Republicans Should Appreciate How Data Centers Deliver on Their Priorities
The Republican Party can embrace American technological dominance, or it can embrace the growing alarmism around America’s data center and artificial intelligence (AI) buildout. It cannot do both.
R Street highlighted the clash between pro-development Democrats and anti-market, left-wing populists in a recent analysis titled “Abundance Democrats Have a Data Center Problem.” While the growing anti-tech fervor within their party has not yet fully captured the GOP, some Republicans are beginning to use data centers as a political punching bag.
This was on display last month when Florida Gov. Ron DeSantis, in reference to data centers, posted on X: “Superintelligence factories = surveillance centers.” It’s not the first time the outgoing Florida governor has been critical of data center construction. DeSantis proposed one of the most stringent policies on data center projects in the country last December before signing SB 484 into law in May 2026.
Reducing the debate around data centers to a single use case is particularly flawed and misguided. Telephones and the internet can be used for surveillance too, but the solution is to limit the powers of Big Government to spy on us, not to ban those technologies. Not only does the compute capacity housed by data centers power everything AI makes possible—from your conversation with ChatGPT to the AI-powered advances in weather forecasting and cancer treatments—it also drives online commerce, communication, and entertainment.
Another Republican lawmaker who has made misguided arguments against data centers is Texas Gov. Greg Abbott, who recently announced a temporary moratorium on data center construction in the state until an “electricity audit” is completed. Hostility is growing among some Republicans in Washington, D.C. as well, with Missouri Sen. Josh Hawley calling for “no more data centers” without a commitment from the companies building them that they will run on their own power supplies.
While technology companies should be thoughtful and transparent in addressing the community impact of data center projects, the current backlash borders on a techno-panic and could have dangerous ramifications for this critical sector—as well as for national security. After all, robust and growing compute infrastructure is necessary to meet America’s industry needs and maintain its global competitive edge. Plus, most concerns around grid costs and capacity are better answered with innovation than with restriction.
At a time when politicians are asking companies to reshore jobs and reinvest in the American economy at the national and local levels, data center providers are delivering the goods. According to The Wall Street Journal, the AI and data center buildout “is on track to become the biggest economic bet in U.S. history, dwarfing the investments made to fund other huge U.S. infrastructure projects such as the railroads, the highway system and the plumbing for the internet.” A new Brookings Institution study projects that data centers and AI infrastructure spending will total $10.3 trillion from 2025 to 2032, a staggering 3.6 percent of gross domestic product each year. Experts refer to it as “a massive private sector stimulus program” that is powering the current economy and growth. Republicans in particular should appreciate how the private sector has been creating unprecedented investment in communities, powering construction jobs, and building out critical national infrastructure.
The benefits to local communities have been substantial. In Henrico County, Virginia, unbudgeted data center revenues are funding a $60 million affordable homeownership trust. In Indiana, revenue paid for by “large customers, including data centers” is driving a $79 million annual reduction in ratepayer power bills. And a new study projects that data center investment in Illinois over the next decade could create more than 120,000 jobs.
While President Trump has taken action to make tech companies address power concerns, his approach has been largely different from what some critics propose. In unveiling its Ratepayer Protection Pledge, the Trump administration is taking what it calls a “Building, Bringing, or Buying” approach to how data centers get power. In short, instead of treating things like electricity grid considerations as a reason to pause or delay essential infrastructure, this approach encourages private-sector innovation to solve these issues without derailing innovation and investment. Federal encouragement of competition is good, but it bears repeating that data centers (and other customers) in many states can’t access competitive generation.
House Speaker Mike Johnson has taken a similar approach, calling a federal data center moratorium a “dangerous prospect.” Johnson also backed the congressional version of the Ratepayer Protection Pledge that passed the House in September. Both Trump and Johnson have stressed the geopolitical stakes if the United States falls behind China in the global AI race. “We cannot have a moratorium on the development of AI,” Johnson said last month, “because then we will lose our edge to China, and that has serious national security implications for every American family.” Likewise, President Trump has argued that “Whoever wins AI, WINS!” Not only is China scaling up data center investment fast, but a recent Institute for Progress report estimates that America now has just about a six-and-a-half-month lead over China.
Still, even the administration’s position is evolving, with Trump posting just last week: “New and large, in some cases gigantic, Data Centers are mandated by me to make their own electricity, and give or sell any excess back to the local community, or grid, and therefore there is electric price increase. In fact, there could be a substantial decrease.” He also urged the companies behind data center projects to pay individuals or communities a “dividend” in an effort to make the projects more popular.
It remains unclear how binding any of the president’s suggestions will be. Nevertheless, ideas like this dividend proposal risk seeing state and local lawmakers attempt to draw as much cash as possible from an industry in exchange for political favors instead of working in good faith to negotiate a fair and transparent agreement for their communities.
The debate around how data centers will be powered is warranted. Estimates suggest that data center power demand could increase from 31 gigawatts (GW) in 2025 to 66 GW in 2027. And even beyond data centers, increasing U.S. power demand isn’t going anywhere, with electricity demand for industrial purposes projected to grow by roughly 40 GW by 2030. Will lawmakers run from the infrastructure necessary for the future of American growth whenever there are concerns about grid constraints, or will they embrace private-sector innovation to meet America’s growing energy needs?
Demonstrating how quickly expectations are evolving, a recent BloombergNEF outlook revised its 2030 forecast of installed U.S. data center capacity upward by 52 percent. It helps to recall that the estimated value of data center projects breaking ground from January to August 2025 was $40 billion. That value jumped to $98.5 billion over the same period in 2026, representing an approximate 146 percent increase. With this explosion in demand, the impacts of this compute buildout will last decades.
When electricity first began to go mainstream, the United States didn’t decide to prevent electric lighting, industrial machinery, and refrigeration from transforming American life over capacity fears. Instead, the country used innovation to determine how best to meet skyrocketing demand.
Private-sector innovation is already working to ensure this happens for the data center buildout. For example, AI-energy management company Emerald AI is reducing grid strain by strategically adjusting computing workloads during periods of high power demand. In a test involving 256 NVIDIA chips at a hyperscale data center in Phoenix, Arizona, Emerald AI’s software reduced power usage by 25 percent for three hours during peak demand.
Microsoft is embracing closed-loop cooling systems that enable recyclable water use. With over 90 percent of its Wisconsin-based Fairwater AI data center capacity already using the technology, the company estimates that it could save roughly 33 million gallons annually per data center compared to traditional cooling systems. Microsoft also reports a nearly 80 percent reduction in water-use effectiveness across all of its data center operations from the early 2000s to 2025. And now Amazon says it is 75 percent of the way toward its goal of being “water positive” for communities across its data centers by 2030. Thanks to this innovation and competition, the benefits for communities extend far beyond water conservation.
While necessary to maintain our technological edge, America’s data center buildout will undoubtedly require continuous adjustment to meet its growing needs. As Republicans consider responses, they should reject solutions driven by fear, red tape, and bans. Ongoing American innovation is the key to unlocking the private sector’s ability to power and win this crucial global technological revolution.