Data Center Lobbying Muscle Shifts To Statehouses As Local Battles Boil

After pouring more than $1.1B into federal lobbying the past two years, Big Tech is increasingly redirecting its political firepower to the places where its data center projects actually live or die: statehouses and municipalities. That pivot is accelerating just as major states like Texas and California ramp up their focus on data center regulation.

The industry’s spending patterns are shifting as the battleground changes. Local officials, not federal regulators, decide zoning, tax breaks and interconnection approvals for data centers — the levers that determine whether billions in digital infrastructure projects ever break ground. 

“This is just not something that we were looking at as a factor in races even just a couple of years ago,” said Adrian Shelley, Texas director for Public Citizen, a consumer advocacy organization. “This is an industry that is ascendant in the state like nothing I've seen in my decade and a half of ground-level advocacy, and the spending that we are seeing is unlike anything we saw even a year ago.”

Community pushback against data center developments is reaching new levels as the facilities look to enter an ever-increasing crop of cities across the U.S. Monterey Park, California, this week passed a first-of-its-kind ballot measure that permanently bans data centers, and the New York State Legislature is poised to approve a one-year moratorium.

Michigan, Nevada and Wisconsin also have data center regulations on their ballots this year.

New Heatmap data shows that 55% of Americans are strongly opposed to new data center development, and at least 20 projects, worth $41B in planned investment, were canceled nationwide in Q1. 

​​Meanwhile, Data Center Coalition, one of the leading advocacy groups for the industry, spent $420K on lobbying in the first quarter of the year, compared to $123K in the first three months of 2025, according to OpenSecrets. 

Data Center Coalition has expanded its local-level efforts — which started in Virginia in 2024 — to Texas, Ohio, Pennsylvania and a few other states this year as data center issues take the main stage in state politics. It’s also begun running ads in Texas touting the benefits of data centers.

In Texas alone, tech‑aligned political action committees have already spent heavily in primaries, from Meta‑backed Forge the Future’s $1.3M to Elon Musk’s $500K in state Senate races, while grassroots groups mobilize to oust city council members over data center approvals. 

As the Electric Reliability Council of Texas’ queue swells past 400 gigawatts and new state rules streamline hookups for massive loads, the 2026 state and local elections have become the true arena where the future of artificial intelligence‑era development — and the backlash against it — will be decided.

These contests haven’t yet seen the same flood of money to candidates as federal races, with some advocates suspecting that, so far, they’re gun shy due to intense local backlash.          

“At that local level, I think if you had a big corporate player trying to determine the outcome of the elections, you’d see a lot of blowback,” said Sam Bernhardt, deputy political director of Food & Water Watch. “It would be counterproductive to them and work in the interest of their opposition.”  

But others believe it’s just a matter of time. Preliminary spending for state legislative races in Texas may be a taste of things to come. Even Bernhardt believes data center allies may be waiting to spend money at the end of the election or will focus efforts on just a few consequential races.

Development has simply exploded in recent years, with a growing pipeline of projects seeking more power. The state’s utility, ERCOT, has more than 400 GW in its interconnection queue, said Newmark Senior Managing Director Dom Espinosa.

The demand is “ginormous,” and developers are racing to get greenlit under the recently approved “Batch Zero” process, where clusters of projects get simultaneous approval. Those that don’t get into the first batch of approvals may have to wait years for more power infrastructure to come online.

“Texas is really emerging as one of the central battlegrounds in the fight for data centers and AI infrastructure,” said Tiffany Muller, president of End Citizens United. “It really is the wild, wild west. And I think the industry is seeing Texas as this real opportunity for them to get in early and shape the political landscape before the policy debates have even happened.” 

Muller’s group doesn’t yet have a full breakdown on state-level spending in Texas but believes the industry and aligned political action committees will be expanding their reach on the state level this cycle, the acceleration of a recent trend toward increased corporate spending on state legislative and judicial elections. 

The industry believes it's “worth the investment” to spend money on state legislators and county commissioners who can “rubber stamp what they want,” all at a bargain compared to the price of shaping the federal debate, Muller said.

The rapid growth of Texas data centers — which, due to power limitations, has sent developers scrambling across the state for sites — has put many more rural areas into play. Newmark’s Espinosa said jockeying for sites via the batch process has created the frenzy that’s now a catalyst for more political opposition. 

That same fervor is also gripping many local elections. It was an issue in the recent mayoral election in Round Rock, Texas, where a local nonpartisan advocacy group called Protect Round Rock, furious at city council members for approving the community’s ninth data center, has already mobilized around replacing the entire slate of local leaders in the coming year, starting with next May’s election. 

The citizens' group has said it is “left wanting for seven good shepherds," a Biblical reference that also refers to the mayor and six council members it seeks to vote out. The group is committed to letting voters know who’s taking money from the data center industry and will align with groups statewide, including the Texas Data Center Rebellion, which just held a statewide conference, according to co-founder Pamela Oldham.

“We're also learning from other groups to move together as we approach the midterms so that this is an issue up front in the minds of both voters and candidates,” Oldham said. “Our elected representatives are not representing us.”

Texas is far from the only state where this is a live issue. States like Wisconsin and North Carolina, with close races that may determine control of state legislatures, will see increased spending, Muller said. 

A series of regulations in Illinois around data center development has drawn outside spending, and Pennsylvania has also seen significant pushback, though local elections won’t take place there until next year. 

Newmark’s Espinosa believes that even with this public pushback, the industry will still find a way to build and innovate. He hopes changes to ERCOT’s interconnection policy will speed this along. 

“I think people are definitely being considerate of how the communities feel about these things, and how do we kind of meet them where they are on it,” he said.

Others see more potential friction going forward. Public Citizen’s Shelley speculates that while the grassroots groups in Texas seek local leaders who share their opposition to data centers, they still can impact projects without winning elections. With such a long interconnection queue, any hiccups or delays in development can cause financing to fall through or push a developer to move on. 

“Lawmakers have got to understand where their constituents are on this, and that is going to require a real development in their thinking,” he said.