The Democratic Party in the United States is rapidly moving toward implementing regulations on artificial intelligence (AI) data centers. The first bill related to the promotion of data center construction has passed a key hurdle in Congress following the midterm elections, but its future remains uncertain amid opposition from within the party.
On November 9, the U.S. Senate conducted a procedural vote on the Bipartisan American Affordability and Jobs Act (BAAJA), passing it with a vote of 73-25. This procedural vote is a preliminary step to allow further discussion on the bill before it goes to a full Senate vote. After passing the Senate, the bill would still need approval from the House of Representatives and the President.
BAAJA, introduced on September 30 by two Republican and two Democratic senators, aims to lower electricity costs by expediting various energy projects in the U.S. The bill seeks to relax standards and streamline permitting processes, which would also apply to the transmission networks and power facilities of data centers. However, it mandates that all data centers bear the full cost of transmission, and those with a capacity of 20 megawatts (MW) or more must cover the entire costs of construction for transmission, generation, and storage facilities.
Despite the cost burdens, if BAAJA passes, it is expected to accelerate the construction of data centers due to the shortened permitting process. Consequently, the U.S. AI and energy sectors, including major tech companies, have shown broad support for the bill.
Former President Donald Trump also urged all senators to support the BAAJA via his social media platform Truth Social, stating, "This groundbreaking permitting reform bill will codify our 'America First' energy policy and allow for the faster construction of pipelines, gas lines, mines, and power plants than ever before. This will lower energy costs for American households and create high-paying jobs for Americans."
Democratic Opposition
However, if BAAJA passes, it is expected to reduce the scope of enforcement for key environmental laws, including the National Environmental Policy Act (NEPA), the National Historic Preservation Act (NHPA), the Clean Water Act (CWA), and the Endangered Species Act (ESA), leading to inevitable negative impacts on the environment.
Environmentalists, farmers, Indigenous groups, and opponents of data centers have strongly opposed the bill. Within the Democratic Party, dissenting opinions are emerging, particularly in the House, raising uncertainty about the bill's final passage. Critics argue that if the Democrats, who campaigned on regulating data centers and won the midterm elections, support the fast-tracking of this bill, it could undermine their policy direction.
House Minority Leader Hakeem Jeffries, a leading candidate for the next Speaker of the House, pointed out in an interview with Politico last week that BAAJA is "lacking in many respects" and does not reflect the views of many Democratic House members. He stated, "Unless there is more constructive dialogue with Democratic House members in the effort to reduce the cost burden on American families, we will not simply approve the bill that comes over from the Senate."
As the Trump administration and Republicans rush to legislate the bill before the new Congress, which will have a Democratic majority starting in January, the passage of the bill remains uncertain given the clear stance of the Democratic Party on data center regulation following the midterm elections.
Global investment bank TD Cowen has reduced the likelihood of BAAJA's passage from 40% before the midterms to 25% now, noting that the Democratic Party's significant electoral victory may lead to increased criticism that the bill concedes too much to the oil and gas industry.
* This article has been translated by AI.
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