A year of letters, then a 27-page answer
Three Democratic senators have published the findings of a nearly year-long investigation into what AI data centres cost the communities that host them, and the central finding is about a phrase. When the industry says it pays its “full cost of service”, the senators write, it means the infrastructure that serves its own site — not the shared grid upgrades that only exist because the site was built.
Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland and Richard Blumenthal of Connecticut released the report on Thursday under the title Power and Profits: How the AI Data Center Boom Costs Households and Communities. It runs to 27 pages and draws on answers to letters the three sent on 15 December 2025 to Amazon, Google, Meta, Microsoft, CoreWeave, Digital Realty and Equinix, plus a year of interviews with company representatives.
The “but-for” argument
The companies broadly opposed so-called but-for cost allocation — the standard that would make a developer pay for every upgrade that would not have been needed but for its facility. They argued instead that those costs should be shared by all ratepayers.
“[T]he companies commit to paying for infrastructure that solely benefits them, but dispute how much they should pay for shared infrastructure that is paid for by all ratepayers but was only built to accommodate the data center,” the senators wrote.
The report also says that while the companies point to new state regulations as enough to stop costs being shifted onto consumers, they lobby state legislatures for more favourable terms, “including through playing states off of each other by threatening to move elsewhere”.
Non-disclosure agreements, and what they are for
On secrecy, the report says all four of the Big Tech companies surveyed routinely request non-disclosure agreements from utilities, landowners, commercial partners “and in some cases even government officials”. Several, it says, explicitly acknowledged that the goal of an NDA with a public official is to limit public scrutiny by keeping the local community from learning about a project.
Meta told the investigation that “[m]aintaining confidentiality during project development increases efficiency and speed by enabling all stakeholders to remain focused on the needs of a proposed project” — a sentence the senators read as excluding local residents from the list of stakeholders.
Tax breaks, and no job numbers
The third finding is about subsidy. The developers downplayed or avoided acknowledging the tax incentives they receive, the report says, but in practice seek them out, and told the inquiry they will keep requesting and accepting sales tax exemptions on chips and other equipment — what the report calls the most valuable form of tax break available to a data centre.
None of the seven companies, the senators write, was able or willing to provide comprehensive quantitative evidence of full-time job creation at their facilities.
What happens next
The report’s conclusion is blunt: the industry “is bulldozing local communities and using their economic resources to play states and local communities against one another, creating a race to the bottom in which state and local policymakers feel they have no choice but to accede to the data centers’ demands — and leaving ordinary citizens stuck with the bills”.
These are the senators’ own findings, not an independent audit, and the companies have argued in public that large grid investments such as new power plants and transmission lines do benefit other customers. Time, which reported the findings first, said they are expected to feed a broader push in Congress over the coming year to put guardrails around power-hungry data centre projects. The thing to watch is whether a but-for standard turns up in an actual bill.
