Key Points:

• The political divide over data centers is intensifying ahead of Arizona’s midterm elections

• Arizonans are largely skeptical of the developments, regardless of party affiliation

• Candidates up and down the ballot are split between embracing and limiting growth

The debate over skyrocketing data center growth is intensifying as Arizona’s political hopefuls hit the campaign trail and attempt to stake out their positions on one of the hottest issues in the midterm elections. 

On Aug. 31, Attorney General Kris Mayes became the first statewide elected official to call for a moratorium on data centers in Arizona, citing public concerns surrounding water usage and electricity demand. 

The Arizona Chamber of Commerce & Industry followed up with a facetious challenge, urging data center opponents to stop using all cloud-based technology, from social media and teleconferencing to artificial intelligence platforms and online banking. 

The spat exemplifies a growing chasm in how Arizona’s leaders are communicating with voters who are becoming increasingly skeptical of AI infrastructure, from hyperscale data center projects to automatic license plate readers. 

While some candidates hope to ride the groundswell of data center backlash to victory in November, others are trying — not so gently — to temper what they see as blind hatred for the technology of the future. 

“It’s no secret that across the nation, data centers are not polling well,” said Courtney Coolidge, the executive vice president of the Arizona Chamber. “It’s also political season, and so it’s politically expedient to say these things when you know there’s legitimate concerns around them.”

A poll from Noble Predictive Insights found that 57% of registered Arizona voters surveyed oppose new, large-scale data center projects. The poll also found that a majority of those voters, regardless of party, support limiting data center development, citing “concerns about water use, electricity demand, and infrastructure costs.”

Additionally, a report from the Governor’s Office of Resiliency found that communities are “overwhelmed” by the volume and scale of proposed data center projects. The report also highlighted “a disconnect between state-level energy policymaking and the nuanced realities facing local communities.”

Cynthia Zwick is the director of the Residential Utility Consumer Office, a small state agency dedicated to representing the interests of residential utility customers. She attributes the backlash to a lack of community engagement from data center developers, utility companies and elected officials.

“I think people are very aware of the benefit that they receive through the technology that’s coming forward, but what I interpret this to be more about is just a simple lack of communication and transparent sharing of factual information about what’s happening,” Zwick said.

Meanwhile, President Donald Trump weighed in on the nationwide backlash on Aug. 31 in a social media post, taking a much more aggressive stance on the issue.

“The only reason that communities throughout the U.S.A. should not want Data Centers is if they want to end up being backwards and poor,” Trump wrote. “If they want to be successful and rich, with far lower taxes and jobs all over the place, let Data Reign.” 

Some candidates are leaning into that sentiment, including the Republican hopefuls for the Arizona Corporation Commission. The Commission regulates investor-owned and private electric companies in the state and reviews the electric service agreements data center operators enter into with those companies. 

Commissioner Kevin Thompson is an outspoken supporter of data center growth, and even received criticism for representing a data center client as part of his government relations firm, Broadmore Consulting. 

“I don’t think it’s realistic to bury our heads in the sand and simply say no to new data centers,” Thompson said during an April commission workshop.

Rep. Ralph Heap, who is running for the second Commission seat up for grabs this year, told the Arizona Capitol Times in May that he would support data center growth in Arizona to contribute to the nation’s AI dominance.

Coolidge said that sort of messaging, including the Chamber’s “Arizona Offline Pledge,” is not meant to diminish concerns, but to start a productive dialogue.

“We wanted to make the point that everyone wants the benefits of the digital economy, but those benefits require infrastructure, and so that infrastructure needs real policy conversations.”

Democrats Clara Pratte and Jonathon Hill, who are hoping to upset the all-Republican majority on the Commission, have yet to join Mayes’ calls for a moratorium. But they have pledged to “demand strict rules to stop reckless, AI-driven development of data centers from draining Arizona’s water resources and forcing everyday Arizonans to pay for big corporations’ energy needs.” 

Gov. Katie Hobbs has committed to end tax incentives for data centers if she is reelected, but stopped short of endorsing a pause on development. Those tax incentives are currently on pause until 2029, a provision of the state budget that Hobbs pushed for during the legislative session.

“The governor wants to permanently end the data center tax credit, make data centers pay their fair share for the water they use, and to stop increases in utility bills due to their energy use,” said Christian Slater, Hobbs’ spokesman. 

Congressman Andy Biggs, Hobbs’ Republican opponent, has also committed to repealing the tax incentives, though polling from Noble Predictive Insights shows voters trust the governor more on the data center issue. Thirty-nine percent of voters surveyed said they viewed Hobbs as best equipped to manage data center growth, while 30% said they trusted Biggs more.

Biggs’ running mate, former Sen. Sine Kerr, told KTAR on Tuesday that the ticket would not support an outright moratorium on data centers and would instead prefer to keep that decision-making authority with local communities.

“I think with responsible guidelines and guardrails, there is a place for data centers,” Kerr said.

Coolidge said she doesn’t see Mayes’ proposed moratorium coming to fruition, but hopes cooler heads will prevail after the election, when newly elected leaders descend on the Capitol to consider new data center policies.

“I think during election season we see extremes on both sides,” Coolidge said. “You see the ‘build everything’ hysteria, or you see the ‘build nothing’ hysteria. I think the reality is, if we end up in the middle, that’s where serious policy will be developed, and that’ll probably happen after an election cycle.”