Pennsylvania Issues First US Executive Order Regulating AI Data Centers

The Governor of the US state of Pennsylvania issued Executive Order No. 2026-05, making it the first executive order in the United States to impose transparency requirements on AI data center projects. The order prohibits signing non-disclosure agreements in deals related to these projects and requires obtaining local government approval before construction begins.

The order also mandates that data center developers bear the full cost of any new electrical infrastructure required by their projects, rather than placing this burden on consumers through electricity bills, addressing one of the major grievances of communities surrounding these projects.

This executive order comes at a time when major tech companies are aggressively expanding the construction of new data centers to meet the growing demand for artificial intelligence. These projects spark widespread controversy due to their massive consumption of electricity and water and their impact on local power grids.

Pennsylvania's executive order sets a model that other states could follow in regulating the wave of data center construction. What makes its impact far-reaching is that the requirements for local approval and funding electrical infrastructure may slow down tech companies' timelines and increase their costs, potentially redirecting investments toward states with more flexible regulations.

What do these terms mean?

Data Center: A massive facility housing thousands of servers that run artificial intelligence applications and cloud services, consuming enormous electrical power that sometimes equals the consumption of an entire small city.

Electrical Infrastructure: The networks, stations, and cables required to deliver electricity from sources to consumers; expanding it is costly and takes years.

Non-Disclosure Agreement in Government Deals: A clause preventing the disclosure of deal details between the government and a private company, reducing public oversight over government spending and infrastructure projects.