Virginia Governor Establishes AI Task Force and New Data Center Regulations Amid Growing Concerns

Virginia Takes Bold Steps on Data Center Regulation

Virginia Gov. Abigail Spanberger signed Executive Order 22 on Friday, marking a significant shift in how the state—already home to more data centers than any other—approaches data center development. The order bans executive branch officials from signing non-disclosure agreements for data center projects, a practice that has allowed developers to plan facilities in secret and present them to communities when opposition becomes difficult1

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. Spanberger described the package as delivering "a better deal for Virginians" while holding data center companies and operators accountable2

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The executive order requires expedited noise regulations and a review of backup-generation operations used by data centers. It also pushes operators to invest in local energy investments to offset grid strain and price hikes in the state power grid1

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. Scott Babwah Brennen, director of the Center on Technology Policy at New York University, called it "as comprehensive as this," though he noted the true impact depends on how rules are implemented2

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AI Task Force Established to Address Emerging Risks

Executive Order 22 establishes an AI task force responsible for evaluating how Virginia can address risks to residents, including workforce displacement and data privacy issues. The task force will determine how existing law can be applied to AI harms and recommend legislation for lawmakers to consider next year1

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. Spanberger acknowledged uncertainty about federal inaction, stating, "We simply aren't sure if the federal government is going to act on this—though it is my hope that they move forward with new guardrails as soon as possible"2

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Concern has intensified with the rapid development of artificial intelligence, which drives demand for more data centers while raising alarms about job displacement and security threats. President Donald Trump posted on social media this week that fears about AI and data centers are "a HOAX," decrying efforts to limit them as "a SICK conspiracy"2

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. U.S. House Minority Leader Hakeem Jeffries countered that the threat is real and warned, "we need to act now"2

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Data Center Accountability Framework Targets Future Development

Spanberger unveiled a Data Center Accountability Framework alongside the executive order, outlining additional priorities for Virginia. These include eliminating by-right approval—the kind that existed in Loudoun County for years, allowing developers to build on certain land without additional approvals—removing some state subsidies, establishing environmental safeguards, and protecting residents against increased energy prices associated with data centers1

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The framework creates a "tool kit" for localities to use in negotiations with developers and aims to prevent scenarios where data centers are planned in secret and then sprung on communities2

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. However, the ban on secrecy agreements currently applies only to state officials. Preventing such arrangements among local economic development officials would require General Assembly action, which Spanberger pledged to pursue in the January session2

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Critics Demand Stronger Action on Existing Facilities and Tax Breaks

While environmental groups praised Spanberger's approach, critics argue the measures don't go far enough. The Piedmont Environment Council, a nonprofit advocating for a moratorium on new development, stated the order "largely addresses standards on new data centers and does not deal with what's already built and in the pipeline, along with the ongoing impacts piling up in communities now"1

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. The new requirements apply only to future developments and have no impact on facilities already receiving tax breaks2

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State Sen. L. Louise Lucas criticized the failure to address approximately $2 billion in data center tax breaks, stating, "The Governor is finally feeling the heat but still ignoring the fire"2

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. Lucas nearly blocked passage of the state budget earlier this year over tax breaks but relented when Spanberger and Democratic leaders offered to offset industry incentives with a tax on excessive electricity use2

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. Spanberger has long resisted calls to cut generous tax breaks, warning that fewer data centers could hurt local governments' ability to provide services and expose the state to lawsuits from companies depending on them2

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State-Level Action Accelerates as Federal Response Lags

Virginia's executive order represents the latest signal that states are taking data center regulation and AI policy into their own hands as Congress and President Trump remain slow or resistant to sweeping changes. California Gov. Gavin Newsom issued an executive order Friday convening experts to tackle AI safety issues. Earlier, New York Gov. Kathy Hochul signed a one-year freeze on data centers, and Texas Gov. Greg Abbott took executive action to rein in rapid data center development1

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. Fifteen other states have considered legislation halting data centers, according to the National Conference of State Legislatures2

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The issue has heated up nationally and scrambled ideological lines as grassroots groups fight back against large, noisy, resource-intensive development projects. Virginia's data center development continues from the D.C. suburbs to rural southwest regions, with more constantly on the drawing boards2

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. Watch for how the General Assembly responds to Spanberger's legislative proposals in January and whether other states follow Virginia's comprehensive approach to balancing economic development with community concerns and environmental safeguards.