Stalled Laws and Suing Tech Giants: The Uphill Battle to Regulate AI Data Centers

A monumental crusade to defend the livelihoods, security, and rights of the working majority is underway nationwide!

The fight to regulate AI data centers at the Federal, state, and local governments faces an uphill battle against corporate overreach. The threat is driven by the Artificial Intelligence boom, a corporate land grab exploiting our communities in the name of tech dominance. Although the public is demanding accountability, attempts to regulate these facilities are stalling as corporate interests dominate government policy. We are seeing State legislation fail over and over, small municipalities enacting new ordinances, and a tech giant suing Wisconsin’s Public Service Commission, opening a new front in a fight over financial protections for Wisconsin ratepayers. 

Just a year ago, my tiny city of 16,000 residents was blindsided by a massive $1.6 billion hyperscale data center proposal for a quiet, rural Red Cedar Township. Pushed by a secretive tech giant operating through a shell company named Balloonists, LLC, the project is a glaring example of corporate overreach. I’ve seen this playbook before—like in the 1980s when Kennecott sought to build an open-pit sulfide mine beside the Flambeau River in Ladysmith, WI. Just what is happening at the Federal, state, and local governments to regulate these giant monsters?

Let’s start with the Federal push to implement data center regulations.

On June 24, 2026, Representative Ocasio-Cortez (D-NY-14) introduces the House Version of the AI Data Center Moratorium Act. Representative Ocasio-Cortez introduced the Artificial Intelligence (AI) Data Center Moratorium Act, legislation that would impose a temporary moratorium on the construction of new data centers and the expansion of existing ones until Congress passes comprehensive legislation to address the economic, environmental, and safety impacts of artificial intelligence. 

Representative Alexandria Ocasio-Cortez states why this legislation is vital in the following quote.

“We have seen ICE partner with AI companies to surveil Americans, social media users employ AI bots to create sexually explicit deepfakes of women and children, and data center construction inflate electric bills in communities across the country. And all of this harm has occurred because of the absence of federal legislation to regulate AI,” Representative Ocasio-Cortez said. “Congress has a moral obligation to stand with the American people and stop the expansion of these data centers until we have a framework to adequately address the existential harm AI poses to our society. We must choose humanity over profit.”

Representative Alexandria Ocasio-Cortez states what the legislation proposes to do in the following.

Specifically, the Artificial Intelligence Data Center Moratorium Act would institute an immediate federal moratorium on the construction of new data centers and the expansion of existing data centers until strong national safeguards are in place to ensure that:

AI is safe and effective — preventing executives in the AI industry from releasing harmful products into the world that threaten the health and well-being of working families, our privacy and civil rights, and long-term economic and social stability; The economic gains of AI and robotics will benefit workers, not just the wealthy owners of Big Tech; and AI does not increase electricity and utility prices, harm communities, or destroy the environment.

Read the full text of the legislation here. Read the section-by-section summary here

Take Action to support this legislation by contacting your congress members. 

To contact your U.S. Representative, find your specific member by entering your address on the Congress.gov Find Your Member page or by using your ZIP code on the House.gov Find Your Representative directory.

The new bill offers hope, though political agendas routinely overshadow the common good. Where is the legislation now? The bill has been referred to the following House committees for review: Committee on Energy and Commerce, Committee on Foreign Affairs.

You can track the progress of the bill and read its full text on the Congress.gov H.R. 9442 Bill Page, or read the original press release on Representative Ocasio-Cortez’s Official Website.

I, like many, am concerned for the health and safety of our families. The term safety is a big one for many rural communities concerned for the health of their families. After all, it is well known that data centers are a risk to communities’ health. 

“PFAS (per- and polyfluoroalkyl substances) and data centers are linked to several serious human health risks. While PFAS act as a direct toxic chemical threat, data centers impact health through environmental degradation, chemical usage, and the localized pollution required to power them.” 

 Source: https://www.eesi.org/articles/view/data-centers-are-contributing-to-pfas-forever-chemical-pollution

What efforts are happening at the State level to regulate Big Tech data centers’ overreach?

The Wisconsin Assembly advanced a Republican-sponsored bill to require data centers to use closed-loop cooling systems, annually report water usage to the Department of Natural Resources (DNR), and file financial bonds to restore construction sites. It was unpopular legislation and did not move forward. Environmental groups and utility advocates argued that the bill’s provisions actually did not guarantee that big tech companies would pay the full costs of grid upgrades. This effectively leaves everyday residents vulnerable to higher utility bills. You can track the full legislative history, substitute amendments, and voting records on the Wisconsin State Legislature portal

Another piece of legislation fails at the state level.

Democrats pushed for stricter environmental guidelines, requiring data centers to source a majority of their energy from renewable projects and meet specific labor standards to qualify for state tax breaks. Wisconsin Assembly Bill 722, also known as the Data Center Accountability Act, failed to advance in the Republican-controlled legislature. Introduced in December 2025 by Democratic lawmakers, the bill died in the Assembly Committee on Energy and Utilities at the close of the legislative session. Learn more about this bill on the Wisconsin State Legislature website.

