Geography and Politics Shape Future of AI Data Centers in Red States

Earth movers are busy preparing a site for a massive 2.5 million square foot artificial intelligence data center in Independence, Missouri. As Democrats show increasing hostility towards the AI and energy sectors, Republicans have potential opportunities to bolster American technological leadership. The shift to new computing needs aligns well with rural areas in red America, promising economic revival in these regions.

A combination of geographical factors benefits these areas. Land costs, grid capacity, and the physical mechanics of heat dissipation make developing red states advantageous. Google recently agreed to a $4.3 billion deal to reopen a nuclear power plant in Iowa and enhance several others. The company has entered a long-term power purchasing agreement, with electricity from the first upgraded plant expected by 2028.

The trend shows an increasing shift of data centers towards rural development. Planned infrastructures by 2028 are located an average of 175 kilometers from major cities, compared to just 46 kilometers for previous generations. This favors Republican-dominated states as AI infrastructure relies more on geography than the physical location of software engineers.

Corporations seek to build in red America due to affordable acreage, manageable regulation, and competitive industrial power prices. Locations with a regulatory-friendly environment and ample land attract new investments. JLL’s analysis reveals that most new data centers are in states that supported President Trump in 2024. Two-thirds of these facilities are set for rural counties, primarily in the South, highlighting a significant business migration.

This economic surge stands to benefit many Republican constituents. Loudoun County, Virginia, holds the title for the world’s largest concentration of data centers. It will receive $1.3 billion in taxes from these centers and related industries next year, constituting about 40 percent of county revenue. This income funds various public projects and reduces residential property taxes by 30 percent. Local authorities report that data centers support 15,000 jobs.

Geographical benefits are not the only factor. Red-state utility commissions and legislatures enhance these advantages through efficient permitting processes. Favorable conditions converge in Republican-supported regions rather than Democratic regions. An analysis by the Pacific Research Institute highlights California’s struggles. California’s move towards 100 percent green electricity by 2045 includes closing the Diablo Canyon nuclear plant, causing energy shortages that hinder data center growth.

Democratic energy policies result in higher costs and increased legal risks, stifling economic growth opportunities. These regulations act as barriers to a key economic growth source. Ideological constraints on energy risk giving strategic advantages to foreign competitors like China, which expands energy supplies without hesitation. Some Democrats are not only creating regulatory challenges but also advocating for outright bans. Notably, Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders proposed a moratorium on new AI data center construction, which could cede economic advantage to China’s pro-technology stance.

Despite America leading in AI software, algorithms, and model development, energy infrastructure issues could undermine this. A data center might take two years to build, but major transmission lines require up to 15 years. This creates policy bottlenecks. Reliable and abundant electricity is crucial; without it, AI models cannot expand.

Republicans are positioned for a political advantage if they champion pro-growth policies that favor red state economies, while securing U.S. technological predominance. Their proactive stance could greatly enrich these communities, highlighting a strategic opportunity.

Andrew Follett analyzes research for a Washington-based nonprofit.