New York proposes $1 million per megawatt community investment for data centers

The expansion of data centers in the United States is driving up power demand and electricity bills in large swaths of the country, drawing local and bipartisan political backlash.

Texas Governor Greg Abbott, a Republican leading one of the world's fastest-growing regions for artificial intelligence infrastructure, directed state regulators on Monday to penalize data centers that fail to disclose details about their water consumption.

Only one in three Americans approve of the fast pace of data center construction and most would oppose building one in their own community, according to a recent Reuters/Ipsos poll.

Republican lawmakers in the U.S. House of Representatives plan to bring legislation that seeks to rein in electricity bill increases tied to data center expansion, according to a spokesperson for House Speaker Mike Johnson.

Legislatures in dozens of U.S. states have introduced similar bills.

Spokespeople from Amazon, Meta and Alphabet's Google, among the world's largest data center developers, did not immediately respond to requests for comment. Microsoft declined to comment.

"The innovation economy's growing demand for data centers must be matched by shared standards that ensure communities benefit," Empire State Development President Hope Knight said in a statement.

"Because data centers are not major local job generators, their economic development profile differs from traditional manufacturing."

New York Governor Kathy Hochul is recommending that local governments seek community investments of at least from developers proposing new data centers, according to a document released on Tuesday.