Amazon Web Services CEO Matt Garman has warned that growing opposition to data center construction across the United States could undermine the country’s position in the global artificial intelligence race, as communities push back against the electricity, water and environmental costs of the infrastructure boom.

In a more than 3,000-word blog post published Friday, Garman argued that a broad slowdown in data center construction would have consequences extending well beyond individual projects, potentially limiting the computing capacity needed to develop and deploy increasingly powerful AI systems.

“The consequences would last generations” if the United States halted the buildout, Garman wrote.

“There is urgency to this data center buildout because we aren’t the only country that sees the benefits of AI for the economy and national security, and the countries that lead in AI will shape it and get the most from it in the short and long run,” he said.

“The choices we make today will determine that outcome, and a lapse in our nation’s focus or resolve could put us behind, and potentially irreparably so.”

Garman said more than 100 data center moratoriums are being considered across the country. If enacted, he argued, they could constrain the infrastructure required to support AI development at precisely the moment when the U.S. is competing with other countries to expand computing capacity.

“As a country, we can’t afford to find ourselves in that position,” Garman wrote.

The warning reflects a widening conflict between the economic ambitions surrounding AI and the physical realities of building the infrastructure required to support it.

The technology industry has committed hundreds of billions of dollars to data centers, GPUs, power infrastructure and related equipment. But communities hosting or considering new facilities are increasingly questioning whether the economic benefits justify the demands placed on local electricity grids, water systems, roads and the environment.

For Amazon and other cloud providers, that resistance represents more than a permitting obstacle. Delays can push back the availability of computing capacity, increase construction costs and complicate long-term contracts with AI customers.

AI’s Infrastructure Problem

Garman compared the current data center expansion with the development of America’s modern transportation infrastructure after World War II.

He described the construction of highways as a transformation that reshaped the U.S. economy and way of life, arguing that data centers represent a comparable infrastructure buildout for the digital economy.

“Seventy years later, we’re in the midst of the largest infrastructure buildout since the highways, our digital infrastructure,” he wrote.

The comparison highlights an important feature of the AI economy: advances in software are ultimately constrained by physical infrastructure. AI models require enormous quantities of computing power, while that computing power requires data centers, electricity, cooling systems, semiconductor equipment, and increasingly large connections to the power grid.

Amazon is one of the companies at the center of that investment. AWS provides cloud computing infrastructure to companies developing and deploying AI systems, meaning growth in AI usage translates into demand for additional computing capacity.

Garman argued that data centers already support services ranging from online shopping and banking to stock trading, travel reservations, and entertainment. He also pointed to potential applications in healthcare, education, defense, intelligence, cybersecurity and satellite operations.

“AI will power the next generation of businesses, hospitals, schools, and other critical public services, as well as critical defense systems, intelligence analysis, cyber defense, and satellite operations,” Garman wrote.

He also argued that the industry will generate new skilled jobs associated with building and operating the infrastructure.

That broader economic argument is central to the industry’s response to local resistance. Cloud companies present data centers not simply as private facilities serving technology companies, but as foundational infrastructure for an economy that is becoming more dependent on computing.

The difficulty is that the costs are often concentrated locally while many of the benefits are distributed nationally or globally. A community may bear the burden of higher electricity demand, water consumption, construction traffic and changes to land use, while the resulting AI services and economic activity may accrue primarily to technology companies and their customers elsewhere.

That tension is helping drive the growing number of proposed moratoriums.

Amazon Offers Communities More Money

Garman acknowledged that some communities have legitimate concerns about data center development, particularly around electricity consumption, water use and pollution.

Amazon is attempting to address some of those concerns through additional investment. The company plans to invest more than $1 billion over the next five years in communities where it operates data centers, Garman said.

“This is not Amazon deciding what communities need, it is Amazon providing resources and letting communities decide,” he wrote.

The commitment represents an effort to make the local economic benefits of the infrastructure buildout more tangible. But it also highlights a major question surrounding the industry’s expansion: is community opposition primarily a matter of insufficient economic compensation, or do some communities simply not want the environmental and infrastructure costs associated with large-scale computing facilities?

The answer to this question is likely going to be demanded as AI data centers grow larger.

Modern facilities can require enormous amounts of electricity, creating pressure for new generation capacity and transmission infrastructure. In areas where grids are already constrained, data centers can compete with households and other industries for available power.

Water is another source of concern, particularly in regions where cooling systems could increase demand on scarce resources. The environmental impact can also vary substantially depending on how the electricity used by a facility is generated.

For cloud providers, therefore, securing land is only one part of the development challenge. They must also secure power, transmission capacity, water where necessary, permits and community acceptance. The result is that the physical expansion of AI can move considerably more slowly than the development of the software itself.

Garman also raised a geopolitical dimension, arguing that foreign governments may benefit from U.S. resistance to data center construction. He said there are “widespread reports of various countries intentionally seeding misinformation in the US about data centers to trick us into slowing down.”

That is a huge claim, but it also illustrates how technology companies are framing AI infrastructure as part of national competition rather than simply a commercial investment.

The United States and China are competing to develop advanced AI systems, while other countries are also attempting to build domestic computing capacity. Access to electricity, advanced chips, and data center infrastructure has consequently become part of the broader competition over AI capability.

For Amazon, maintaining rapid construction is also a commercial priority. AWS is competing with Microsoft Azure and Google Cloud to supply computing capacity to AI developers, while specialized data center operators and so-called neocloud companies are expanding to meet demand from companies that cannot secure sufficient capacity from traditional cloud providers.

