Newsom Signs Seven Bills to Rein In California's Data Center Boom

California Governor Gavin Newsom signed a package of seven bills on Monday aimed at tightening oversight of the state's rapidly expanding data center industry, introducing new requirements on electricity costs, water consumption and local review as communities push back against a wave of AI-linked development.

The legislation requires data centers to disclose details about their electricity use, water consumption, land use and workforce needs, giving local communities more information to weigh proposed projects. The measures are also designed to prevent the cost of new power generation and grid upgrades needed to serve data centers from being shifted onto other ratepayers.

"With these laws, we are ensuring that Californians remain in the driver's seat — and that those profiting from data centers aren't doing so at our expense," Newsom said in a statement.

The state said the laws will require data centers to comply with California's energy procurement requirements and help bring new clean-energy supplies onto the grid.

The package arrives amid mounting national concern over the strain data centers place on electricity demand, water resources and local infrastructure as technology companies race to expand artificial intelligence capabilities. The rapid buildout has drawn resistance in California and elsewhere, with residents and advocacy groups raising concerns about electricity bills and pollution tied to the facilities.

The Data Center Coalition, an industry trade group, said its members were committed to responsible development but warned the measures could drive projects to other states. Khara Boender, a director of government affairs for the group, said the legislation "creates significant uncertainty" and introduces "potentially duplicative requirements" that make doing business in California less attractive.

"These are likely to further limit data center development in California — an already declining market — which pushes job creation, clean energy deployment, and tax revenue to neighboring states," Boender said in a statement.