Democratic Socialist Sen. Bernie Sanders and right-wing Gov. Ron DeSantis have agreed on virtually nothing. But this year, they found common ground as leading skeptics of the artificial intelligence industry’s data center boom.
The juxtaposition of the numbers from two countries to the left indicates a political reckoning over the AI industry’s impact on power prices, grid stability, and labor markets. If opposition parties reach a broad bipartisan agreement, plans to develop the industry could be delayed.
I-VT’s Sanders called for a nationwide moratorium on data center construction.
“Frankly, I think we need to slow this process down,” Sanders told CNN in a Dec. 28 interview. “For the oligarchy, it’s not enough to just tell us it’s coming. You adapt. What are they saying? Are they going to guarantee health care for all people? What are they going to do if people lose their jobs?”
On December 4th, Florida Governor DeSantis announced an AI Bill of Rights that protects local communities’ rights to block data center construction. A stubborn Republican proposal could clash with the White House, which is pushing for rapid expansion of AI. On December 11, President Donald Trump issued an executive order to prevent “excessive state regulation” of AI.
“Our power grid is limited, and we don’t have enough grid capacity in the United States to do what they’re trying to do,” DeSantis said of the AI industry’s data center plans at an event in The Villages, Florida.
“With more and more information coming out, do we want to put a hyperscale data center in The Villages? Yes and no,” the governor asked. I think most people would say they don’t need it.
DeSantis is coming to the end of his second term as Florida governor, but his future political ambitions are unclear. Sanders said his fourth term as Vermont senator will likely be his last.
Florida and Vermont are not major data center states. But rising utility costs played a key role in Democrat Abigail Spanberger’s landslide victory in this year’s gubernatorial election in Virginia, the world’s largest data center market.
According to the Federal Energy Information Administration, average household electricity prices nationwide are expected to rise by about 5% in 2025 and another 4% in 2026.
With the cost of living at the center of American politics, the impact data centers have on local communities is likely to influence next November’s midterm elections.
“We’ve gone from a time when data centers were seen as some sort of unmitigated asset and an engine of growth to many elected officials and policymakers to now realize that there is a shortage of data centers,” said Abe Silverman, who served as general counsel for the New Jersey Public Utilities Commission from 2019 to 2023 under Democratic Gov. Phil Murphy.
“We don’t have enough power generation to reliably serve our existing customers and data centers,” Silverman said.
The biggest grid crisis
The shortage is most acute in the PJM Interconnection, the nation’s largest power grid, where demand for data centers has pushed the system to a tipping point. According to PJM, grid reliability requirements will fall by 6 gigawatts by 2027.
Silverman said the power shortage is roughly equivalent to Philadelphia’s electricity needs. This increases the likelihood of power outages, he said. “Power outages will not occur once every 10 years, but will occur more frequently,” the analyst said.
“We’re in a crisis phase right now. PJM has never been this cash-strapped,” said Joe Bowling, president of Monitoring Analytics, PJM’s independent market monitor.
PJM Interconnection serves more than 65 million people in 13 Mid-Atlantic and Midwest states. It also includes battleground states such as Pennsylvania and Virginia, which will be crucial in the midterm elections.
The cost of securing PJM’s power capacity has exploded in recent years, with data centers attributable to $23 billion, according to watchdog Monitoring Analytics. Those costs are ultimately passed on to consumers. This amounts to a “huge wealth transfer,” the watchdog group told PJM in a letter in November.
“I don’t think the political fallout is over yet,” said Rob Gramlich, president of power sector consulting firm Grid Strategies.
“And there will be a lot more impact in 2026 because there will be a lot more elections than in 2025,” Gramlich said. “Any politician will say they have the answer to affordability and that their opponent’s policies will raise interest rates.”
Silverman said the shortage will be further exacerbated by President Trump’s recent decision to suspend all offshore wind farms under construction off the East Coast. This includes Coastal Virginia Offshore Wind, a massive 2.6 gigawatt project that will help feed Northern Virginia’s huge data center market.
“Canceling a project that was intended to be operational in the very near future would directly increase the electricity prices we all pay, rather than incrementally,” Silverman said. “This is a very large additional hole that we’re going to have to dig.”
Data centers are currently facing backlash on a number of fronts. The PJM watchdog has called for data centers that lack the capacity to serve the grid to be rejected or required to install in-house power generation. Virginia’s utility regulators are now requiring data centers to pay for the majority of the cost of new transmission and generation that will be in service starting in 2027.
Brian Fitzsimmons, CEO of GridUnity, which provides software to help utilities meet connectivity demands, said data center developers next year are likely to start building more on-site power plants, known as colocation, as they struggle to quickly secure supply on the grid.
But Silverman said “colocation” also faces problems from political scrutiny.
“Colocation effectively takes generators out of the market,” he said. “It would be unethical to end up in a situation where data centers could buy private power plants, exposing the rest of the population to the possibility of greater power outages.”
