AI data centers are transforming rural land markets — and fueling a backlash
CNBC · C · trust 58/100
Livestream Menu Make It select USA INTL Livestream Search quotes, news & videos Livestream Watchlist SIGN IN Create free account Markets Business Investing Tech Politics & Policy Video Watchlist Investing Club PRO Livestream Menu
At a July protest against data centers in Lubbock, Texas, state Agriculture Commissioner Sid Miller took the microphone to share his concerns about data center land grabs in his home state. But what he said could apply to what's happening in dozens of states across the U.S.
"When [data centers] first started popping up, nobody really knew much about them," he said at the protest. "I found out real quick that they were taking up our very best farmland. ... And [developers] give sometimes 10 times the value, so it's hard for farmers to turn that down."
Nationwide, investments in computing power sparked by the new technology of artificial intelligence have set off a commercial land rush, sending property values soaring in unlikely and out-of-the-way places.
AI data centers house massive computer servers filled with powerful chips and systems that are needed to run AI models and workloads. The centers require vast amounts of electricity and water to power and cool the servers, and because of their large footprint, vast amounts of land.
Companies are racing into rural America to build not only data centers but facilities for the businesses constructing and servicing them. In locations across the country, entire secondary economies are popping up around technology construction sites, creating boom towns and transforming land uses.
In many cases, the transformation is pitting some of the largest corporations in the U.S., along with their backers on Wall Street, against local residents and communities, who are grappling with newfound competition for their space, infrastructure and natural resources.
Land purchases in the U.S. for future data centers reached about $6 billion in the first half of 2026 — a 79% increase from last year, according to commercial real estate firm Avison Young.
Data centers represent 27% of development sites in the U.S. this year. It's the second-highest category after apartment buildings, outranking industrial buildings, office buildings, retail spaces and mixed-use developments, according to the firm.
And that's just the data centers themselves. Commercial developments in directly related industries, such as water and power plants, and indirectly related sectors, such as housing construction for workers, likely put the total share of AI-driven land investment higher.
Comprehensive rural property price data correlated to data center and related industry construction is hard to come by. However, several reports and analyses indicate that in key data center areas commercial property values are skyrocketing.
That's especially true for properties with dependable access to regional power grids. Last year, site costs in Northern Virginia and the Northeast surpassed $8 million per acre, according to real estate firm CBRE .
Reports of developers offering prices for powered land that are far above their accustomed values are almost becoming common , despite their targeted, site-specific applicability.
In Loudoun County, Virginia, a data center developer reportedly offered $4.4 million per acre for land.
"Median land prices in Northern Virginia are nowhere close to those figures," a July brief from the National Association of Home Builders says , citing data showing the median price in Loudoun County in 2025 was $125,000 per acre.
"Home builders cannot bid in that market, because a builder's land budget is capped by what home buyers can afford," the NAHB says . "A data center operator faces no such constraint. The result is not more expensive homes on that parcel. It is no homes at all."
Residents in many communities are worried that the data centers will create a drain on water and energy infrastructure and that electricity prices for all customers would be raised to cover the costs of powering the data centers.
Pennsylvania farmer Bobbi Thompson said she's concerned about pressure on local water resources, as cloud computing company CoreWeave builds a data center in Lancaster, less than 20 miles from her Mount Joy Township home.
"Where is all the water coming from?" Thompson said. "What does that mean for us as a community?"
Concerns about rising electricity costs are not unfounded. Existing and forecast data center load growth is "the primary reason" for "high prices" within electricity capacity markets, according to a May report from Monitoring Analytics, the group that monitors the PJM market, a wholesale electricity transmission region covering all or parts of 13 states in the mid-Atlantic and Midwest.
The report says that "data center load growth resulted in a combined total increase in capacity market revenues" of $23.1 billion from auctions through 2028.
Many residents are also concerned about the general loss of open land to private commercial use.
"It's a little depressing, as far as the outlook, to physically see the farmland go away," said Lindsey Dodge, a resident of Boise, Idaho.
The land rush is visible in its starkest relief in rural America, where wide-open farmland with grid access can be worth a lot more for its computational, rather than agricultural, potential.
Thompson and her sister, Michelle Kennedy, said they have received dozens of offers in the past year for their 45-acre family farm.
Industrial property development plan as part of a rezoning application in Mount Joy Township, Pennsylvania. Source: Mount Joy Township Their next-door neighbors have applied to rezone their own farmland into an industrial complex, accommodating more than 1 million square feet of manufacturing and warehousing space. The development would have room for about 1,000 total employees and hundreds of vehicles, which Thompson and Kennedy say would harm the operations of their farm.
"Can you imagine if you had a thousand…
Read the original at CNBC →
Open in TruthVane →