Amidst Boom, Data Center Lobby Expands Its Influence, Spending, and Tactics

This article is part of the project "The Invisible Hand of Big Tech," led by Agência Pública and El Centro Latinoamericano de Investigación Periodística (CLIP), with the participation of 15 other organizations — including Tech Policy Press — from 13 countries. Read more about the project and find other articles in the series here.

Demand for computing power is fueling a massive surge in investment in data centers worldwide. McKinsey, a consultancy, estimates investment in data centers will reach $6.7 trillion by 2030. Recent industry estimates suggest that more than $1 trillion will be invested in the United States over the next five years. The scale of capital expenditures is evidenced by projects such as the massive Stargate initiative announced by President Donald Trump at the White House alongside executives from OpenAI, Oracle, and Softbank the day after his inauguration, and subsequent multibillion-dollar announcements by tech firms including Microsoft, Amazon, Meta, and Google in recent months.

As the boom expands, public scrutiny of industry plans and promises is increasing across the country. Concerns over environmental impacts, demands on energy infrastructure, and other economic and social justice considerations are increasingly the subject of contentious debate at the state and local levels. Technology firms and data center developers face a thicket of zoning, utility, and taxation questions, some of which are the subject of new regulations and legislation.

In the US, one industry group is increasingly at the center of these policy debates, an investigation led by Agência Pública and the Centro Latino-americano de Investigação Jornalística (CLIP), with Tech Policy Press, has found. As the stakes in the fight over data centers increase, the Data Center Coalition is spending more money on behalf of its corporate members to lobby governments and public entities. And, it is engaging in new tactics to shift perceptions of the industry among key constituencies, including legislators and the public.

The Data Center Coalition: growing alongside the industry

Founded in 2019, the Data Center Coalition (DCC) is a member association that bills itself as “the voice” for the data center industry. Its members include the major technology firms driving the AI boom, such as Amazon, Google, Microsoft, and Meta, as well as data center operators and related infrastructure service providers, including Stack Infrastructure, Digital Realty, Coreweave, and Oracle. Located in Leesburg, Virginia, a town in Loudoun County—known as “Data Center Alley” for its massive concentration of more than 200 data centers—the DCC advocates for its members at multiple levels of government.

Tax filings indicate that the organization is growing. It claimed over $2.5 million in revenue in its 2023 tax filing, up from $582,558 the prior year. In a statement, Levi told Tech Policy Press that the organization now has 15 full-time staff. Evidence of its efforts is emerging across the country, particularly on issues related to tax incentives and energy infrastructure. For instance, in recent months, the DCC’s President, Josh Levi, testified in a US Congressional hearing on the economics of AI and data center power consumption, penned a guest column in an Ohio newspaper proclaiming the economic benefits of data centers to the state, and made an appearance at a local Board of County Commissioners meeting in Calvert, Maryland, to discuss, among other things, the potential for local tax revenues from data centers. In Mississippi, Levi told a local newspaper that there is little downside to data center investment. “From my perspective, there aren't any negatives,” he told Jackson’s Clarion Ledger.

In Pennsylvania, the DCC’s director of energy policy testified before the state’s Public Utility Commission about the promise of data centers. In Georgia, the DCC opposed legislation that would have halted tax incentives for data centers in the state, urging the Governor to veto it, which he ultimately did. In Ohio, the coalition urged the Ohio Power Siting Board not to change rules that it said would “delay project approvals and unduly drive up costs.” In Texas, the DCC hired lobbyists as the state considered legislation related to the energy demands of data centers. Records indicate the coalition is active in various other states, including California, Oregon, and Wisconsin.

In a statement provided to Tech Policy Press, Levi said that as the “data center industry continues to invest in response to unprecedented demand by individuals and businesses for the digital services that data centers enable,” the organization has increased its “advocacy and communications activities to continue effectively championing this critical industry to state and federal policymakers, as well as the public and other stakeholders.”

