State Legislatures Unite on AI Regulation and Data Center Oversight

Unlike the deep partisan divides gripping Congress, state legislatures across the United States are finding common ground on two significant issues: regulating artificial intelligence (AI) and overseeing the growth of electricity-intensive data centers. This unexpected alignment is driven by concerns over consumer protection, grid stability, and the potential impact on local communities.

AI Regulation Gains Bipartisan Support

Governors from both sides of the political spectrum, including Ron DeSantis of Florida and Kathy Hochul of New York, are championing legislation to rein in AI. DeSantis is backing Florida’s Artificial Intelligence Bill of Rights, which aims to protect individuals from the unauthorized apply of their name, image, or likeness. The bill also requires parental consent for minors engaging with AI chatbots and mandates that bots disclose their non-human nature .

“I really fear that if this is not addressed in an intelligent and proper way, you know, it could set off an age of darkness and deceit,” DeSantis stated when proposing the bill package.

New York already requires chatbots to identify themselves as non-human and Hochul is pushing for further limitations, including a ban on chatbots within social media apps for users under 18.

Despite a Trump administration executive order attempting to prevent state-level AI regulation, nearly every state now has a proposal under consideration. These proposals range from requiring human oversight of AI-driven employment decisions to preventing discriminatory AI surveillance practices.

Data Center Growth Faces Increased Scrutiny

The increasing demand for AI is fueling a surge in data center construction, raising concerns about electricity and water consumption. Lawmakers in Florida are examining the potential strain on the power grid and the possibility of increased utility costs for residents . DeSantis has expressed skepticism about the promised economic benefits of data centers, questioning claims of significant job creation or property tax reductions.

South Dakota is seeking to ensure local governments retain the ability to regulate data centers, while Oklahoma is considering bills to mitigate the impact of data center expansion.

President Trump has generally supported data center growth but emphasized the need for tech companies to bear the costs of their power needs, stating, “We’re telling the major tech companies that they have the obligation to provide for their own power needs; they can build their own power plants as part of their factory.”

Lawmakers in both New York and Maine are proposing temporary bans on new data centers, while New York’s Public Service Commission will review the issue to ensure fair contributions from data centers. Colorado is considering a requirement for data centers to utilize renewable energy sources, and states across the political spectrum are exploring expanding nuclear energy capacity to support AI’s growing power demands.

Tech Industry Pushback and Housing Concerns

Tech companies are actively opposing these regulatory efforts, arguing that a patchwork of state laws would stifle innovation. They are also investing in political campaigns to influence the debate.

Beyond AI and data centers, state legislatures are also addressing the nationwide housing crisis. In Florida, a bipartisan bill to ease restrictions on accessory dwelling units has gained support. DeSantis aims to address affordable housing by cutting property taxes, a proposal met with reservations from Democrats who favor decreasing property insurance rates.

New York and other states are working to streamline environmental regulations, and numerous states are considering proposals to cut building regulations, strengthen tenant rights, and improve rental housing conditions.