The Federal Takeover That Skipped the Senate

When the Senate voted 99 to 1 to reject a ten-year ban on state AI regulation last November, the federal preemption project looked dead. California Senator Scott Wiener called it what it was.

one Federal Standard instead of a patchwork of 50 State Regulatory Regimes. — Donald Trump

The draft executive order had been audacious — a federal AI standard that would have let the Justice Department sue noncompliant states and withhold $42.45 billion in broadband funding. The Senate killed it so decisively that the White House shelved the order entirely. ^[1] But the preemption project never needed the Senate. While the broad regulatory track was collapsing in public, a second, narrower track was already moving through agencies that do not answer to a floor vote. That track is advancing, and it is reshaping who decides where America's AI infrastructure gets built. In June, the Federal Energy Regulatory Commission issued show-cause orders to six regional grid operators — PJM, MISO, SPP, CAISO, ISO-NE, and NYISO — requiring them to reform their tariffs for large energy users.

We are setting the stage for a resilient, reliable and forward-thinking grid that empowers communities and safeguards consumers by transforming the way large energy users access the grid. — Federal Energy Regulatory Commission

The orders did not emerge from FERC's own docket. They followed a directive from Energy Secretary Chris Wright, who had written to the commission in October 2025 asking it to accelerate grid connections for AI data centers. Wright framed the request in explicit terms. ^[2]

an unprecedented expansion of federal control and intrusion on the states' historic retail regulatory authority — Mark C. Christie

Former FERC Chairman Mark Christie, who served on the commission at the time, identified what was happening.

getting large load interconnection right is a generational opportunity that's key to winning the AI race, reshoring American manufacturing, and keeping electricity reliable and affordable for everyone. — David Rosner

The mechanism is straightforward. By designating data centers as "critical national security infrastructure" in April, the administration gave itself a legal basis to override the state and local authorities that have historically controlled grid siting and permitting. ^[3] Trump made the rationale plain.

America is the country that started the AI race and as President of the U.S. I'm here today to declare that America is going to win it. — Donald Trump

The infrastructure track also runs through military land. The Army has leased sites at Fort Bliss in Texas and Dugway Proving Ground in Utah — $2 billion each, to Carlyle and CyrusOne respectively — in exchange for computing power. ^[1] The deals bypass local zoning entirely: a city council cannot block a data center on a military base. Though even here, the path is not frictionless — Representative John Garamendi has warned against degrading federal facilities, and Representative Cory Mills passed an amendment blocking the use of components from China, Russia, Iran, or North Korea in military-based data centers. Now, the hinge. The China-competition framing that justifies overriding local moratoriums through FERC is the same framing the administration uses to justify canceling federal AI safety oversight. In May, Trump scrapped an executive order that would have required developers to share frontier models with the Treasury Department and the NSA before release. The decision followed lobbying from Elon Musk, Mark Zuckerberg, and David Sacks. Trump's explanation:

Because I didn't like certain aspects of it, I postponed it... We're leading China, we're leading everybody, and I don't want to do anything that's going to get in the way of that lead. — Donald Trump

The same national-security urgency that overrides a town council's zoning authority also overrides the federal government's own safety rules. The framing is deployed to speed the buildout and to strip guardrails — never to pause either. ^[4] Then there is the second hinge, the one that scrambles the usual partisan map. Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez introduced the AI Data Center Moratorium Act, demanding what Sanders called "democratic oversight" and a federal pause on all large-scale data center construction. ^[5]

We need serious public debate and democratic oversight over this enormously consequential issue. — Bernie Sanders

A national moratorium is also a federal override of local decisions. It would stop not only the projects a community opposes but also the ones it has chosen — like the $20 billion campus the Joliet City Council approved 8 to 1, citing $2.1 billion in local tax revenue over thirty years. ^[6] The Sanders-AOC bill and the FERC show-cause orders are opposite in intent but identical in structure: both pull a decision that used to belong to city councils and state utility commissions up to Washington. The local level is where the consequences land. Cle Elum, Washington, passed a six-month moratorium. Louisville, Kentucky, is advancing a 180-day freeze toward an August 13 vote. La Crosse, Wisconsin, imposed an 18-month moratorium on facilities over two megawatts. ^[7] In Indianapolis, thirteen rounds were fired into a city councilman's home amid disputes over data center development. ^[8] These are the rooms where the decision used to sit. Neither federal track — the one racing to build, the one demanding a pause — is offering to put it back.