The expansion of data centers across the United States is encountering growing resistance amid upcoming local and state elections, creating uncertainty for developers and investors in the industry. More than 40 local ballot initiatives, multiple gubernatorial campaigns, and several legislative races are set to influence regulations governing data-center approvals and tax incentives, potentially reshaping the sector’s growth trajectory.
Recent developments illustrate the heightened scrutiny. In Nashville, Tennessee, a moratorium enacted in the summer halted new data-center projects through December, prompting developer Metrobloks to withdraw from a planned build. Similar actions have emerged nationwide, with Oregon among the latest states to ban new project approvals. One city there declared a state of emergency over the threat the moratorium posed to its economic future. The industry, whose projects are valued at hundreds of billions of dollars, now faces increasing uncertainty amid community concerns over environmental and economic impacts.
Texas, a major data-center hub, has become a focal point in the governor’s race. Democrat Gina Hinojosa has pledged a full ban on new approvals until legislation is enacted to protect local communities from the facilities’ power and water demands, criticizing incumbent Republican Governor Greg Abbott’s existing pause on approvals as insufficient. The debate extends to the closely contested U.S. Senate race, where Democrat James Talarico accuses Republican Attorney General Ken Paxton of favoring the data-center industry through campaign contributions and supporting tax exemptions. Paxton has responded by affirming his backing of Abbott’s restrictions and commitment to ensuring residents do not bear the financial burden of development.
Ohio is also re-evaluating its data-center policies amid mounting local opposition. Over 20 ballot initiatives across the state call for restricting new projects. Both gubernatorial candidates, Democrat Amy Acton and Republican Vivek Ramaswamy, have endorsed stricter controls, with Acton proposing bans on projects lacking community cost coverage and public negotiations, while Ramaswamy supports a moratorium pending legislation requiring facilities to provide free power to locals and pay full property taxes. The U.S. Senate race in Ohio reflects similar tensions, with Democrat Sherrod Brown demanding greater transparency, the end of tax exemptions, and enhanced local control, contrasted with Republican Jon Husted’s stance favoring balanced economic development and ensuring technology companies pay their fair share.
In Michigan, both gubernatorial candidates advocate for tighter regulation of data centers, though approaches differ. Democrat Jocelyn Benson supports stronger restrictions, while Republican John James emphasizes empowering local decision-making. Meanwhile, Senate candidate Abdul El-Sayed has called for a federal ban on new data centers and stringent oversight of artificial intelligence applications tied to the industry, underscoring concerns over cybersecurity and community impacts.
Georgia’s booming data-center market faces political debate as well. Democratic candidate Keisha Lance Bottoms calls for a pause on new projects to assess resource usage and tax policies, challenging incumbent Republican Governor Brian Kemp’s pro-development position. Billionaire GOP candidate Rick Jackson has defended his investments in data centers and advocated for state-level guardrails combined with local approval authority.
The industry’s future growth appears increasingly contingent on election outcomes and the ability of policymakers to balance economic incentives with community and environmental considerations. Developers and investors remain cautious as moratoriums and regulatory shifts inject uncertainty into what has been a rapid and expansive sector.