Again, the public is demanding accountability; attempts to regulate these facilities are stalling as corporate interests dominate government policy. Is there hope? Believe it or not, help is coming from the Public Service Commission of Wisconsin (PSC).

Because data centers draw massive amounts of electricity—with some projected campuses demanding as much power as an entire mid-sized city- the Public Service Commission of Wisconsin (PSC) has stepped in. 

The Public Service Commission of Wisconsin (PSC) ensures safe, reliable, affordable, and environmentally responsible utility services and equitable access to telecommunications and broadband services. 

The PSC approved first-of-its-kind tariff rules for major utilities like We Energies. These rules mandate that data centers pay 100% of their energy costs and cover the full expense of any new electric infrastructure or grid upgrades. The PSC requires very large data center customers to post substantial financial security (such as cash deposits or letters of credit) before utilities commit to building costly infrastructure, preventing “stranded assets” if the projects do not materialize. This rule is currently being challenged in court by some tech firms like Oracle. Source: Public Service Commission of Wisconsin (PSC)

Oracle Corporation is a global technology company headquartered in Austin, Texas, specializing in enterprise database management, cloud computing infrastructure (OCI), and business software. It is one of the world’s largest software companies, providing the foundational back-end data systems for major banks, hospitals, and governments. And per usual, it doesn’t want to pay its fair share, and that’s what many environmentalists call corporate overreach. Oracle’s lawsuit is suing Wisconsin’s Public Service Commission (PSC) in Ozaukee County Circuit Court, opening a new front in a fight over financial protections for Wisconsin ratepayers. 

What is Oracle?

In the lawsuit, Oracle and We Energies are asking the PSC to reconsider the credit rating for requirements for data center developers that could cost the company millions of dollars a year. The PSC rules mandate that data centers pay 100% of their energy costs and cover the full expense of any new electric infrastructure or grid upgrades. Obviously, they don’t want to pay their fair share out of the billions of dollars in profits they make, but instead want middle-class Americans to foot the bill. Oracle’s lawsuit is an example of corporate overreach’s attempt to fleece Americans yet again!

Let’s get back to where it all stands with my city. Menomonie, a tiny city of 16,000 residents, was blindsided by a massive $1.6 billion hyperscale data center proposal for a quiet, rural Red Cedar Township. It was pushed by a secretive tech giant operating through a shell company named Balloonists, LLC. Under the previous mayor, Randy Knaack, a new ordinance was initiated, 2026-01, creating a new zoning classification, the I-4 Data Center Industrial District. The regulations separate data centers from warehousing and force existing projects—such as the $1.6 billion proposed by Balloonist LLC—to restart their applications. This was a good move that stopped Balloonist from moving forward.

At that time, the city council and former Mayor Randy Knaack indicated that this ordinance is a baseline, with future amendments expected to explicitly regulate noise, water usage, and light pollution. You can review the complete legislation via the City of Menomonie Document Center. 

Where is this ordinance now?

Menomonie City Mayor Matthew Crowe, in his Mayor’s report, stated that a draft of the I-4 ordinance is set for the August 4th city council meeting. No vote on it, just a draft and an introduction. Under new mayoral leadership, along with Mayor Crowe’s substantial experience as an Environmental Engineer, this is hopeful news.

The fight to regulate AI data centers at the Federal, state, and local governments faces an uphill battle against corporate overreach. The threat is driven by the Artificial Intelligence boom, a corporate land grab that exploits small communities in the name of tech dominance. The public has begun to demand accountability, but attempts to regulate these facilities are stalling as corporate interests dominate government policy. All of this is a whole lot more than people are willing to tolerate. We are seeing State legislation fail over and over, small municipalities enacting new ordinances, and a tech giant suing Wisconsin’s Public Service Commission, opening a new front in a fight over financial protections for Wisconsin ratepayers.

Time will tell how this monumental crusade to defend the livelihoods, security, and rights of the working majority will play out!

Rachel Tilseth is a Menomonie, Wisconsin-based environmental writer, filmmaker, and owner of Wolves of Douglas County WI Films & Media. Lead writer at The Red Cedar Watershed Ledger. Her work explores the intricate relationships between humans, wildlife, and local ecosystems.

The Red Cedar Watershed Ledger is based in Menomonie, Wisconsin, in the historic Red Cedar Basin.

Discover how our local economy can thrive without leaving the planet behind. We cover news and stories on sustainable economic development, highlighting initiatives that boost community prosperity, foster equity, and protect our local ecosystems.

We are producing a series of educational articles and interviews featuring city leaders, scientists, and residents to explore sustainable economic development in the region. What began as a grassroots effort by Menomonie residents to successfully pause a controversial data center has evolved into a broader mission championing environmentally conscious, community-driven economic growth.”

The Red Cedar Watershed Ledger, Menomonie, WI

Wolves of Douglas CO WI Films & Media, LLC

https://wolvesofdouglascountywisconsin.com