Domestic Resistance to Data Centers Poses Bigger Challenge Than China in AI Race, Palantir Executive Says

The United States faces a greater impediment to winning its artificial intelligence competition with China from within its own borders than from Beijing, according to Shyam Sankar, chief technology officer at Palantir Technologies. Speaking at the company’s American Builder Summit, Sankar identified mounting community resistance to new data centers and the substantial power requirements needed to operate them as the most pressing obstacles to American technological advancement.

Palantir, which develops software systems for the Pentagon, intelligence agencies and industrial manufacturers, views the infrastructure debate as potentially more damaging than any external threat. “The only threat to AI generating prosperity for America is suicide, not homicide,” Sankar said, emphasizing that self-imposed limitations pose a greater risk than geopolitical competition.

Both the United States and China are investing billions in artificial intelligence development, recognizing its strategic importance to military capabilities, economic competitiveness and global influence. Sustaining such technological advancement requires massive investment in data centers, electrical generation and transmission networks capable of supporting increasingly sophisticated computing systems.

Local communities have increasingly mobilized against proposed data center projects, citing concerns about electrical consumption, water usage, environmental impacts and whether grid expansion costs will fall to utility customers. Some initiatives have faced delays or cancellation, and state lawmakers have introduced legislation proposing restrictions or temporary bans on new facilities. The issue has emerged as a campaign focus in competitive states including Pennsylvania.

Sankar pointed to a submarine parts manufacturer that reduced production planning cycles from two weeks to under one hour after implementing AI systems, enabling the addition of a third shift. He argued that the technology already delivers substantial economic benefits but that debate over infrastructure deployment threatens to slow these gains.

Palantir structured its summit to directly address public anxieties about technological job displacement, featuring demonstrations by factory workers, healthcare professionals and military personnel showcasing workplace applications they developed. Rather than emphasizing advanced artificial general intelligence systems, the company highlighted practical tools already improving productivity across sectors.

Sankar criticized the industry’s preoccupation with pursuing artificial general intelligence—theoretical systems capable of performing broad intellectual tasks at human level or beyond—as a distraction from deploying existing capabilities throughout the economy. He compared the current landscape to early electricity adoption, noting that infrastructure exists but businesses have not yet restructured operations to maximize its potential.

Drawing parallels to historical technology transitions, Sankar suggested that insufficient national commitment to distributing AI systems across industries, rather than technological limitations, explains why the sector has not yet generated expected prosperity gains. He warned against prioritizing speculative future systems while overlooking immediate deployment opportunities.