Artificial intelligence (AI) technology is expanding at a breakneck pace, and with it, there are consequences beyond the obvious.[1] AI requires the construction of data centers where processing can be performed before returning results to end-users.[2] The construction of these data centers results in greater demand on electrical grids,[3] the consumer hardware market,[4] and the environment.[5] Maryland legislators are keenly aware of the impacts these data centers will have as they become a prominent feature of the State’s economic development.[6]

During a special session of the General Assembly, legislators overrode Governor Wes Moore’s veto of a bill proposing a study of data centers – a move that indicates the legislature’s concern about the impact these data centers will have.[7] The study received bipartisan support from lawmakers concerned with the impact the construction of data centers will have in their communities.[8] In particular, construction has already begun on a 2200-acre data center in Frederick County, located near a school and residences, which has given Senator William Folden concerns about the effects of the construction on his constituents.[9]

General Assembly members are expressing trepidation about how the construction of data centers will impact the power grid in terms of reliability and the cost of electricity.[10] Lawmakers have argued that in times of the intense demand on the electric grid, such as hot summer days, it would be unacceptable for residential power consumers to experience blackouts or skyrocketing prices due to the stress these data centers place on the power delivery system.[11] To that end, a coalition of states’ governors served by the PJM Interconnection[12] proposed incentives for data centers bringing their own power generation systems to offset the anticipated stress on the grid.[13] By offering expedited inclusion and preferential treatment during times of heavy power grid utilization, governors are aiming to reduce the strain that other consumers will experience.[14]

As for financial consequences, PJM predicts that in a 6-year period, the peak electrical demand will increase by 32 gigawatts and expects that data centers will be responsible for 30 gigawatts of that uptick.[15] As a result, the power grid would need billion-dollar investments to keep up with demand; investments that lawmakers are concerned would increase the amount average consumers will pay for their electricity.[16] However, the financial impact is not strictly negative. According to a report from the Maryland Tech Council, construction of a data center in Prince George’s County would contribute over $1 billion to the economy while generating $20 million in tax revenue during operation.[17]

Maryland legislators understand that the expansion of data centers within the state, and in neighboring states, is a source of economic growth, but they are approaching the subject with cautious optimism.[18] The benefits are undeniable, but the General Assembly is seeking to ensure that those benefits do not cause an unreasonable drawback on the individual power consumer, by overburdening the power grid to the point of instability and drastically increasing the price of electricity in the region. As data centers continue to expand, Marylanders should expect growing debate and legislation addressing appropriate regulations for data center construction and operation.

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Dillan Moore is a third-year student at the University of Baltimore School of Law and serves as an Associate Editor for Law Forum.  He earned his bachelor’s degree in Psychology with a minor in Biology from the University of Nevada, Reno. Dillan is currently a Law Clerk at Azrael, Franz, Schwab, Lipowitz, & Solter in Towson. After graduation, Dillan plans to return to his hometown of Reno to represent small business owners in his community.

[1] Charles Collyns, Tracking the AI Boom: Some Lessons from Economic History, Econofact (Dec. 19, 2025), https://econofact.org/tracking-the-ai-boom-some-lessons-from-economic-history (on file with the University of Baltimore Law Forum).

[2] John Lester, Why AI Needs Data Centers – and what it Means for Industry Growth, And Cable Products (Apr. 16, 2025),https://andcable.com/cable-management/why-ai-needs-data-centers/ (on file with the University of Baltimore Law Forum).

[3] Christine Condon, In 2026, More Data Center Regulations Could be Coming in Maryland,Maryland Matters (Jan. 3, 2026, 5:32 AM),https://marylandmatters.org/2026/01/03/data-center-regulations-2026/ (on file with the University of Baltimore Law Forum).

[4]Daniel Howley, AI Data Centers are Eating the Memory Industry, and it Could Hurt Your Wallet, Yahoo Finance (Dec. 18, 2025), https://finance.yahoo.com/news/ai-data-centers-are-eating-the-memory-industry-and-it-could-hurt-your-wallet-130814928.html (on file with the University of Baltimore Law Forum).

[5] Condon supra note 3.

[6] Id.

[7]Christine Condon & Danielle J. Brown, Climate Study, Energy Planning, Data Center Bills Become Law After Moore Vetoes are Overridden, Maryland Matters (Dec. 16, 2026, 10:35 PM), https://marylandmatters.org/2025/12/16/general-assembly-climate-veto-overrides/ (on file with the University of Baltimore Law Forum).

[8] Id.

[9] Id.

[10] Condon supra note 3.

[11] Id.

[12] The PJM Interconnection is the largest power grid operator in the U.S., serving Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Washington, D.C. See PJM – At a Glance, https://www.pjm.com/-/media/DotCom/about-pjm/newsroom/fact-sheets/pjm-at-a-glance.pdf (last visited Feb. 15, 2026) (on file with the University of Baltimore Law Forum).

[13] Christine Condon, Lawmakers, Advocates Pitch Plans to Rein in Data Centers, Their Power Demands,(Nov. 17, 2025, 9:40 PM), https://marylandmatters.org/2025/11/17/data-center-plans-maryland-legislators/ (on file with the University of Baltimore Law Forum).

[14] Id.

[15] Id.

[16] Id.

[17] Condon supra note 3.

[18] Condon & Brown supra note 7.