain fragmented, data-center operators may face higher upfront capex and lower project IRRs, which would pressure multiples before it shows up in earnings.

Contrarian view: the market may be underestimating how much of this becomes a private-grid trade rather than a compute trade. The most durable beneficiaries over 6-18 months are not the hyperscalers but the vendors that solve power and water constraints; the losers are utilities and REITs if customers are forced to self-generate or if communities demand ratepayer protection. Falsifier: a wave of utility-backed builds or federal permitting streamlining within the next 1-3 months would turn this from a bottleneck story into a genuine acceleration trade.

Key Decisions for Investors

• Long VRT / short EQIX for 1-3 months: play the shift from data-center square footage to power-and-cooling capex; VRT has cleaner earnings linkage if builds continue but get harder to power, while EQIX is exposed to slower permitting and higher utility costs.
• Long ETN on pullbacks over the next 4-8 weeks: if the market starts pricing self-generation and grid upgrades, Eaton should capture the most visible share of incremental electrical capex; stop if order growth decelerates or data-center backlog commentary weakens.
• Long GEV or CEG vs short XLU as a power-scarcity hedge: if communities force on-site generation and behind-the-meter solutions, merchant power and turbine names outperform regulated utilities that cannot fully pass through upgrade costs.
• Avoid chasing broad AI-exposed beta until there is evidence of state-level approvals: if moratoria spread, fade rallies in data-center-heavy REITs and infrastructure names; if approvals accelerate, switch to a momentum long in VRT/ETN rather than the operators themselves.
• Watch JD only as a second-order China proxy, not a clean direct beneficiary: any relative strength would require visible evidence that US restrictions are pushing training/buildout spend offshore; absent that, it is a weak signal and not a high-conviction trade.