About this Resource
We've compiled a comprehensive resource that brings together key insights on state data center policy to help you navigate this complex and rapidly evolving landscape — including key terms, 2025 legislative trends, and more.
Why Data Center Policy Matters
Data centers, which have long been the backbone of internet infrastructure, have increasingly captured the attention of lawmakers. This is due in large part to the proliferation of artificial intelligence (AI), which requires substantial processing power and a more urgent need for data centers. Data centers use large amounts of energy and rely on backup generators in the event of a power outage. This has prompted policymakers to consider how to provide sufficient electricity to data centers while minimizing the impact on residential customers.
Subscribe to Policy Watch: Data Centers
Data centers are impacted by a wide variety of state policy issues, often sitting at the intersection between energy, environmental issues, zoning, and taxation. As such, it's difficult to be an expert in all of the issue areas. Our newest subscription, Policy Watch: Data Centers, will help government relations professionals make sense of the evolving policy landscape around data centers by summarizing major legislative trends, sharing deep dives on key issues, and offering a landing page for quick reference to previously covered topics, all from MultiState’s seasoned policy experts. As these debates continue into 2026 and beyond, staying informed about legislative trends and regulatory developments will be critical for anyone working in this space. Reach out to our team to learn more or subscribe.
Key Takeaways
- State lawmakers are increasingly focused on data center policy as AI drives demand for more processing power, with over 40 states considering 267 related bills in 2025 alone.
- Energy concerns dominated legislative activity, with 126 bills addressing power usage and grid impacts. South Carolina and Maryland enacted laws allowing utilities to negotiate special rates with large customers while protecting other ratepayers from cost increases.
- Virginia remains the global data center hub, processing 70% of world internet traffic, but faces growing resident concerns. Democrats' recent electoral gains and incoming Governor Spanberger suggest more aggressive regulation ahead.
- Water usage and tax incentives also drew attention, with 16 states considering water-related bills and 32 states introducing tax legislation. Minnesota now requires separate water permits for data centers while Kentucky created tiered investment requirements.