Labor Unions, AI Infrastructure, and the Backlash to the Backlash

What organized labor’s response reveals about project economics, AI infrastructure investment, and the next phase of the data center buildout

For two years, the story around data centers was resistance and unanimity. Communities fought projects tooth-and-nail over power, water, construction noise, and anxiety about what an accelerating AI infrastructure buildout would mean. That opposition has not disappeared, but the politics around it are becoming harder to describe as a simple contest between behemoth technology companies and the communities in their path.

As The Wall Street Journal reported on August 28, 2026, many trade unions are now mobilizing in support of data center construction. Some have sharply warned politicians that opposition to new projects could cost them union backing. In Kansas, a union representing HVAC and railroad workers broke a long pattern of Democratic endorsements over the issue. Electricians and pipefitters have turned out at public meetings to argue for the projects and the work they create. Call it the backlash to the backlash.

This development reveals a second, growing constituency: those less concerned with the immediate concerns of the buildout than the lack of valuable, enduring, lasting jobs they provide. But what does mean for the future?

Key Takeaways:

• The data center debate is no longer only about local resistance; organized labor has become a major constituency for continued AI infrastructure development.
• AI infrastructure projects depend on physical systems – data centers, power, cooling, networking, hardware, engineering, and construction – not just software.
• Sections 48E, 41, and 45X can apply to different parts of the AI infrastructure ecosystem, depending on the asset, activity, and participant.
• Labor, engineering, procurement, and sourcing decisions can affect both eligibility and credit value.
• Tax strategy is most useful before bids, contracts, and construction decisions narrow the available options.

The AI Infrastructure Conversation Is Shifting

This does not mean the dust is settling or that opposition is fading. Local concerns can still delay a project, change its scope, raise its cost, or stop it altogether. If anything, this new divide makes the path ahead even more complex.

Companies cannot plan a multiyear infrastructure project around the assumption that public sentiment will move in one direction. They must plan around what they can control: how the project is powered, who builds it, what technical work must be completed, where its components come from, and which incentives apply.

The One Constant

Tax credits are not one program or monolithic reward for constructing a data center. They are a group of incentives that can apply to different parts of the data center ecosystem – and to the groups, laborers, contractors, and companies helping to build them. Their value depends on the property being placed in service, the work being performed, the parties performing it, and the records supporting the claim.

Three federal provisions illustrate how that value can appear across a single project:

Section 48E: Helps pay for cleaner power and energy storage.

Section 48E supports qualifying investment in clean electricity generation and energy storage. For a data center, the credit may become relevant through the infrastructure developed to supply or store power rather than through the facility by itself. The base credit is 6%, with a potential increase up to 70% when other requirements are satisfied, such as prevailing wage and registered apprenticeship act.

Section 41: Rewards companies for solving technical problems. (R&D)

Section 41 can apply to qualifying research activities performed while companies work through genuine technical uncertainty. In the data center ecosystem, that can include eligible engineering related to cooling, power distribution, hardware, controls, or other technical systems. The credit does not apply simply because a project involved engineers or sophisticated equipment. The work and documentation must satisfy the applicable requirements.

Section 45X: Rewards manufacturers for making energy components in America.

Section 45X rewards U.S. manufacturers for producing eligible energy components, including certain battery and solar components that can support the power infrastructure surrounding data center development. The credit belongs to the qualifying manufacturer, but it can still affect sourcing, capacity, and investment decisions across the supply chain.

How alliant Helps Companies Capture the Opportunity

The politics may keep oscillating, but the credits give companies something concrete to plan around. Factoring them into a project early can improve the economics and inform major decisions about power, labor, engineering, and procurement before construction begins and the options start narrowing.

alliant helps companies identify federal, state, and local incentives connected to a data center project and determine where those programs intersect with planning, labor, engineering, procurement, and investment decisions. For owners and operators, that can include evaluating the Section 48E Investment Tax Credit alongside the project’s energy strategy and labor requirements. For EPC and EPFC firms, contractors, and specialty trades, it can mean accounting for credit requirements while bids and contracts are still being formed. For engineering firms and other companies performing technical work, alliant can assess whether eligible activities support a Section 41 R&D Tax Credit claim and what documentation is needed to support it.

The politics surrounding new projects will continue changing. The companies best positioned for what comes next will understand the communities, labor demands, technical requirements, and incentives well enough to make them part of the same project strategy. For a closer look at that connection, read The New Economics of AI Infrastructure: Why Tax Strategy Is Now Part of Energy Strategy by alliant Chief Operating Officer Matt Noll.

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