An under-the-radar interest group representing Big Tech and private-equity-backed data center developers is growing the industry's influence on public policy, as data center construction booms across the country and utilities scramble to meet the mounting electricity demand from artificial intelligence.
The group's efforts might already be paying off, as evidenced by a failed slate of bipartisan-backed data center regulations in Virginia, where the annual General Assembly session will adjourn on February 22.
In the three months between Election Day and the start of the legislative session in January, a political action committee tied to the Data Center Coalition made $165,500 in campaign contributions to state lawmakers, Business Insider found in filings with the Virginia Department of Elections.
The DCC counts major data center operators, including Amazon, Microsoft, Meta, Google, and Blackstone-backed QTS, as members. The group has registered as a lobbying organization in Virginia, home to the world's largest data center market, annually since 2019. While it has always represented the data center industry's interests before Virginia lawmakers, these are the first campaign contributions DCC has ever reported making.
DCC made the contributions between November 16 and January 7, the day before the start of Virginia's annual legislative session. During this time, lawmakers typically talk to lobbyists and write bills.
Data center regulation was expected to be a hot topic at this year's legislative session. Several lawmakers—both Republican and Democratic—introduced bills addressing a wide range of public concerns regarding the industry, from noise pollution to the cost of electricity. Of 27 proposed bills that directly addressed the data center industry, only one passed both the House and Senate.
DCC's donations were made by the Virginia Digital Infrastructure PAC, which was registered in September with the Virginia Department of Elections by Kate Smiley, a DCC government affairs official. The PAC has reported raising a total of $490,000 in funds from a small group of DCC members, including Stack Infrastructure, CloudHQ, Vantage Data Centers, Amazon, Visa, and CyrusOne.
The largest amount, $250,000, came from Stack Infrastructure, which last month was acquired by asset manager Blue Owl Capital from a joint venture started by Iron Point Partners and Iconiq Capital, a multi-family office that serves some of Silicon Valley's most elite names. Amazon, which has made political donations in Virginia under its name, gave $25,000.
Amazon also made a separate donation of $25,000 to Virginia Gov. Glenn Youngkin's Spirit of Virginia PAC on January 4. DCC member Google did not contribute money to the group's PAC, though it made four individual donations of $25,000, split evenly between Democratic and Republican PACs, in December.
"DCC is a nonprofit membership association that does not endorse candidates for public office or participate in political campaigns," Michael Robinson, a spokesperson for DCC, said in an e-mailed statement to Business Insider. "Like many trade associations, DCC established a state and local Political Action Committee (PAC) in Virginia. DCC did so as part of its work to engage on behalf of members and help inform Virginians about the many economic and community benefits data centers provide, as conversations continue about this critical industry and opportunities arise for additional investment, jobs, and supply chain development across the Commonwealth."
Stack, CloudHQ, Vantage, Amazon, Visa, and CyrusOne did not immediately respond to requests for comment.
Virginia's data center bills
Northern Virginia is the world's largest data center market, and much of the industry's early growth occurred there. With demand for AI surging, big data center clusters are now under construction in many parts of the country.
In Virginia, public concern over the industry's energy and environmental footprint has led to heightened scrutiny in recent years.
On the agenda for this year's legislative session, which began January 8, was a bipartisan package of bills that would rein in the industry's rapid expansion amid rising concern over its energy consumption and environmental footprint. Energy use in Virginia is expected to more than double by 2040 due to forecast data center demand, according to a joint legislative report, known as the JLARC study, issued in December. Building the infrastructure needed to support that demand would be "very difficult," the report said.
In addition to the data center package, lawmakers this session considered several bills regarding the Virginia Clean Economy Act, which mandates the state's monopoly utility, Dominion Energy, procure 100% of its electricity from renewable energy sources by 2045.
Data center operators like Amazon and Microsoft are some of Dominion's largest customers in Virginia, meaning legislation regarding the utility's compliance with the VCEA could also impact them.
The tech industry's influence
Campaign contributions made by corporate interest groups ahead of legislative sessions can be used to influence policy decisions, said Brendan Glavin, director of insights at OpenSecrets, a nonprofit that tracks campaign finance and lobbying.
Of the $165,500 in donations made by the DCC's PAC, $50,000 went to House Speaker Del. Don Scott's Democratic leadership PAC. The remaining funds were split between 34 lawmakers in amounts ranging from $1,500 to $10,000.
Glavin said it is " important " to note a large donation to a powerful legislator or an associated group, such as the DCC's donation to Scott's leadership PAC because it can influence which bills move forward and which bills don't.
"It's just like in Congress. The speaker's going to control what moves through, what gets considered," said Glavin.
Donations by an interest group to individual lawmakers made during the countdown to a legislative session can indicate the group is looking to sway specific decisions.
"They're going to have a strategy," Glavin said. "It may be that they know one of these people is on the fence on a data center issue, or they may be trying to convince them to move their position."
Virginia Del. Josh Thomas, who represents a data center-heavy district in Prince William County and sponsored three data center regulation bills this session, said it was hard to know exactly whose influence ultimately quashed the data center legislation.
Thomas said that lobbyists representing Big Tech companies turned out in Richmond this session, and other powerful groups—including organized labor, real estate development, and utilities—also have an interest in influencing data center legislation.
He was not surprised to see that DCC chose to start making campaign contributions this year, ahead of the JLARC study on data centers.
"I think they probably believe that their arguments by themselves might be under attack from another viewpoint, and they're no longer the sole viewpoint in the room," said Thomas of the donations. "Some people think it buys an outcome, and some people think it buys you access or time. Regardless of your philosophic view on campaign contributions, at the very least, it's a signal that other voices are in the room."
Do you work in or have knowledge of the data center industry and have insight to share? Get in touch with this reporter at ethomas@insider.com or reach out via the encrypted messaging app Signal at +1-929-524-6924.
