Prompts now, pollutants later: Report claims data centers are harming the environment to the tune of $25 billion and inducing a debt on the health of current and future generations

The economic cost of harm from data centers could be as high as $25 billion

by · TechRadar

News By Benedict Collins published 29 April 2026

(Image credit: Shutterstock)

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  • Data centers and their energy requirements are causing pollution
  • This pollution is causing knock-on costs for healthcare and the environment
  • A cost of as much as $25 billion is theorized, but it could be higher

The surge of AI and its demand for data centers could be costing the US economy $25 billion in environmental damage and causing serious health complications for those living in the vicinity of data centers.

These figures come from a new working paper written by Nicholas Z. Muller, an economist at Carnegie Mellon University, and published by the National Bureau of Economic Research.

The paper examined around 2,800 operational data centers on their energy requirements, and examined the impact of additionally generated air pollutants and greenhouse gases on the environment, the health of US citizens, and its cost on the economy.

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Lung disease, heart conditions, premature mortality

In the paper, Muller calculates the $25 billion gross external damages (GED) figure by calculating not only the artificial intelligence usage within data centers (to which he attributes a figure of $3.7 billion), but also the wider, indirect costs of the pollutants caused by generating the necessary energy to power data centers.

Muller’s paper theorizes that the planned expansion of data center construction could increase associated damages by up to 85% in the near term.

These costs include the additional burden on healthcare facilities and day-to-day medical requirements by local residents, which Muller attributes to the negative effects of exposure to the airborne pollutantPM2.5, which can cause lung disease, heart conditions, and higher rates of premature mortality.

There are also wider social costs associated with pollutants and greenhouse gasses that are yet to materialize, but nonetheless are being emitted from the additional energy sources being constructed or revived to fuel the boom in demand for energy.

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