16 States Consider Restrictions as Texas Takes Center Stage
After the US midterm election results were announced, Democrats made gains in several key states, making AI data center construction a focus of politics and investment markets. Some newly elected governors advocate pausing or raising the threshold for data center construction. The market worries that US AI infrastructure expansion will slow, hitting AI servers, semiconductors and related equipment supply chains.
According to CNBC, Reuters and the Associated Press, local residents are concerned about the rapidly rising electricity and water demand of large data centers, whether they will push up electricity prices, crowd out water resources, and affect the environment and quality of life. Data from the National Conference of State Legislatures in September shows that 16 states are already considering restricting data center development, including California, New York, Georgia, Michigan and Virginia, in the form of construction moratoriums or stricter reviews.
Rules Tighten Everywhere as Operators May Turn Overseas
Among them, California has set rules on data center electricity and water disclosure and grid infrastructure costs; New York has imposed a one-year moratorium on large data centers to develop environmental and power supply standards; Massachusetts requires data centers to obtain local consent and to bear the cost of clean energy supply or related power Powertech costs.
Texas is the focus of market attention. With its land, energy supply and relatively business-friendly operating environment, Texas has long attracted tech giants, accounting for about 25% of planned US data center capacity, with Meta, Google and Microsoft all deployed there. Democratic Texas governor-elect Hinojosa advocates pausing new data center approvals until regulations protecting residents are established. Arm CEO Rene Haas said in a CNBC interview on November 5 that if some states raise thresholds, operators can move to other states, but if the US as a whole slows down, other countries are ready to take over, China is not slowing AI development, and Western countries will continue to invest. Analyst Guo Zherong believes the market is overstating Texas policy risk. Even if some areas refuse construction, operators still have other options, construction costs could be lower, and AI computing demand will not disappear. Northern Europe, with relatively abundant low-cost low-carbon power, lower cooling needs and land availability, and Johor, Malaysia, benefiting from land and power supply constraints in Singapore, have become expansion options.