A yearlong Senate investigation has concluded that several of the largest technology companies are misleading the public regarding the actual costs and benefits of building AI data centers across the United States. The findings, first reported to TIME, are expected to fuel congressional efforts to impose stricter regulations on the energy-intensive projects.
Senator Elizabeth Warren, a Massachusetts Democrat, emphasized the need for accountability, stating that Congress must ensure these corporations pay their fair share. Warren has previously advocated for a national pause on new data center construction until developers agree to cover full operational costs. Her office spearheaded the probe alongside Senators Chris Van Hollen of Maryland and Richard Blumenthal of Connecticut, focusing their inquiry on Amazon, Google, Meta, Microsoft, CoreWeave, Digital Realty, and Equinix.
According to the report, while developers frequently cite construction jobs to justify government incentives, many refused to disclose comprehensive data on permanent staffing. When pressed, some companies estimated a ratio of roughly one permanent employee for every megawatt of power demand. Under this metric, a 100-megawatt facility—consuming as much electricity as 100,000 homes—would employ only about 100 permanent workers.
“This report lays bare what we have long known: working Americans and local communities are footing the bill for Big Tech’s massive expansion of data centers, while these companies continue to operate without transparency,” said Van Hollen.
The investigation also revealed that the most significant financial incentives for developers are not the widely publicized property tax breaks, but rather sales tax exemptions on computer equipment. GPUs alone account for an estimated 39% of spending at a typical 1-gigawatt AI data center.
Transparency issues were further highlighted by the routine use of nondisclosure agreements (NDAs) during negotiations. All four major tech giants in the probe—Amazon, Google, Meta, and Microsoft—have historically sought NDAs with local governments. While Microsoft and Amazon have announced plans to stop requesting them from local entities, they will continue using them with state agencies and utility commissions. Google and Meta declined to make similar commitments.
The report comes as data centers become a polarizing political topic, with approximately half of Americans viewing their construction negatively, according to a recent Economist/YouGov poll. Despite opposition, President Trump has warned that resistance to data center development could drive the AI industry overseas.
A central concern of the investigation is whether tech companies are covering the infrastructure costs required to support their operations. The study found that none of the seven companies agreed to a standard requiring them to fund new power infrastructure that would not have been necessary without their demand. Instead, they argue that grid upgrades benefit the broader public and should not be exclusively assigned to them.
The report cites a power plant acquisition in Richland Parish, Louisiana, by utility provider Entergy, which analysts attribute largely to Meta’s planned $50 billion data center. The facility is expected to draw 4,500 megawatts—roughly four times the peak demand of New Orleans—and could raise average monthly bills for Entergy customers by $8 to $13. Meta has disputed the link between its project and the resulting costs.
As Congress prepares to reconvene, the data center issue remains a legislative priority. The House recently passed the bipartisan Ratepayer Protection Act by a vote of 417-3, which would direct states to require large-load customers to cover the incremental costs of generation, transmission, and distribution infrastructure. However, the measure stalled in the Senate, where Democrats criticized it as ineffective for not mandating cost recovery from companies. The final vote to advance the bill failed 57-43.
With electricity rate authority largely resting with state regulators, the heaviest battles over data center costs will likely continue at the state level. However, Senators Van Hollen and Warren argue that federal action is necessary. Van Hollen stated that Congress must pass legislation ensuring that corporations covering the energy costs of their operations do not shift those burdens onto consumers.
Trump’s warning about moving AI overseas feels like a cheap scare tactic. We need regulation now, not another free pass for corporations.
NDAs with local governments? That transparency violation is worse than the costs. Citizens deserve to know exactly what deals their cities are making.
It is shocking that one data center equals only 100 permanent jobs while consuming power for 100,000 homes. The math doesn’t add up for taxpayers.