Americans oppose huge AI data centers in their towns. Tiny ones in their homes may be a different story

LivestreamMenuMake ItselectUSAINTLLivestreamSearch quotes, news & videosLivestreamWatchlistSIGN INCreate free accountMarketsBusinessInvestingTechPoliticsVideoWatchlistInvesting ClubPROLivestreamMenu To learn more about the CNBC CFO Council, visit cnbccouncils.com/cfo Data centers are gobbling up land, driving up electric bills, and becoming a lightning rod for public discontent over big tech's power in society. Maine's legislature recently passed a data center ban in the state (but failed to override the governor's veto). According to the National Conference of State Legislatures, 14 states spanning the political spectrum from Oklahoma to New York are considering legislation that would ban or pause new data centers, as public opinion on AI has increasingly shifted to the negative. Still, despite the qualms of the public and politicians, there's a torrent of capital for building new data centers. The biggest technology companies in the U.S. are on pace to spend as much as $1 trillion annually by 2027 on AI, according to recent Wall Street estimates. Globally, a recent McKinsey report forecasts spending on data centers will hit $7 trillion by 2030. At the same time, the idea of putting data centers closer to consumers, even onto and into their homes, is gaining traction in real estate circles. Major players in housing, including homebuilder PulteGroup, are in early testing with Nvidia and California-based startup Span to install small fractional data center "nodes" on the exterior walls of newly built homes, according to recent reporting from CNBC's Diana Olick. The question of whether that model can scale, and whether homeowners, HOAs, and regulators will approve it, is up for debate. Experts point to some benefits to home-based data centers, with the home-based grid allowing for less construction needed on new ones and greater energy efficiency. "It is technically possible and already being explored," said Balaji Tammabattula, chief operating officer at BaRupOn, a U.S.-based energy and technology company currently building out a data center campus in Liberty County, Texas. He said just as a home computer can contribute processing power to a distributed network, a home can host compute hardware that feeds into a larger data processing system. The home-as-data-center model would follow similar attempts at using latent home power for crypto mining or to sell excess rooftop solar power or EV credits. "Feasibility depends on available power, internet connectivity, heat management, and the type of workload. For batch processing and non-time-sensitive tasks, the home environment works surprisingly well," Tammabattula said, though for high-density AI training or real-time workloads, residential constraints are harder to overcome. Real-world examples are unfolding now as proof of concept, as heat waste from data centers as an issue receives more attention in Europe. For instance, a UK-based startup called Heata installs servers in people's homes that process cloud computing workloads while channeling the heat generated directly into the home's hot water cylinder, effectively giving homeowners free hot water in exchange for hosting the hardware. British Gas has backed a trial of this model. At a larger scale, operations have just commenced for heat pumps that route waste heat from Microsoft data centers in Finland to warm approximately 250,000 local residents' homes. "These examples show the concept working at both the household level and the community level," Tammabattula said. The home data center brings with it a ledger of pros and cons. On the positive side, the residential model reduces land and infrastructure requirements that are becoming serious bottlenecks, distributes compute closer to end users, and creates a natural incentive for homeowners through energy savings, said Tammabattula. He added that home computing also has a strong sustainability angle since waste heat gets repurposed rather than cooled away at great expense. But your questions for ChatGPT or Claude aren't likely to be generated from a server in someone's walk-in closet or basement soon, with those deep interactions with AI still require sprawling data centers. Residential environments currently lack the power density, redundancy, physical security, and environmental controls that enterprise workloads require. And if you can't get a signal for your own WiFi or phone call, you can't power a data center. "Connectivity quality varies across households, creating reliability issues at scale. There are also regulatory and insurance questions around hosting commercial equipment in private homes," Tammabattula said. Currently, the economics only work for specific workload types like batch processing, rendering, and research computation. "Anything requiring guaranteed uptime or low latency is not a good fit for this model yet," he added. The home data center is far more likely to become a niche layer of future infrastructure than a r

Americans oppose huge AI data centers in their towns. Tiny ones in their homes may be a different story

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Americans oppose huge AI data centers in their towns. Tiny ones in their homes may be a different story

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