Former Goldman Sachs CEO Lloyd Blankfein has a message for the growing chorus of local officials and activists trying to block data centers: you might be handing the future to China.

Blankfein posted on X on Thursday arguing that decades of declining U.S. industrial capacity have hurt the middle class and, to some extent, national security. He said data center development and American leadership in AI could reverse that trend.

Then he put a fine point on it, calling the "current hysteria" to block data center projects nationwide "a gift to China."

AI Builds Could Shift Outside the U.S.

Patrick Moorhead, CEO of Moor Insights & Strategy, agreed with Arm Holdings plc (NASDAQ: ARM) CEO Rene Haas' comments on CNBC that any U.S. hesitation on data center builds will shift construction abroad due to massive global demand for AI capacity.

Moorhead elaborated that the U.S. lacks sufficient labor and time advantages to build every data center facility domestically. He added that companies largely planned U.S. data center construction to "appease" the administration, anticipating fewer regulatory barriers, with latency concerns also driving some projects.

"Put the barriers up and these will get built outside the US. And all the manufacturing jobs and taxes with it," Moorhead added.

In a previous post, Moorhead cited a conversation with a tech CEO and said, "If Texas becomes an issue they will get built in Ohio or West Virginia. If not the U.S., then outside the U.S."

Politics Complicate the U.S. Data Center Boom

Blankfein's warning comes as Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG) announced on Wednesday its plans to invest $15 billion in Malaysia over the next two years to expand data centers and other infrastructure, driven by surging demand for AI services.

The data center debate also has political consequences. Technology analyst Dan Ives said a Democratic takeover of Congress could slow the AI infrastructure buildout, estimating that 10% of planned U.S. data centers "will not happen now."

Citi Research data shows U.S. data center bans and pauses surged from near zero in mid-2025 to more than 500 by October 2026.

Futurum Equities strategist Shay Boloor highlighted the economic realities behind anti-data center campaign promises after Meta Platforms Inc. (NASDAQ: META) President Dina Powell McCormick said that a newly elected governor sought to retain Meta's investment despite pledging to restrict development.

"We don't want to lose this investment in our town. We don't want these jobs to go elsewhere," she quoted the governor as saying.

That quote captures the awkward spot many politicians find themselves in. Campaigning against data centers is easy. Explaining to voters why the tax revenue and construction jobs went to Malaysia is harder.