RUTH SUNDERLAND: Will the Nimby backlash against data centres burst the AI bubble?

Question: What do a £50m boost to the wealth of Lord Rothschild this week and the US midterm elections in November have in common?

Answer: AI data centres (sorry, but my fingers just refuse to type the word ‘centers’, spelled American-style). 

Nat Rothschild’s shares in his Volex electrical cable business rose strongly on Tuesday on the back of rising demand from data centres, particularly in the US.

Those self-same centres have provoked a growing bipartisan backlash from Nimby (Not in my back yard) protesters in the US alarmed at their proliferation.

Experts at Barclays are the latest to warn that anger at the huge centres, which are being built to train new models and to cope with increased usage, will be a major issue in the US mid-term elections, bringing political risks for investors in AI.

That, of course, includes millions of Britons who are exposed to AI shares via their pension or ISA savings.

An estimated $3trillion will go into AI data centres globally between 2026 and 2030. Much of it is earmarked for America.

Analysts, including the redoubtable Aniket Shah at Jefferies, have been highlighting resistance to the build-out as a risk for some time. As Shah has pointed out, opposition to having a hulking great data centre on the doorstep has broadened into more general anti-AI sentiment.

The protests have become so loud that Anthropic, the company behind Claude, plans to cite pushback against data centres and negative public opinion towards AI as risk factors in its stock market float later this year.

People don’t like them because they are big and ugly, and generally believed to both consume vast amounts of water and guzzle energy, pushing up consumer bills.

Such beliefs may or may not be wellfounded. But there is no escaping the fact that data centres are the looming physical reality of AI. They take popular fears out of the realm of the abstract and into the real world.

AI worries for the many, while a tiny minority of tech billionaires grow ever richer, is a scenario that also applies in the UK. Similar protests may emerge here.

Britain is the most exposed of any major economy to AI disruption, according to research by Deutsche Bank.

The perception that AI is taking jobs from the young is an especially emotive trigger, with more than a million 16 to 24-year-olds not in education, employment or training. 

There is, as Anthropic boss Dario Amodei recently wrote on X, a crisis of trust towards AI and governments.

People, he says, ‘always suspect that we are cooking up some new way to screw them over’. Quite.

AI needs to be regulated and thought needs to be given to setting up wealth funds to distribute its financial gains across society rather than keeping them in the hands of a tiny few.

Until and unless that happens, data centres are a potent symbol of anxiety over the impact of AI on jobs and quality of life. Bulldozing through local opposition to build them feels oppressive, sending a signal that AI’s requirements are taking precedence over humanity’s needs.

Elon Musk may be on to something with his plans to build them in space.

Dolly’s dollars

Behind Dolly Parton’s cartoonish curves and the homespun country image, she was an inspirational businesswoman.

Forbes estimated her net worth at $450m as of June 2025 and ranked her ten out of ten on its ‘self-made’ score, as well it might, considering her dirt-poor upbringing. Her words, not mine.

Famously, she refused in the 1970s to hand over half the publishing rights to ‘I Will Always Love You’ to Elvis Presley when he wanted to record it. Whitney Houston’s version for ‘The Bodyguard’ in 1992, which Parton fully owned, earned multi-million dollar royalties.

Unlike many peers she did not fall for exploitative deals and built an empire, including the Dollywood theme park.

She was an astute custodian of her unique brand and a philanthropist who gave more than 200m books to kids around the world via her Imagination Library.

Parton was not only a musical legend but also an enlightened capitalist who could put many a CEO or tech bro to shame.

What a brilliant way to make a living.