Lawmakers warn of alleged Chinese influence in US data center opposition
Two top House Republicans are warning that the Chinese Communist Party is undermining America's AI infrastructure by covertly funding opposition to data center development. Lawmakers are urging the Treasury Department and IRS to investigate whether overseas money is being funneled through tax-exempt nonprofits to block data centers. They allege these groups are exploiting legitimate concerns about electricity and water usage to slow US technological advancement.
House Ways and Means Committee Chairman Jason Smith, R-Mo., and House Select Committee on the Chinese Communist Party Chairman John Moolenaar, R-Mich., have sent a letter to Treasury Secretary Scott Bessent and IRS CEO Frank Bisignano, urging an investigation into whether the Chinese Communist Party (CCP) is using U.S. tax-exempt nonprofits to hinder America's AI data center development. The lawmakers allege that Chinese influence operations are exploiting tax-exempt organizations, nonprofit networks, and social media campaigns to fuel opposition against critical AI infrastructure.
Specifically, they cited American-born tech tycoon Neville Roy Singham, who allegedly funneled $285 million since 2017 to six U.S. nonprofits, including his wife Jodie Evans's group, CodePink, and pro-China communist groups like the Party for Socialism and Liberation and the ANSWER Coalition. These groups, which operate with tax-deductible status, are active in promoting communist regimes and organizing protests against data centers, as seen in a recent Chapel Hill, N.C., demonstration. The lawmakers expressed concern that foreign adversaries are weaponizing the U.S. tax code to harm an emerging American industry and called for an investigation into whether these tax-exempt organizations are operating for the benefit of foreign-aligned interests or if donor-advised funds are laundering foreign money.
Smith and Moolenaar highlighted that while Americans have legitimate concerns about data centers' impact on electricity costs and water usage, foreign-backed organizations should not be allowed to exploit these concerns to slow U.S. technological development and give China an advantage in the AI race. They emphasized the need for greater transparency regarding the funding flow among Singham's connected organizations and suggested potential Foreign Agents Registration Act violations. A report by the Bitcoin Policy Institute identified 21 anti-data center campaigns led by the Party for Socialism and Liberation across 14 states, contributing to 10 data center moratoria, one permanent ban, and four rejected projects, representing significant proposed investment.
The congressional committees are examining how CCP-linked influence operations allegedly exploit America’s tax-exempt sector to sow discord and undermine democracy. The lawmakers concluded that while opposition to data centers is a legitimate public debate, Americans deserve to know if foreign adversaries are attempting to influence these discussions through covert funding and social media campaigns.