BBG Intelligence: Data centres face growing trust challenge

A new BBG Intelligence whitepaper has highlighted the growing public trust challenge facing data centre development as demand for AI infrastructure accelerates across the region.

The August 2026 paper, Not in my backyard, examines how data centres have moved from a relatively low-profile infrastructure category to a focus of public debate. It says the sector is now being discussed through a wider set of issues, including artificial intelligence, energy security, water use, employment, local amenity, land use, housing, privacy, foreign investment, economic sovereignty, and transparency.

According to the paper, data centres are being asked to earn public trust before they are widely understood. It says they have also become a proxy debate for artificial intelligence, energy policy, foreign investment and economic sovereignty.

Data centres are now more than an infrastructure issue

BBG Intelligence says data centres are now a regular presence in local, state, and national news, with communities mobilising to oppose construction, governments considering investment opportunities, and developers racing to secure land, power, and planning approvals.

The report says this is not isolated to one market. It points to debate across Australia, New Zealand, Singapore, Malaysia, Thailand, and Indonesia.

While data centres are physical assets, the paper says they now represent a wider set of questions about who benefits from the digital economy, who pays for it, and who gets to decide what is built and where.

Public understanding is lagging behind development

The paper says one of the major challenges is that many people still have limited understanding of data centres and how they connect to daily life.

Unlike banks, supermarkets, airlines, or utilities, most people are not direct customers of a data centre. BBG Intelligence says this creates a different starting point for trust, because data centres are trying to build confidence while many people are still working out what they are, why they are needed, and what role they play in communities.

The paper also says data centres are linked with broader public anxieties around AI, copyright, data sovereignty, foreign ownership, water use, power demand, and the future of work. In that environment, misunderstanding can quickly become opposition, particularly when the impacts feel local and the benefits feel distant.

Regional examples show familiar questions

BBG Intelligence says Australia is not alone in facing these issues. As governments across Southeast Asia look to attract investment in AI and digital infrastructure, the report says similar questions are emerging across markets.

In Batam, Indonesia, the paper says at least 18 data centres are either operating or under development. It says concerns have grown around water security, with proposed data centre developments projected to require around 32 million litres of water per day. According to the paper, this would be equivalent to around 8.4 per cent of Batam’s current water supply, or enough to meet the daily needs of around 320,000 people.

In New Zealand, data centres have become part of a broader political and public debate about energy use, environmental impacts, and the role of data centres in a country facing electricity constraints and affordability concerns. The paper states that the Green Party called for a pause on consenting new AI-focused data centres until stronger regulatory safeguards were established.

The paper also notes how Malaysia has become one of Asia’s fastest-growing data centre markets, with Johor emerging as a major hub for AI and digital infrastructure. However, it says the pace of development has prompted concerns from community groups, environmental advocates, and politicians about water supplies, electricity networks, and local infrastructure.

BBG Intelligence says these examples show a common pattern: communities are not necessarily asking whether data centres should be built. They are asking who benefits, who bears the impacts, and what role they have in decisions that shape where they live.

The economic case is not enough

According to the report, the benefits of data centres are often described in abstract terms, including sovereign capability, digital resilience, cloud infrastructure, artificial intelligence, economic productivity, national competitiveness, and future industries.

However, it says the local impacts are more immediate. Communities can picture industrial buildings, traffic, generators, cooling systems, noise, construction disruption, and added pressure on power and water networks. What they cannot always see is the benefit flowing back to the communities being asked to host them.

The report cites Lane Cove in Sydney as one example. It says residents lodged 374 objections against one proposed data centre development, with only nine submissions in support. Concerns included noise, diesel back-up generators, water and power outages, construction disruption, and proximity to a local primary school.

The paper says this is where social licence can come unstuck. National economic benefits do not automatically translate into local acceptance if communities cannot see how value flows back to them.

Australian sentiment shows the scale of the trust challenge

The paper includes several figures on public sentiment in Australia and overseas.

83 per cent of Australians said they would not want to live near an AI data centre, while only 16 per cent believed their local community would see any meaningful benefit from a nearby AI data centre. It also says 86 per cent were concerned about AI-driven job losses.

The report states that 52 per cent of Australians did not trust large technology companies to be transparent about their water and power use, 80 per cent were worried about noise and air pollution, while 78 per cent were worried about strain on scarce water resources.

The paper revealed that 33.6 per cent of Australians could not identify any benefit from AI data centres.

Trust and transparency are now central issues

BBG Intelligence notes that data centres are emerging at a time when public trust is increasingly scarce.

According to them, communities are sceptical of corporate promises, particularly around environmental impacts, resource use, and local benefits, saying people are less willing to accept assurances at face value.

For data centres, the paper says this matters because many of the issues drawing public attention are not easily visible or understood. Power arrangements, water use, cooling technology, grid contribution, and ownership structures can all be difficult for the public to assess.

This creates a situation where concern can spread much faster than understanding.

Communications cannot compensate for decisions

The paper warns against treating social licence as only a communications problem.

BBG Intelligence says communications can explain decisions, but it cannot compensate for them. If communities are asked to absorb local impacts in exchange for broad promises of future benefit, messaging alone will not make that feel fair. It also says communications cannot make people feel genuinely involved if they are brought into the conversation after key decisions have already been made.

The challenge is not simply to communicate trust, but to earn it. Operators cannot assume understanding, goodwill, or that national economic value will automatically translate into local acceptance.

What communicators need to know

The paper is clear that social licence is easier to build into a project from the beginning than it is to recover once it has been lost. For communications professionals, the findings point to the need for earlier engagement, clearer explanation of local trade-offs, more visible community benefits, and stronger transparency around impacts such as power, water, ownership, and infrastructure pressure.

Communicators also need to be clear about the limits of messaging as communities increasingly expect evidence over assurances, agency in the process over empty consultation, and genuine change over polished messaging.

BBG Intelligence identifies six lessons for organisations:

• Start before positions harden.

• Explain the “why”, not just the “what”.

• Make local benefits visible.

• Treat transparency as an operating principle.

• Design for acceptance, not just approval.

• Assume scrutiny is permanent.