Data centers become flashpoint in gubernatorial races
Data centers are becoming a major political issue in gubernatorial races across the US, as candidates grapple with public concerns over AI infrastructure, energy prices, and land use. Governors and challengers in states like Pennsylvania, Texas, and Georgia are proposing new regulations, tax changes, or moratoriums on data center development. This political shift reflects a growing backlash against the rapid expansion of these facilities and their perceived impact on communities and resources.
Political backlash against data centers is emerging as a significant issue in gubernatorial elections nationwide, transforming the massive AI infrastructure into a flashpoint in state races. Sam Silverman, founder of Silverman Strategy Group, notes that data centers have become an easy political target due to public concerns regarding artificial intelligence, energy costs, and land use.
In Pennsylvania, incumbent Governor Josh Shapiro has recalibrated his stance on data centers. After previously welcoming a $20 billion Amazon data center project, Shapiro unveiled the Governor’s Responsible Infrastructure Development (GRID) initiative, a framework requiring developers to cover power generation costs, increase transparency, and enter into community benefit agreements. This measure passed the Pennsylvania House but awaits a State Senate vote. His challenger, Pennsylvania Treasurer Stacy Garrity, initially supported data center deregulation but has since shifted, calling for a pause on development.
Similarly, Texas Governor Greg Abbott, eyeing reelection, has changed his position. Following a $40 billion Google investment in the state, Abbott recently advocated for blocking new data center development in rural areas. He also proposed repealing sales tax exemptions for data centers and mandating that they contribute to Texas’s electric capacity and utilize water-efficient technologies. Democratic gubernatorial candidate Gina Hinojosa has criticized Abbott for his previous support of data center tax exemptions, arguing he is backtracking due to public pressure over utility costs.
Georgia’s gubernatorial race also highlights these dynamics. Former Atlanta Mayor Keisha Lance Bottoms has called for a temporary halt to new data center construction, citing concerns about higher utility bills and strained water resources. Current Governor Brian Kemp criticized her view, while billionaire health care executive Rick Jackson, who is invested in a data center project, supports data centers but believes communities should have a say in their placement. The data center industry, meanwhile, expresses frustration that AI applications are solely tied to data center infrastructure in these political debates, often obscuring their other uses and the industry's limited input on application-side issues.