The Goldwater Institute (GI) issued a report warning that the future of data centers in Arizona is at risk due to local overregulation. GI pointed to “restrictive” policies by local governments that discourage businesses from choosing to expand in the state.
“Data centers are the physical backbone of cloud computing, artificial intelligence, digital commerce, and national security,” said William Beard, Municipal Affairs Liaison at the Goldwater Institute and co-author of the report. “They are core infrastructure, no different in principle from transportation networks, energy production, or large-scale agriculture built to meet the demands of a particular era. Arizona is thriving as a leader in data centers, the state is reaping the economic benefits, and policymakers must take steps to ensure that continues.”
GI said “the Greater Phoenix area now ranks near the top of U.S. data center markets and is projected to exceed 5,000 megawatts of capacity — an expansion of more than 500 percent.”
However, “Restrictive zoning and ad hoc permitting do not eliminate demand for digital services,” GI said. “They simply push investment elsewhere and raise long-term costs for consumers who will still rely on the same cloud platforms, AI tools, and digital services — only now imported at a premium.”