There’s one thing for sure: politicians are going to make artificial intelligence a major issue in the 2026 midterm elections. Politicians on both sides of the aisle have turned artificial intelligence, and especially data center development, into a political football. It’s easy to do because data centers are often enormous, and in the local areas where they are built, they can dominate water and electricity usage.
But is AI really to blame for what’s happening to electric prices, or is it just a new hype story? You may remember the 2011-2012 election cycle, when the media was filled with warnings that hydraulic fracturing of oil and gas wells would foul the water and make everyone sick. Laws were passed banning fracking in places like New York, and major economic benefits were denied to people who could otherwise have made a lot of money from selling the oil and gas under their feet.
It is apparent today that the hype was just that, hype; a manufactured political sideshow to make people angry, and to get them to vote a certain way. The EPA found in 2015 that there was no broad threat from fracking, but that there was the potential for local problems if safety was ignored. That is probably a good description of nearly every economic endeavor.
So is the hype around artificial intelligence more of the same? Only time will tell, but all political storylines should be taken with a grain of salt. There are industries that use vastly greater amounts of water than data centers (agriculture, for one). And rising electricity prices aren’t terribly surprising given the continued destruction of power generation from the cheapest fuel source, coal. President Barack Obama declared war on coal, saying his plan would “bankrupt” coal-fired power plants and that “electricity rates would necessarily skyrocket.” Well, they did. And artificial intelligence didn’t have anything to do with it.
Action Line: Rising prices for electricity aren’t new, but politicians are eager to create a hype story around AI to deflect from their own complicity in why those prices are high. Keep a clear head amidst the coming political banter about AI, electricity prices, and the future. Click here to subscribe to my free monthly Survive & Thrive letter.