That has provided an incentive for technology companies to emphasize the costs of delay. But the industry’s infrastructure push also faces a financial constraint. Data centers require huge upfront investments, and developers now need to secure long-term power and customer commitments before construction. Higher interest rates and rising equipment and construction costs can make projects less attractive if permitting or community opposition delays completion.

The debate is therefore moving beyond whether AI will transform the economy to a more immediate question of who should pay for the infrastructure required to make that transformation possible. Amazon’s $1 billion community investment may help address some local concerns, but it does not resolve the larger trade-off. The United States can build more computing capacity and potentially accelerate AI development, but doing so requires communities to absorb at least some of the associated costs.

Tesla shares rose about 5% on Friday after the electric vehicle maker reported third-quarter deliveries above Wall Street expectations, giving investors a reprieve from a year of falling vehicle sales and intensifying competition.

Tesla delivered 486,532 vehicles in the three months through September, exceeding analysts’ consensus of about 461,100 compiled by StreetAccount and also beating Tesla’s own company-compiled estimate of 461,974.

The result marked an improvement from the second quarter, when Tesla delivered 480,126 vehicles, but deliveries were still about 2% below the 497,099 vehicles sold in the same quarter a year earlier.

Tesla produced 464,391 vehicles during the quarter, meaning deliveries exceeded production by more than 22,000 vehicles. The company does not provide a detailed regional or model-level breakdown of deliveries, although it said the entry-level Model 3 sedan and its best-selling Model Y SUVs represented 98% of total deliveries.

Deliveries are widely used as the closest approximation of Tesla’s quarterly sales, although the company does not precisely define the measure in its shareholder communications.

The stronger-than-expected number nevertheless arrives at a difficult point for Tesla. Its shares were down 21% for the year as of Tuesday’s close, making it the weakest performer among its megacap technology peers, while the company continues to contend with competition from Chinese manufacturers offering lower-priced and sophisticated electric vehicles.

Companies including BYD and Xiaomi have expanded their presence in the EV market, increasing pressure on Tesla in a sector where price, product variety and technology are becoming increasingly important.

A Beat, But Not Yet A Return To Growth

The quarterly delivery increase provides Tesla with a useful near-term boost, but the year-over-year decline shows that the company has not yet reversed the broader contraction in vehicle sales.

Tesla is coming off consecutive annual declines in vehicle deliveries, with the weakness attributed in part to a consumer backlash involving CEO Elon Musk and the loss of a US federal EV tax incentive.

The federal tax credit had been established under the Inflation Reduction Act signed by President Joe Biden in 2022 and was originally scheduled to remain available through 2032. The subsequent spending legislation signed by President Donald Trump accelerated its expiration, with the credit ending after September 30, 2025.

That policy change removes an important source of support for US EV purchases at a time when Tesla is already dealing with a more competitive market.

Morgan Stanley analysts had warned before the results that the third quarter would represent a difficult comparison for Tesla. Last year’s third quarter was the company’s record delivery quarter, while second-quarter deliveries exceeded production by roughly 28,000 vehicles, according to the analysts.

Therefore, the latest figures provide a mixed signal. Tesla has managed to increase deliveries sequentially and beat expectations, but it has not yet demonstrated that demand has returned to the levels required to produce sustained annual growth.

That is considered a serious matter because the global EV market itself is expanding.

According to the International Energy Agency’s 2026 Global EV Outlook, electric and hybrid vehicles have continued to gain share globally. EVs and hybrids accounted for less than 5% of new vehicle sales worldwide in 2020, but represented one in four new cars sold in 2025.

The IEA has also pointed to the conflict involving Iran and higher gasoline prices as factors that have reinforced the case for EVs by increasing concerns over energy security and fuel costs.

Tesla’s sales weakness is therefore occurring against a broader market backdrop that is not contracting in the same way. The challenge is increasingly about Tesla’s share of a growing EV market rather than the size of the market itself.

Energy Storage Offers Another Growth Channel

Tesla’s quarterly update also highlighted a business that is becoming increasingly relevant to the company’s growth profile: energy storage.

Tesla deployed 13.7 gigawatt-hours of energy storage products during the third quarter, including its Megapack and Megablock systems. That was up from 13.5 GWh in the second quarter and 12.5 GWh a year earlier.

The company does not clearly define what it means by “deployment” in its shareholder communications, making direct comparisons somewhat difficult, but the figures show continued expansion in a business linked to the rapid growth of electricity demand and renewable energy infrastructure.

Megapacks are used in commercial and utility-scale projects, while Megablocks combine four Megapacks around a transformer. The systems use lithium-ion and other battery technologies to store electricity from sources such as solar and wind and provide backup capacity for utilities and data centers.

That market is becoming increasingly important as electricity demand rises from data centers and other energy-intensive infrastructure.

Tesla also has an unusual relationship with SpaceX, Musk’s privately held space company. SpaceX is a major customer for Tesla’s backup battery products and has also purchased millions of dollars worth of Cybertruck pickups.

For Tesla investors, the storage business provides an additional growth avenue at a time when the automotive operation is facing tougher conditions. But the company’s valuation and investor narrative remain closely tied to its ability to expand beyond its current vehicle lineup and regain momentum in the core auto business.

Friday’s delivery beat therefore offers some relief rather than a definitive turnaround. Tesla exceeded expectations by more than 25,000 vehicles and improved on the previous quarter, but annual deliveries remain below last year’s level, and competition continues to intensify.

The next major test will likely come with Tesla’s third-quarter earnings report on October 21 after the market closes. Investors will be looking beyond the delivery headline for evidence on pricing, margins, cash generation, energy storage growth, and the company’s broader outlook for vehicle demand.