Big Tech’s data center build-out is facing mounting resistance from lawmakers.
This week, Sens. Josh Hawley (R-Mo.) and Richard Blumenthal (D-Conn.) introduced the first bipartisan bill in Congressdesigned to prevent data center power usage from affecting consumers’ electric bills.
A week earlier, on Feb. 6, New York became at least the sixth state to have its legislators propose a bill to pause data center construction within state lines. This legislation would effectively shut out New York as a potential site for new data centers if it passes.
In doing so, New York’s legislators join federal state congressional leaders across the country in attempting to legislate an industry that has boomed and threatens an already overtaxed power grid.
“The regulatory framework was not designed for single-sector load shocks, so policymakers are attempting to adjust in real time to the scale and speed at which the load forecasts are changing,” Didi Caldwell, founder and CEO of site selection advisory firm Global Location Strategies, told Yahoo Finance.
“The system is ill-equipped to address the dramatic increase in demand created by AI data centers,” she said.
And lawmakers are trying to catch up.
‘Energy-guzzling facilities’
The four Big Tech “hyperscalers” — Microsoft (MSFT), Alphabet (GOOGL, GOOG), Amazon (AMZN), and Meta (META) — are on track to spend upward of $650 billion on artificial intelligence investments this year.
In addition to cutting-edge chips from the likes of Nvidia (NVDA), tens of billions of these dollars have flowed into data center construction, which has spiked power demand and pushed consumer costs higher.
According to estimates from the Lawrence Berkeley National Laboratory, power demand from US data centers doubled between 2018 and 2024 and could triple by 2028.
In the service region for PJM Interconnection, the country’s largest grid operator, capacity prices — the price utilities must pay to generators for electricity — have exploded, rising to $329.17 per megawatt-day for the 2026-2027 period from $28.92 in the 2024-2025 period.
Major data center developments also use large amounts of water to cool the high-running electronic components housed inside their walls. So-called megasize hyperscaler data centers are forecast to use more than 150 billion gallons of water between 2025 and 2023, equivalent to the annual water usage of 4.6 million US households.
For their part, AI developers have pledged to alleviate some of the burden on local communities.
