Data Center Restrictions Gain Ground in U.S. Midterm Elections

For years, the technology industry has told communities the same story about data centers: they are the future, they are inevitable, and you should be grateful. Voters have now answered with a word the industry never planned for. No.

The industry's reply is that the country needs "clearer regulatory rules rather than blanket restrictions." That would be more persuasive if the industry had not spent a decade making sure there were no rules worth the name. Local officials have been handed nondisclosure agreements, shell-company project names, tax exemptions negotiated in private, and special power arrangements that residents learn about after the concrete is poured. How much water a given facility will actually draw is routinely treated as a trade secret, and the fine print of who absorbs the cost of new power often surfaces in utility dockets that few residents ever see, after the deals are effectively done. OpenAI now wants lawmakers to set standards for "responsible investment." Fine. Where was that enthusiasm when the only standard on offer was whatever a county would sign to land the project?

The moratorium is a blunt instrument, and everyone knows it. People reach for blunt instruments when the sharp ones have been taken away. When a utility's demand forecast is dominated by a handful of the richest companies on earth, and ordinary households are asked to share the cost of the transmission lines and power plants built to serve them, a halt is not hysteria. It is the only leverage residents have. In the mid-Atlantic grid, capacity costs have already jumped, with data center demand a leading cause, and families have seen it on their bills. Texas, where Gina Hinojosa ran on a moratorium, knows better than most what happens when the grid is stretched and the public is told to trust the operators.

The Data Center Coalition warns that moratoriums could cost local tax revenue and manufacturing investment. That deserves a serious answer, not a sneer. But look at what the revenue argument really is. These facilities employ remarkably few people once built. The tax base they supposedly create is often erased by the abatements communities give away to attract them. If a project is only worth having when the public waives its taxes, underwrites its power and absorbs its water use, it is not an investment. It is a subsidy with a ribbon-cutting.

The building trades have a real stake in construction work, and the Left should not wave that away. Any serious position has to grapple with it. That is exactly why the strongest form of this movement is not abolition but conditions.

Here I part ways with some in my own camp. Bernie Sanders is right about the underlying power question: a few firms are making colossal bets with public resources and private upside. But a national halt on construction, or a pause on AI development demanded by members of the Progressive Caucus, risks turning a winning local argument into an abstract one that is easy to caricature. Voters in these communities were not voting on the metaphysics of artificial intelligence. They were voting on their water, their bills and their say. Win on that ground and keep winning.

The agenda writes itself. Full public disclosure of energy and water use before approval. Large customers pay the full cost of the grid capacity they require, so residential ratepayers are not left holding the bill. Tax breaks end, or they come with enforceable jobs and community benefits. New load is matched with new clean generation instead of keeping aging fossil plants alive. And communities get a binding vote, not a courtesy briefing.

If the industry truly wants clear rules, it will accept all of that. If it fights them, we will learn that "responsible investment" meant responsibility for someone else. Either way, the politics have shifted. A year ago, opposing a data center looked like standing in the way of progress. Now it looks like asking who pays for it, which is the oldest and most legitimate question in democratic politics. The moratoriums are a warning. The industry can still negotiate, but only with people who now have the power to say no.