Gov. Josh Shapiro takes a hard line against ‘predatory’ data center developers in Pennsylvania

Pennsylvania Gov. Josh Shapiro announced significant restrictions on data center projects Tuesday, signing an executive order to stop “predatory” backers and “bad proposals from infecting our commonwealth.”

The order, along with the warnings in his remarks for potential data center developers, marked a notable shift for Shapiro, a potential 2028 Democratic presidential contender, who had sought to encourage the industry’s build-out in his state.

“I’ve heard loud and clear from the good people of Pennsylvania as I’ve traveled our commonwealth, and I’m here to say today that we will not be bullied by these developers,” Shapiro said. “We will not be bulldozed by the lawyers working for these big tech companies. That will not happen in the commonwealth. We have a long history in Pennsylvania of industry running roughshod over our communities to make a buck — that stops with me.”

The new order mandates that data center projects must first be approved by local officials. Developers must also sign a legally binding order in which they commit to guidelines Shapiro laid out in February — which were first reported by NBC News — among them that they pay for their own power, hire locally, be transparent with local governments and adhere to high water-conservation standards.

Shapiro also said that he is removing all data center projects from his state’s fast-track permitting program and that going forward, they would be ineligible for those measures. He also said nondisclosure agreements for data center projects will not be allowed in the state under his new order.

Shapiro said in his remarks that since it announced two major data center projects in the state last year — Amazon-backed developments he touted — the state has “seen an unacceptable number of speculative proposals for data centers swamp our commonwealth — many of them led by developers who have no regard for local communities.”

Shapiro, who also faces re-election this fall, has evolved his views on data centers within the last year as the projects have faced increasing opposition in the state and nationally. Last week, The Philadelphia Inquirer wrote about how Shapiro’s early embrace of the projects was testing his high approval ratings with voters who are skeptical of the developments.

00:18

This is what it sounds like to live near a data center

00:0000:00

Even in announcing guidelines this year to manage the data center boom, Shapiro framed the need for Pennsylvania “to play a leading role” in the battle for AI supremacy against China. He said that “no sector of our country’s economy is growing faster than data centers and artificial intelligence,” though the U.S. needed to be “selective” about the projects it pursued.

He took a much different tone Tuesday, criticizing “speculators” in the industry for “scaring our communities” and “being aggressive with township officials, bullying our neighbors, our fellow Pennsylvanians, and refusing to listen to the people.”

“They’re threatening to fundamentally change the character of our communities,” he said, adding that the lack of legislative progress on passing new regulations for data center development — Pennsylvania’s Legislature is under split control — left him no choice but to move on the executive order.

He called out specific data center proposals he has opposed, one of them in Montgomery County, where he lives, saying a developer was trying to “bully his way into forcing data center projects through local opposition from the community and local officials.”

“I’m a hell no on that project,” he said, adding, “I’m a hell no on many other projects.”

Repeatedly, he credited his evolution on data centers to conversations he has had with concerned Pennsylvania residents, saying the “feedback I’ve gotten ... has shaped my perspective on this.”

Democrats and Republicans both are recalibrating on data center development as opposition has ramped up across the midterm landscape. Opponents have expressed concerns about the potential for rising power bills, environmental worries or fears over the growth of AI technology, among other concerns.

In New York, Democratic Gov. Kathy Hochul last month signed a moratorium on data center development, while in Texas, Republican Gov. Greg Abbott paused audit data center projects this month.

In multiple contested general election fights across the map, candidates are battling over whether they support full-scale moratoriums on the developments, favor greater local control or want to extend incentives for further development.

The rapid growth of data centers, which are needed to power the AI boom, has been a core component of President Donald Trump’s economic agenda. His administration has promoted the “Ratepayer Protection Pledge,” in which developers who have signed on fund the cost of increased power generation and infrastructure for the developments. Trump has in recent weeks argued for voters to give the developments a warmer embrace, touting benefits that come with them.

FOR SUBSCRIBERS

The industry has pointed to potential job growth and increased tax revenue for localities that accept the developments, as well as potential property tax cuts, among other incentives. Leaders have also argued that environmental concerns have been overblown or are based on faulty data.

“Part of the challenge here is how quickly the industry has moved,” Dan Diorio, executive vice president of state policy and government affairs for the Data Center Coalition, said in a recent interview.

“And so the opposition, I think, has moved just as quickly,” he added. “Now it’s coming upon us and certainly others to bring the facts and the data to bear but also be out there and demonstrate how this industry invests in the communities for the long term.”

Following his announcement Tuesday, Shapiro was asked whether he regretted his state’s earlier approach to data center development.

“Again, there are only about five projects that have even received permits to go forward,” he said. “The problem is there’s 100 projects or so that are wreaking havoc on our communities that are never going to be built. What we’re doing today is taking concrete action to listen to the voices of the people, to put local leaders back in charge of their communities and to make very, very clear what the rules of the road are to be able to do business here in Pennsylvania.”