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From the\u00a0farmlands of Northern Virginia<\/a>\u00a0to the\u00a0industrial parks of New Jersey<\/a>, massive new data centers are popping up across the country to power America\u2019s artificial intelligence revolution. The energy needed to power these data centers is driving national energy usage to record levels, and these costs are\u00a0falling on American households<\/a>\u00a0as soaring electricity consumption has translated into higher home utility bills, as well as health and environmental risks.<\/p>\n As the demand for computing power increases, the technology, utility and finance industries have poured millions into supporting the policies and resource allotment they need to expand data centers. Tech companies are\u00a0campaigning for faster approvals<\/a>\u00a0and weaker regulatory roadblocks; utilities are working to\u00a0pass off the costs of grid expansion<\/a>\u00a0to American households. Meanwhile, Wall Street executives are investing\u00a0billions into private-debt deals<\/a>.<\/p>\n These firms\u2019 lobbying and campaign contributions are discreetly influencing the trajectory of the AI age, in the midst of a new \u201cdigital gold rush<\/a>.\u201d<\/p>\n With the advent of modern cloud computing and artificial intelligence, the U.S. energy system is undergoing\u00a0changes not seen since post-World War II electrification<\/a>. Modern data centers have facilitated the global explosion of AI,\u00a0housing massive networks of servers<\/a>\u00a0and cooling systems that keep everything from entertainment and communication to business operations running daily.<\/p>\n Data centers have existed for decades, the first dating all the way back to the\u00a0ENIAC mainframe of the 1940s<\/a>. Only 80 years later, data centers have grown into looming,\u00a0warehouse-sized facilities<\/a>\u00a0holding thousands of servers and, in some cases, occupying thousands of acres of farmland. The\u00a0Data Center Map<\/a>\u00a0lists more than 4,100 active data centers in the United States, with most concentrated in Virginia, Texas and California.<\/p>\n Competition over grid access has become a priority for the technology and energy sectors in recent years, and they have turned to the government for assistance. The four largest cloud providers \u2014\u00a0Amazon<\/a>,\u00a0Microsoft<\/a>,\u00a0Google<\/a>\u00a0and\u00a0Meta<\/a>\u00a0\u2014 have reported tens of millions of dollars in federal lobbying expenditures in 2025 alone.<\/p>\n The\u00a0electric manufacturing and equipment sector<\/a>, including firms like Microsoft and Oracle, has\u00a0poured more than $226 million<\/a>\u00a0into lobbying activity in 2025, in part to support the rapid growth of data centers and to address the\u00a0resulting strain on the nation\u2019s power grid<\/a>. The sector is on pace for its biggest lobbying year ever.<\/p>\n Additionally,\u00a053 percent of lobbyists for the electric manufacturing sector<\/a>\u00a0have gone through the\u00a0revolving door<\/a>, meaning they are former government officials and employees who have taken jobs with lobbying firms and private sector organizations that, in some cases, they used to oversee.\u00a0<\/strong>Much of the electrical manufacturing sectors\u2019 policy work focuses on how the costs of expanding power generation and transmission\u00a0will be divided<\/a>\u00a0between consumers, corporations and government.<\/p>\n The number of lobbyists per data center developer has also increased; Meta hired\u00a021 more lobbyists this year<\/a>\u00a0than last year, and OpenAI increased its lobbyist population\u00a0nearly seven-fold<\/a>, reporting three lobbyists in 2023 and 18 lobbyists in 2024. This\u00a0expansion<\/a>\u00a0correlates with the surge in data center construction.<\/p>\n The Data Center Coalition, a trade association representing the interests of data center developers,\u00a0spent $123,000 on lobbying<\/a>\u00a0during the first quarter of 2025 and $125,000 in the second quarter \u2014 and then more than doubled those numbers, spending $360,000 in the third quarter. The\u00a0coalition\u2019s membership includes<\/a>\u00a0many of the tech giants powering the AI revolution, including Amazon, Google, Microsoft and Meta, as well as major infrastructure and data center operators like Stack Infrastructure and Oracle. DCC is\u00a0located in Leesburg, Virginia<\/a>, along what\u2019s known as Data Center Alley, and engages with state and federal officials to promote policies favorable to the industry.<\/p>\n Fossil-fuel companies and investment firms have joined the effort too. The largest electricity\u00a0supplier for Data Center Alley<\/a>, Dominion Energy, has\u00a0lobbied extensively<\/a>, to the tune of\u00a0$2.4 million so far this year<\/a>. BlackRock, one of the world\u2019s largest asset managers, has lobbied for \u201cclean-energy finance\u201d while sponsoring\u00a0Meta\u2019s $27 billion private-debt deal<\/a>\u00a0for a Louisiana data-center complex; this will be the largest private-debt transaction in U.S. history when completed. Blackrock\u2019s\u00a0lobbying expenditures<\/a>\u00a0in the renewable energy sector totaled $60,000 in the first three quarters of 2025.