PA’s AI Moment | How Smart Regulation Can Turn Data Centers into an Economic Win for All

The focus on data centers may feel new given AI’s recent prominence, but they have been part of our lives for decades. They power modern life in ways we often take for granted — cloud services, photo and video storage, government data security, grid management, banking, and healthcare all rely on data centers to deliver services to consumers. The need for them is evidenced by record capital expenditures from leading companies including Meta, Amazon, Microsoft, and Google. 

Senator Dave McCormick and Governor Josh Shapiro have recognized Pennsylvania’s opportunity and pushed for responsible investment in data infrastructure. These bipartisan leaders have worked to put a broad vision in place that embraces the future. Now it is up to other leaders to build the regulatory framework around that vision. 

Appropriate regulation is a necessary step in the development of data center and AI infrastructure. Stakeholders must feel heard, and safety and community concerns must be addressed. At the same time, we must balance those concerns against the tremendous potential these investments hold for communities. 

Developers value predictability and speed — two factors that often drive investment decisions more than overall cost. When a developer knows a site can be permitted in a reasonable timeframe, that creates leverage for local municipalities that can result in greater community investment. 

Developers also carry a dual responsibility. First, they must include the community in their planning in a way that is both environmentally responsible and sensitive to quality-of-life concerns. Equally important, developers have a responsibility to the Commonwealth to innovate and address the challenges they encounter. 

We believe in the private sector’s ability to solve problems, particularly when incentives are aligned. Cutting-edge solutions to concerns raised by residents — including advances in power generation and storage, water usage, and sound mitigation — are the path to earning public confidence. 

While data centers are often cited as a driver of rising energy prices, the reality is more complicated. The growing demand for energy, driven by both industry and personal use, requires increased generation capacity. 

Look no further than your own home: we have more connected devices than ever — cell phones, tablets, televisions, HVAC systems, appliances — and each one draws from the grid. Rather than viewing data centers simply as another strain on the grid, we should incentivize generation as well.

We have already seen data campuses that combine centers with diverse generation sources, feeding power back to the grid. Pairing streamlined generation regulations and permitting with incentives tied to data center development is a meaningful step toward meeting grid demand at a price consumers can afford. 

What is clear is that data centers, and the AI industry as a whole, offer Pennsylvania a tremendous economic opportunity. We need a regulatory framework that protects communities while boldly embracing the future of this industry.