Arizona cities reject data center projects, impacting state's AI infrastructure development
Arizona cities are increasingly rejecting data center developments, leading to significant economic losses, with Tucson reportedly turning away $3.6 billion and Chandler $2.5 billion. This trend, driven by local policymakers citing environmental and energy concerns, is criticized for dismantling Arizona's competitive data center market. The article argues these actions could hinder the state's AI future and cause capital to shift to other states.
Andrew Gould, a former Arizona Supreme Court justice, argues in a guest commentary that Arizona is jeopardizing its leadership in artificial intelligence by systematically rejecting data center projects. Gould highlights that despite the critical role of AI infrastructure in the global economy and national defense, local policymakers across Arizona are making it more challenging to build these facilities. He cites specific examples where Tucson reportedly turned away $3.6 billion in investment, Chandler $2.5 billion, and Phoenix significantly revised its zoning code after project approvals were in motion.
Gould contends that the opposition, often based on emotional and political attacks or exaggerated environmental and energy concerns, overlooks the economic benefits and technological advancements that mitigate impacts, such as reduced water usage. He contrasts Arizona's approach with Virginia's successful strategy, where a stable regulatory environment over two decades transformed data center investment into a major economic driver, generating nearly $40 billion in output and supporting over 112,000 jobs in 2025.
The commentary suggests that Arizona's current trajectory of "unanimous rejections" is not merely about specific projects but reflects a broader failure to embrace the future of AI. Gould asserts that these local decisions undermine fundamental property rights and prevent the state from capitalizing on investments, such as those made by Nvidia and TSMC in AI chip manufacturing. He concludes by urging Arizonans to recognize the strategic importance of data centers and advocate for fact-based decisions to prevent economic opportunities from being lost to other states or America's competitors.