Governors who courted AI data centers are now trying to rein them in

AI may be booming, but the infrastructure powering it has become a political liability. For years, governors competed to lure data centers with tax breaks, expedited permitting, and promises of jobs and investment. Now, as sprawling AI campuses drive concerns over electricity prices, water use, and local control, some of those same governors are pulling back. The shift comes as data centers become an increasingly potent political issue ahead of the midterm elections. Governors facing reelection, and others with possible national ambitions, are trying to show voters that the costs of the artificial intelligence boom won’t simply be passed on to surrounding communities and ratepayers. From Pennsylvania to Texas, state leaders who once courted data center development are suspending incentives, tightening permitting rules and, in some cases, halting new projects altogether. Josh Shapiro (PA) Pennsylvania Gov. Josh Shapiro has historically welcomed data center infrastructure to the Keystone State. In his first term, he backed a $90 billion private investment in data centers, energy generation, and workforce development. He also created a pilot program for government workers to use Chat…