In response to the industry’s growing efforts, groups that advocate for consumer and environmental interests are also trying to build capacity. Tech Policy Press spoke to consumer and environmental advocates in Indiana, Ohio, and Virginia who have pressed for transparency on data center development, worked to counter industry messaging, and participated in negotiations alongside the DCC and its member companies.

Data Center Coalition often flanked by its members

Ben Inskeep, a program director at Citizens Action Coalition of Indiana, a consumer and environmental advocacy organization, says the industry is a formidable force in his state. Indiana is already a welcome environment for data centers, owing to a 2019 law that exempted “data centers from sales tax on materials and equipment needed to build and operate data centers for up to fifty years, as well as a sales tax exemption on purchasing energy,” according to the AI Now Institute, a nonprofit advocacy organization.

“In 2019, nobody really understood just how big the data industry would become,” said Inskeep. He said he was stunned when he saw the projections of astronomical load growth for the Indiana grid. The Citizens Action Coalition tries to raise awareness about the risks data centers pose to the public, such as the possibility of higher utility bills, pollution, and water consumption. Last year, it called on the Indiana General Assembly to enact a moratorium on the development of the massive hyperscale data centers needed to power AI systems in order to permit more time to study their impact.

“Hyperscaler data centers are the single biggest threat to affordability, reliability, and environmental sustainability in Indiana this decade,” Inskeep said at the time.

Inskeep got a front row seat to the industry’s tactics in a negotiation over terms around connecting data centers to the Indiana electricity grid. Regulators approved a pact between Indiana Michigan Power, Citizens Action Coalition, the Indiana Office of Utility Consumer Counselor, Amazon Data Services, Google, Microsoft and the Data Center Coalition earlier this year.

Inskeep said it was clear from his vantage that the industry is not a monolith. “One thing I learned from interacting with them is that they do represent a diversity of data center interests,” said Inskeep. “Just like any trade association, they have lots of different interests that are sometimes aligned, and sometimes competing.”

“You could see the resources at play. Google and Amazon each independently filed testimony. They had three expert witnesses,” said Inskeep. “The Data Center Coalition got involved and had their own experts. The whole industry was getting involved in a big way.”

In neighboring Ohio, which ranks fifth in the nation with 179 data centers in the state, the DCC was similarly flanked by representatives from companies such as Amazon and Google in a recent dispute over whether to charge the data center industry differently from other utility customers. The DCC was “very disappointed” with the proposal adopted by the Public Utilities Commission of Ohio, which was supported by the utility company AEP Ohio and consumer interest groups, which puts more upfront costs on data centers. Earlier this year, Levi said it would create “an unprecedented level of regulatory uncertainty,” stifle innovation, and hurt the Ohio economy.

“The crux of the case was really who should bear the burden of building the infrastructure to serve the data centers, and who should bear the risk if it didn’t pan out,” said Bill Michael, senior counsel for the Ohio Consumers' Counsel. “When we ask ourselves who should bear the risk, should it be regular, average, everyday Ohioans who go to work, who are concerned with putting food on the table, or should it be trillion dollar tech companies that caused the need in the first place? In our judgment, it is simple. It should be the tech firms,” he said.

Even if that decision is regarded as a loss for the industry, just months later it also notched a win in Ohio when Governor Mike DeWine (R) vetoed a budget provision that would have restricted the state’s Tax Credit Authority from entering into new sales tax exemption agreements with data center developers. The DCC had lobbied to restore the exemption.

Zach Schiller, research director at Policy Matters Ohio, a nonprofit research institute, said the exemption represents a massive subsidy to the industry. Even if the Governor had signed the measure, it would not have affected firms such as Amazon, which already have exemptions in place for decades, he said. In a report published in January, Schiller estimated tax breaks for data centers in Ohio could add up to hundreds of millions of dollars in the coming years.

