America cannot afford a war on data centers

OPINION:

America is flirting with an extraordinarily stupid idea: shutting down construction of the very infrastructure on which our economy increasingly depends.

After last week’s elections, in which dozens of communities voted to restrict data center development, calls for a nationwide moratorium have grown louder. Sen. Bernard Sanders, Vermont independent, is again demanding that Congress halt construction of new artificial intelligence data centers, citing those local results.

Think about what this means: Washington would tell communities willing to welcome billions of dollars in private investment that their opportunity to create jobs and compete for tomorrow’s industries must take a back seat to a sweeping national prohibition.

It is economic self-sabotage masquerading as responsible government.

Data centers are not some passing technological fad. They underpin banking, healthcare, telecommunications, national defense, manufacturing and artificial intelligence. Nearly every industry that expects to compete in this century depends on expanding digital infrastructure. You cannot build an increasingly digital economy while declaring war on the facilities required to operate it.

The economic stakes should be impossible to ignore. A 2026 PwC study commissioned by the Data Center Coalition estimated that the industry supported approximately 5.5 million American jobs in 2024, contributed $927 billion to the gross domestic product and generated $204 billion in federal, state and local tax revenue. Those figures include jobs well beyond the facilities themselves.

The electrician installing high-voltage equipment in Kentucky has a stake in this industry. So does the construction worker pouring concrete in Virginia, the manufacturer building transformers in North Carolina and the engineer designing cooling systems in Texas.

Consider the investment behind those paychecks. Census Bureau data analyzed by Our World in Data shows that data center construction spending reached $4.4 billion in June alone. In western Kentucky, the Department of Energy announced a proposed development exceeding $100 billion at the former Paducah uranium enrichment site. It is expected to support 8,000 construction jobs and 600 permanent positions.

It takes remarkable political shortsightedness to look at this investment and conclude that America is building too much.

The stock market is already showing how costly uncertainty can become. After the midterms, data center companies sold off as investors weighed the possibility of tougher restrictions. On Wednesday, the broader market rallied even as infrastructure stocks declined; by Thursday morning, Micron had fallen 17.5%.

These stock losses also reflect concerns about AI spending and valuations, but political risk adds to the pressure. UBS analysts estimate that potential construction pauses could put roughly 30% of planned U.S. data center capacity additions in 2028 at risk.

Investors do not need Congress to enact a ban before changing their plans. Unpredictable permitting and delayed projects can redirect capital, with consequences for manufacturers, retirement accounts and communities expecting new tax revenue.

I have worked on data center development issues, and I know that concerns about electricity rates, water consumption, noise and land use are real. Some developers overpromise, some projects are poorly located and some local governments are right to reject deals that shift costs to residents. Nobody deserves a blank check simply because they arrive with a billion-dollar proposal.

Still, there is an enormous difference between holding developers accountable and declaring that new facilities should not be built anywhere in America.

The local measures on ballots were not all moratoriums. Some addressed zoning, voter approval or electricity consumption. Voters have every right to decide what belongs in their communities. Their decisions do not justify denying that same choice to places that want these projects.

If electricity costs are the concern, make developers pay their share of new generation and grid upgrades rather than dumping the bill onto households. If water is scarce, require efficient cooling and enforceable consumption limits. Where noise or land use creates conflicts, impose reasonable setbacks and operating standards. If tax incentives offer taxpayers bad deals, reject them.

That is responsible development. A nationwide moratorium, on the other hand, substitutes Washington’s judgment for local circumstances without solving the underlying problems.

Lawrence Berkeley National Laboratory projects that data centers could account for 9.5% to 15.3% of U.S. electricity consumption by 2030. Meeting that demand will require new generation, modernized transmission and better planning, not a government response that makes essential infrastructure harder to build.

Meanwhile, the rest of the world will not be taking a timeout. Countries competing with America for AI, advanced manufacturing and computing capacity will keep courting investment and expanding energy infrastructure. We have spent decades lamenting lost industrial jobs and demanding that investment come home. Now, just as new infrastructure attracts billions of dollars, some politicians want to slam the door.

Americans deserve affordable electricity, clean water, responsible development and a meaningful voice in what gets built near their homes. They also deserve the jobs and economic opportunities that data centers can bring. These aims are not mutually exclusive, and Congress should safeguard both rather than force communities to choose.

You cannot protect American prosperity by strangling the industries that sustain it, and you cannot lead tomorrow’s economy by refusing to build the infrastructure it requires.

America cannot ban its way into the future.

• Colton Overcash is the founder of Vertex Strategies. He previously held two political appointments at the U.S. Department of Homeland Security and is a former congressional staffer.