The US data centre boom is becoming a rare source of bipartisanship in investment policymaking, with state leaders on both sides of the aisle choosing to manage community fallout over bans or moratoriums.
Surging construction by hyperscalers has sparked local pushback to rising electricity prices and pressure on water supplies. But Republican and Democrat leaders at the SelectUSA Investment Summit made clear their balanced approach to curbing risks in the nation’s bid to win the AI race.
North Carolina’s governor, Democrat Josh Stein, established an energy policy task force whose recent recommendations on power use by data centres “actually mirrored the Trump administration’s recommendations”, he told fDi.
The state wants data centres connecting to the grid to pay a special large-load tariff to avoid higher rates for other customers, pay for any necessary grid upgrades like dual feeds or substations, and dial down their power demand during peak periods to avoid power outages. Alternatively, they can use off-grid power
These recommendations overlap with the (nonbinding) Ratepayer Protection Pledge initiated by the White House and signed by seven leading hyperscalers — including Amazon, Microsoft, Meta and Alphabet — in March.
In January, the White House, seven Democrat governors and six Republican governors came together to urge PJM, which operates the country’s biggest grid, to make data centres pay for any new generation built on their behalf.
No bans
Stein described both the solutions and concerns about the data centre build-out as bipartisan issues. Power prices are the biggest concern. Government data shows US electricity costs rose 6.7 per cent in 2025, outstripping 2.7 per cent inflation for all items, with analysts consistently identifying data centres as a key driver.
This and data centres’ huge water are behind bills currently being considered by at least 11 state governments, according to data tracked by the National Conference of State Legislatures. But there are signs that governors from both parties will be hesitant to sign any into law.
On April 24, Maine’s Democrat governor Janet Mills vetoed an 18-month ban on large-scale data centres that had been passed by the state, in part because it would have stopped a proposed project that she believes will bring critical jobs in the small town of Jay.
“Having a blanket moratorium against data centres was too heavy-handed for them, and I think most states would probably find that to be the case,” says Tracey Hyatt Bosman, managing director of site selector BLS & Co.
Oklahoma’s utilities regulator is working to create a higher tariff dedicated to data centres wanting to plug into the grid, similar to North Carolina’s proposal.
“There are people in Oklahoma who say ‘I don’t want it in my backyard’,” the state’s Republican governor Kevin Stitt told fDi on the event’s sidelines. “But the solution is to make sure data centres carry their fair share on the power generation side . . . banning stuff is the wrong approach.”
Stein expressed a similar sentiment. “AI is part of our future and it has the potential to dramatically improve our quality of life,” said Stein. “If we can protect North Carolinians from the negative impacts of data centres, then I am not opposed.”
Stitt, who chairs the National Governors Association, agreed that tackling power issues created by the AI infrastructure build-out has become a bipartisan issue.
Scrapping incentives
State governments are doing other things to rationalise the industry. North Carolina’s executive is reviewing a 20-year-old incentive for data centres, designed to support an industry in its infancy. Stein believes the Republican-controlled legislature is also reviewing it.
According to the National Conference of State Legislatures, at least 12 of the 37 other states offering dedicated tax incentives to data centres are considering legislation to repeal or restrict them.
With Amazon, Alphabet, Meta and Microsoft alone forecast to collectively spend $725bn on AI infrastructure globally this year, their profile does not align with that of typical incentive recipients.