Trying to win hearts and minds at the grassroots level

Even as the DCC expands its coverage across more geography in its efforts to engage with federal, state, and local government entities, it is experimenting with more direct outreach to the public. In Virginia, the coalition formed a group called Virginia Connects. Levi, the coalition’s president, told the Prince William Times that the DCC formed Virginia Connects—which it set up as a 501(c)4) not-for-profit organization—to “educate and engage with Virginians about the benefits that data centers provide statewide and in local communities.”

Last year, amid the introduction of various legislative proposals that could have negatively impacted the data center industry in the state, Virginia Connects sent “text messages and mailers touting the industry’s benefits,” according to the Prince William Times. The group produced videos that it distributed via social media accounts on platforms including X, Facebook, and YouTube.

“Virginia’s data centers are there for you,” a narrator promises in one of the videos. “Virginia’s data centers are essential to our national security and economic competitiveness,” says another, atop images of fighter jets, the Kremlin, Chinese leader Xi Jinping, and the Pentagon. Google’s Ads Transparency Center says the videos were promoted by a Richmond-based public affairs agency, and despite the Virginia Connects account having under 200 subscribers, some of the videos it has posted have millions of views. A video titled “Virginia’s data centers - Connecting us to what matters most” boasts 5.7 million views; the one titled “Virginia's Data Centers Are There For You” shows 4.2 million.

Levi told the Prince William Times that Virginia Connects, which features some of the same industry backers as the Data Center Coalition alongside local chambers of commerce and real estate developers, will not directly engage in political activity such as supporting political campaigns or candidates.

DCC makes donations to Virginia politicians through its own political action committee. These include $50,000 to the Virginia House Speaker’s leadership PAC and Del. Don Scott's Democratic leadership PAC, as well as smaller amounts to 34 state lawmakers, according to Business Insider.

Public interest advocates racing to educate themselves and counter industry

Julie Bolthouse, director of land use at the nonprofit Piedmont Environmental Council, helps convene the Virginia Data Center Reform Coalition, which is made up of a variety of environmental, conservation, and community groups. She said that when the group attends lobby days in Richmond, the state’s capital, it is often “countering the messaging that they have heard from the Data Center Coalition lobbyists.”

The Virginia Data Center Reform Coalition, which formed amidst the rapid expansion of data center development in Northern Virginia, has become a resource to other communities elsewhere in the state who are now trying to educate themselves about the industry and evaluate its claims. “There are a lot of people who need the information we have, and need to talk to each other,” said Bolthouse. The reform coalition was born of what she says was necessity. “At the local level, we were losing every battle.”

Bolthouse says she has observed how the facilities have changed over the years, and how public concern about them has increased. “In the 1990s, we had no problem with data centers. They were part of business parks. They were a different animal. They were not these giant, concrete facilities,” said Bolthouse. Now, she hears growing concern over issues ranging from energy consumption to emissions and noise pollution. Staying on top of the evolution of the industry and informing others is her vocation, she says. As neighbors to Data Center Alley, “we are unfortunately the canaries in the coal mine,” she said.

Likewise, the Citizens Action Coalition of Indiana’s Inskeep says he is now dedicating substantial effort to getting up to speed on the industry so that he can advocate in the interests of Indiana residents.

“This is the top issue, this is the thing I’m dedicating the most time and attention to,” said Inskeep. He says that as data center developers push beyond typical industrial zones, community advocates have more leverage than they may think. “It’s almost a uniquely large amount of leverage, because the data center industry is moving into places where there aren’t established terms and established rules. The companies have budgets that allow them to do things that perhaps other companies cannot do,” he said. This sometimes puts communities in a position to argue for significant concessions.

Transparency remains a challenge. Most of the environmental and consumer advocates Tech Policy Press spoke to said it can be very difficult to get details of data center developments. In general, data center developers have more information about their projects, including land use, energy and water requirements, emissions, employment figures, and other details. Community advocates often learn the finer details of particular projects after they are approved.

