A Political Battle Is Brewing Over Data Centers

The article discusses the emerging political conflict surrounding a 10-year moratorium on state-level AI regulation included in former President Donald Trump’s "Big Beautiful Bill." This moratorium has raised concerns about its potential impact on the siting and regulation of AI data centers. Representative Thomas Massie criticized the provision for potentially enabling corporations to build massive AI data centers near residential areas by limiting local governments' ability to regulate zoning and land use. The National Conference of State Legislatures (NCSL) also opposed the moratorium, emphasizing that local laws help communities manage data center impacts such as utility costs, water resource use, and grid stability. The debate highlights broader tensions between federal and state authority over AI regulation. Some lawmakers, including Representative Marjorie Taylor Greene, expressed fears that the moratorium undermines federalism and could lead to forced eminent domain for data center development. Critics argue the moratorium is an overly broad restriction on state AI laws, while supporters, including White House AI adviser David Sacks, contend that a unified federal standard is necessary to avoid a confusing patchwork of state regulations that could hinder innovation. A senior official involved in the bill’s negotiation clarified that the moratorium was not intended to restrict local control over physical infrastructure like data centers, but rather to create a clear federal framework for AI model regulation. The controversy over the moratorium reflects growing local resistance to the rapid expansion of data centers across the U.S., which consume significant electricity and water resources. Data centers’ rising energy demands—expected to triple by 2035—have led to community pushback despite their economic benefits. The article underscores how the intersection of AI regulation and data center development is becoming a contentious issue, with local, state, and federal interests increasingly at odds.