Big Tech companies and utility giants are mounting an aggressive lobbying campaign in California to block or weaken seven bills that would regulate data centers, even as public opposition to new facilities reaches unprecedented levels. The industry's financial push comes as artificial intelligence fuels massive expansion of data center construction, prompting lawmakers to propose strict new rules around water usage, energy consumption, and infrastructure costs.

What's Driving the Public Backlash Against Data Centers?

The shift in public sentiment has been dramatic. A May Gallup poll found that seven in 10 Americans oppose data center construction in their communities, while a July Public Policy Institute of California poll found similar opposition statewide. Rising concerns about utility costs, water consumption, and strain on electrical grids have transformed data center policy into a major election issue. Hundreds of cities have taken action this year, with some like Monterey Park voting to permanently ban data centers, while Bay Area cities including Pittsburg have reversed previous approvals following public outcry.

"The level of awareness is through the roof, and the level of concern and sensitivity is through the roof, it's bipartisan, it's national, and it's across the board," said California Sen. Steve Padilla, a Democrat from Chula Vista who authored two pending data center bills.

California Sen. Steve Padilla, Author of Data Center Legislation

How Much Money Are Tech Companies Spending to Influence California Lawmakers?

The financial scale of the lobbying effort is substantial. During the first half of 2026, Amazon spent more than $500,000 to lobby lawmakers on 33 pieces of legislation, including several data center bills and matters related to antitrust and artificial intelligence. The company spent more than $1.7 million lobbying in California during 2025. AI company Anthropic, which sent its first lobbyists to Sacramento last year, has spent nearly $90,000 to influence California Legislature decisions so far in 2026, and according to the Financial Times, nearly tripled its federal lobbying spend in the same period.

Utility giant Pacific Gas and Electric (PG&E) is leading the spending effort. The company spent $2.86 million lobbying in California between April and June 2026, its second highest quarterly spend since 1999, surpassed only by 2018, the year of the deadliest wildfire in state history. A PG&E spokesperson said less than 5% of the company's spending was on data center-related issues, amounting to approximately $143,000. Other utilities like Southern California Edison and unions representing utility workers have also invested in lobbying efforts on the bills.

Industry groups serving as proxies for Big Tech are also spending heavily. Silicon Valley Leadership Group, which represents companies including Apple and Amazon, has spent over $100,000 lobbying on various data center measures this year and is on track for its highest annual lobbying spend since tracking began in 2005. The Data Center Coalition, which counts Google, Microsoft, and OpenAI among its members, has logged its second and third highest-ever spending quarters so far this year, spending roughly $60,000 to voice opposition to nearly every bill that would regulate data centers.

What Specific Bills Are Being Debated in Sacramento?

Seven data center bills are heading toward approval in the California Legislature, each targeting different aspects of facility regulation. The measures include:

• Cost-Shifting Bills: SB 1168, SB 886, and AB 2383 would shift electric infrastructure costs toward data center operators and away from residential customers
• Disclosure Requirements: AB 2469, AB 1577, and AB 2619 mandate disclosures or estimates of water usage and sometimes other resource consumption
• Environmental Review: SB 887 would require all data center projects to undergo environmental reviews and offer fast-tracked approval for facilities meeting water and energy conservation standards

Industry opponents argue these bills would stifle tech companies' ability to innovate and compete, tie up critical infrastructure in red tape, and unfairly burden data center construction compared to other project types. However, advocacy groups counter that transparency is vital to protect the environment and public resources, and that everyday consumers should not bear increased infrastructure and utility costs.

Why Are Utilities So Invested in Blocking These Bills?

Utilities have particular financial motivation to influence the legislation. The development of new data centers represents a historic opportunity for expansion and grid upgrades, according to Matthew Freedman, senior staff attorney for The Utility Reform Network. Under the current regulatory framework, the cost of expanding transmission lines is spread across all grid users, meaning everyday consumers foot the bill. Several of this year's data center bills would change that arrangement by shifting costs back toward data center operators.

"The groups that have been the strongest opponents of the bills this year include the proxies for the data centers and the tech companies. They serve as a mouthpiece for the tech industry," explained Matthew Freedman, senior staff attorney for The Utility Reform Network.

Matthew Freedman, Senior Staff Attorney, The Utility Reform Network

What's at Stake Beyond California?

The outcome of California's data center regulation debate carries national significance. Advocates and lawmakers agree that California's approach could serve as an important bellwether for how similar fights will play out in other states. By the end of September, Governor Gavin Newsom will decide whether to sign or veto the bills that clear the Legislature. The fate of these measures could have far-reaching consequences, affecting not only data center development but also environmental regulation, utility rates, and how freely California's tech giants can operate in the state.

Silicon Valley Leadership Group CEO Ahmad Thomas told CalMatters that he sees public debate over data centers as fueled by "strong anti-AI sentiment," and that industry groups like his aim to "ground the conversation in reality" about the ways consumers rely on data center infrastructure for everyday services. This framing reflects the broader tension between AI industry expansion and public concerns about resource consumption and environmental impact.

Ahmad Thomas