This asymmetry is exacerbated by the widespread use of non-disclosure agreements (NDAs). The DCC has defended a degree of secrecy around factors such as energy usage. In April, a DCC representative told Politico that “publicizing energy usage could also reveal trade secrets, and what kinds of work a particular data center is doing.” Levi, the organization’s president, has said that “the protections provided by NDAs may result in an increase in the amount and detail of information shared with localities as projects are considered.”

“It’s very difficult with the NDAs, prior to them actually being approved, to know what is going to be in the facility,” said the Piedmont Environmental Council’s Julie Bolthouse. “We don’t know how much water they are going to use, we don’t know what kinds of emissions, and we don’t know how much electricity they will need or what type of service they will require,” she said. “So basically we gather information after the fact.” Local officials, who may have access to more information sooner, are often incentivized to advance data center projects which, on paper, “always come up as a winner,” said Bolthouse.

Jenna Ruddock, advocacy director at Free Press, says it is crucial for community members to have access to more information. “In a number of jurisdictions, we’ve seen efforts to pass meaningful transparency laws. A lot of companies release data in aggregate, which makes it difficult for folks in communities to understand what the specific impact will be. It’s important to pass those laws to make more information available earlier in the process, before the permitting and development is underway, when it is too late for the communities to have their say.”

The federal policy environment favors the industry

On July 23, the Trump administration announced its AI Action Plan. Its goals include promoting AI innovation, reducing regulatory burdens on corporations, particularly for data center development, and overhauling permitting for energy and related infrastructure. In a statement, Levi praised the White House plan. “DCC was pleased to see that many of our policy recommendations were incorporated in President Trump’s plan,” he said, including “the removal of barriers to faster data center construction and operation,” “streamlining permitting,” and moves to advance energy infrastructure.

During the public comment period that preceded the release of the plan, the DCC submitted its own comment to the White House Office of Science and Technology Policy (OSTP). In that document, the DCC praised Trump’s executive order on “Removing Barriers to American Leadership in Artificial Intelligence” and “the President’s desire to make the United States an undisputed leader in the development and application of AI technology.” It called for a range of reforms to hasten data center development, including “comprehensive permitting reform,” limitations on judicial review of permits, a “Nationwide Permit for Data Centers” under the Clean Water Act, and various other executive and congressional interventions.

In a statement, Levi told Tech Policy Press that “DCC consulted with OSTP directly and appreciates their willingness to engage on the importance of developing a robust domestic data center industry that promotes US national security, global economic competitiveness, and continued AI dominance.” The organization, he said, will “continue to engage with the White House and Congress on developing policies to encourage faster data center construction and operation, which will allow data center companies to continue investing hundreds of billions of dollars to expand US data center infrastructure across the country.”

For those who seek to counter the industry’s influence, the Trump administration’s AI plan is a devastating blow. “What’s happening at the federal level feels like we were playing a chess game and someone just came in and threw the chessboard on the floor and said, keep playing,” said Bolthouse.

“The one thing that keeps me going is that in the 1970s, rivers were on fire, and people were dying of pesticides. That’s why we created protections that we know have in place to try to prevent that sort of thing. I hope that as things get worse and worse and the impact of the decisions we’re making become clearer, we’ll move faster and maybe harden those protections and evaluate them in terms of AI and data centers,” she said.

Big Tech's Invisible Hand is a cross-border, collaborative journalistic investigation led by Brazilian news organization Agência Pública and the Centro Latinoamericano de Investigación Periodística (CLIP), together with Crikey (Australia), Cuestión Pública (Colombia), Daily Maverick (South Africa), El Diario AR (Argentina), El Surti (Paraguay), Factum (El Salvador), ICL (Brazil), Investigative Journalism Foundation - IJF (Canada), LaBot (Chile), LightHouse Reports (International), N+Focus (Mexico), Núcleo (Brazil), Primicias (Ecuador), Tech Policy Press (USA), and Tempo (Indonesia). Reporters Without Borders and the legal team El Veinte supported the project, and La Fábrica Memética designed the visual identity.