From the farmlands of Northern Virginia to the industrial parks of New Jersey, massive new data centers are popping up across the country to power America’s artificial intelligence revolution. The energy needed to power these data centers is driving national energy usage to record levels, and these costs are falling on American households as soaring electricity consumption has translated into higher home utility bills, as well as health and environmental risks.
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 campaigning for faster approvals and weaker regulatory roadblocks; utilities are working to pass off the costs of grid expansion to American households. Meanwhile, Wall Street executives are investing billions into private-debt deals.
These firms’ lobbying and campaign contributions are discreetly influencing the trajectory of the AI age, in the midst of a new “digital gold rush.”
Lobbying for growth
With the advent of modern cloud computing and artificial intelligence, the U.S. energy system is undergoing changes not seen since post-World War II electrification. Modern data centers have facilitated the global explosion of AI, housing massive networks of servers and cooling systems that keep everything from entertainment and communication to business operations running daily.
Data centers have existed for decades, the first dating all the way back to the ENIAC mainframe of the 1940s. Only 80 years later, data centers have grown into looming, warehouse-sized facilities holding thousands of servers and, in some cases, occupying thousands of acres of farmland. The Data Center Map lists more than 4,100 active data centers in the United States, with most concentrated in Virginia, Texas and California.
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 — Amazon, Microsoft, Google and Meta — have reported tens of millions of dollars in federal lobbying expenditures in 2025 alone.
The electric manufacturing and equipment sector, including firms like Microsoft and Oracle, has poured more than $226 million into lobbying activity in 2025, in part to support the rapid growth of data centers and to address the resulting strain on the nation’s power grid. The sector is on pace for its biggest lobbying year ever.
Additionally, 53 percent of lobbyists for the electric manufacturing sector have gone through the revolving door, 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. Much of the electrical manufacturing sectors’ policy work focuses on how the costs of expanding power generation and transmission will be divided between consumers, corporations and government.
The number of lobbyists per data center developer has also increased; Meta hired 21 more lobbyists this year than last year, and OpenAI increased its lobbyist population nearly seven-fold, reporting three lobbyists in 2023 and 18 lobbyists in 2024. This expansion correlates with the surge in data center construction.
The Data Center Coalition, a trade association representing the interests of data center developers, spent $123,000 on lobbying during the first quarter of 2025 and $125,000 in the second quarter — and then more than doubled those numbers, spending $360,000 in the third quarter. The coalition’s membership includes many 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 located in Leesburg, Virginia, along what’s known as Data Center Alley, and engages with state and federal officials to promote policies favorable to the industry.
Fossil-fuel companies and investment firms have joined the effort too. The largest electricity supplier for Data Center Alley, Dominion Energy, has lobbied extensively, to the tune of $2.4 million so far this year. BlackRock, one of the world’s largest asset managers, has lobbied for “clean-energy finance” while sponsoring Meta’s $27 billion private-debt deal for a Louisiana data-center complex; this will be the largest private-debt transaction in U.S. history when completed. Blackrock’s lobbying expenditures in the renewable energy sector totaled $60,000 in the first three quarters of 2025.
Hidden costs of data centers
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’s Stargate project, which pledges to generate nearly a gigawatt of AI capacity, and multiple commitments to billion dollar investments in data centers across the country on behalf of Amazon Web Services. Advocates say that 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.
However, the AI boom has severely impacted local communities; many researchers warn that data centers’ massive water and energy demands are consuming power and straining local resources at alarming rates. Consulting firm ICF estimates that 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 consumed 183 terawatt-hours of electricity in 2024, over 4 percent of the nation’s total, which is close to Pakistan’s entire annual demand. By 2030, that figure could more than double.
Because data centers are typically geographically concentrated, their power draw has been overwhelming local grids. In 2023, data centers accounted for 26 percent of total electricity use in Virginia; the state Data Center Alley houses more than 200 data centers. Cooling data center equipment also introduces a myriad of challenges. 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 0.5 prcent of Earth’s water safe for human use, so withdrawals like these become a sustainability concern.
Meanwhile, electricity costs in regions dense with data centers have surged up to 267 percent higher than 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.
Policy responses
Despite their large footprint, no legally binding energy standards are currently in place to oversee private-sector data center construction and management. The Department of Energy only offers voluntary guidance and certifications like Energy Star (a program that has been placed on the chopping block by the Trump administration). Even so, promises of tech investment, economic growth, and expansion of state infrastructure that could come with data centers have become particularly enticing to more financially distressed states.
State and local governments have worked to draw in data center developers with tax breaks and incentives, including sales tax exemptions on equipment and energy. Incentives are offered across the political spectrum, with each state extending different incentive durations, investment thresholds, and measures of power capacities. An analysis by CNBC concluded 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.
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 have not contributed to significant job growth, have incredibly short life spans, and have been associated with cases of harmful air pollutants including nitrous oxides.
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 national energy emergency in an attempt to speed up domestic production of oil, gas, nuclear and geothermal resources. Subsequent executive orders instructed federal agencies to accelerate the buildout of data centers by supporting their infrastructure, and by easing and streamlining “regulatory burdens.”
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