<\/p>\n Google Cloud, Microsoft Azure, Meta and Amazon Web Services are some of the largest data center developers expanding across the country. New projects include OpenAI and Oracle\u2019s\u00a0Stargate project<\/a>, which pledges to generate nearly a gigawatt of AI capacity, and multiple\u00a0commitments<\/a>\u00a0to billion dollar investments in data centers across the country on behalf of Amazon Web Services.\u00a0Advocates say<\/a>\u00a0that this growth strengthens the U.S. digital economy on the global stage, adds manufacturing jobs, and supports a carbon-free energy transition, along with offering other connectivity advantages for both urban and rural areas.<\/p>\n However, the AI boom\u00a0has severely impacted local communities<\/a>; many researchers warn that data centers\u2019 massive water and energy demands are consuming power and\u00a0straining local resources<\/a>\u00a0at alarming rates. Consulting firm ICF\u00a0estimates<\/a>\u00a0that to meet the combined demand of AI, cloud computing and electrification, the U.S. would need to add 80 gigawatts of new generation capacity each year, though it currently produces around 65. Data centers\u00a0consumed 183 terawatt-hours of electricity in 2024<\/a>, over 4 percent of the nation\u2019s total, which is close to Pakistan\u2019s\u00a0entire annual demand<\/a>. By 2030, that figure could more than\u00a0double<\/a>.<\/p>\n Because data centers are typically\u00a0geographically concentrated<\/a>, their power draw has been overwhelming local grids. In 2023, data centers accounted for\u00a026 percent of total electricity use<\/a>\u00a0in Virginia; the state Data Center Alley houses more than\u00a0200 data centers<\/a>. Cooling data center equipment also introduces\u00a0a myriad of challenges<\/a>. Data centers rely heavily on water to manage the heat generated by the equipment, and this water is often drawn from local freshwater supplies. With only\u00a00.5 prcent of Earth\u2019s water safe for human use<\/a>, so withdrawals like these become a sustainability concern.<\/p>\n Meanwhile, electricity costs in regions dense with data centers have surged up to\u00a0267 percent higher<\/a>\u00a0than five years ago. Roughly two-thirds of U.S. electricity flows through state or regional grids, meaning wholesale price increases ripple outward, even to households hundreds of miles away and in different state jurisdictions.<\/p>\n Despite their large footprint,\u00a0no legally binding energy standards<\/a>\u00a0are currently in place to oversee private-sector data center construction and management. The Department of Energy only offers voluntary guidance and certifications like\u00a0Energy Star<\/a>\u00a0(a program that has been placed on the chopping block\u00a0by the Trump administration<\/a>). Even so, promises of tech investment, economic growth, and expansion of state infrastructure that could come with data centers have become\u00a0particularly enticing<\/a>\u00a0to more financially distressed states.<\/p>\n State and local governments have worked to draw in data center developers with\u00a0tax breaks and incentives<\/a>, including sales tax exemptions on equipment and energy. Incentives are offered\u00a0across the political spectrum<\/a>, with each state extending different incentive durations, investment thresholds, and measures of power capacities.\u00a0An analysis by CNBC<\/a>\u00a0concluded that 42 states offer full or partial sales tax exemptions to data centers, and only Illinois, Nevada, Missouri and Washington collect information about funding per recipient. The analysis also found that a singular Microsoft data center in Illinois only created 20 permanent jobs, despite receiving $38 million in sales tax exemptions.<\/p>\n Experts have found that these hundreds of millions of dollars in tax revenue have been exchanged for asymmetrical payoffs; data centers do not need a large workforce and therefore\u00a0have not contributed to significant job growth<\/a>, have incredibly\u00a0short life spans<\/a>, and have been associated with\u00a0cases of harmful air pollutants<\/a>\u00a0including nitrous oxides.<\/p>\n President Donald Trump has incorporated the growth of AI and data centers to his broader agenda of achieving U.S. energy dominance. In January he declared a\u00a0national energy emergency<\/a>\u00a0in an attempt to speed up domestic production of oil, gas, nuclear and geothermal resources. Subsequent\u00a0executive orders<\/a>\u00a0instructed federal agencies to accelerate the buildout of data centers by supporting their infrastructure, and by easing and streamlining \u201cregulatory burdens.\u201d<\/p>\n<\/div>\nLobbying for growth<\/h2>\n
Hidden costs of data centers<\/h2>\n
Policy responses<\/h2>\n
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