US governors crack down on data centers

In 2026, a wave of state-level regulatory actions across the United States targeted the rapid expansion of data centers, driven by growing public opposition over energy consumption, water use, noise, and community impacts. United States — Pennsylvania Governor Josh Shapiro signed Executive Order 2026-05 on August 18, imposing the 'strictest guardrails in the nation' on data center development, including requirements for full electricity cost coverage, clean energy sourcing, local community approval, and transparency, while removing data centers from the fast-track permitting program. United States — Texas Governor Greg Abbott, facing similar backlash, ordered a moratorium on new data center grid connections pending audits by the United States — Public Utility Commission of Texas and ERCOT, and called for banning data centers in rural areas and eliminating tax breaks. These actions followed months of community protests, including a petition by Save Cedar Creek Lake that led Diode Ventures to cancel a project, and statements from figures like Mark Nelson. The crackdown has spread to other states, with governors in United States — Arizona, United States — New York, United States — Illinois, and others imposing moratoriums or restrictions. The political backlash has become a major issue in the 2026 midterm elections, with candidates like Gina Hinojosa in United States — Texas and Stacy Garrity in United States — Pennsylvania capitalizing on the issue. Banks and financiers, including JPMorgan, Morgan Stanley, and Bank of America, are now factoring community opposition into their risk assessments for data center financing, potentially slowing investment in the sector.