By Wes Benedict, Founder, Libertarian Booster PAC
August 6, 2026
[Download the full report (PDF) — 5 pages, printable]
Data centers are simply large buildings full of computers connected to the internet. They process bank transactions, stream YouTube videos, host websites, store our photos, make Bitcoin work, and increasingly power artificial intelligence services like ChatGPT, Claude, and Grok.
Without data centers, much of the modern internet simply wouldn't function.
Data centers are not good or bad. They are simply another way people use private property to provide products and services that other people voluntarily choose to buy.
Only a few years ago, politicians were competing to attract data centers to their states. They offered tax incentives, held ribbon-cutting ceremonies, and talked about the jobs they would create.
Now many of those same politicians are trying to stop them.
Recent national surveys show that most Americans oppose building new data centers in their own communities. Texas Governor Greg Abbott recently called for a pause on new data center connections to the electric grid. The City of San Marcos has banned new data centers, and several Texas counties have considered moratoriums or other restrictions.
So what's the big deal, and what should Libertarians think about data centers?
The Libertarian Position
The Libertarian position on data centers is actually very simple.
- Keep the government out of it.
- Let free enterprise work.
- Respect private property rights.
- Allow people to voluntarily buy and sell land, electricity, and services.
- Treat data centers the same as any other business.
The guiding principle is simple:
Data centers should receive no special favors and no special punishments.
Treat them the same as any other peaceful business.
Why Are Data Centers Suddenly Controversial?
Until recently, most people never thought much about data centers. They were smaller, used less electricity, and rarely attracted attention.
The biggest reason they have become controversial is artificial intelligence.
AI requires enormous amounts of computing power. Companies are building much larger data centers than ever before, and those facilities use enormous amounts of electricity. As a result, governments are becoming much more involved in deciding where they may be built and how they receive electricity.
Is Artificial Intelligence Good or Bad?
Some people love AI. Others are afraid of it.
Like data centers themselves, I don't think AI is inherently good or bad.
I think of AI much like other major technological advances such as fire, the printing press, the Industrial Revolution, computers, and the internet. Each of those inventions made people far more productive. AI is simply another tool that allows people to accomplish more.
Personally, I first used AI to edit my writing. Then I used it to help write Excel formulas. Later I began asking it to review graphic designs and suggest improvements. Today I often use it as a personal tutor when I'm learning something new, such as website design or graphic design.
Will AI eliminate some jobs?
Absolutely.
But that has been true throughout history whenever people invent better tools. New technology allows people to produce more with less effort, raising our standard of living over time. While some jobs disappear, new ones are created, often jobs that were difficult to imagine beforehand.
One concern I often hear is that governments may use artificial intelligence to spy on people, track their activities, invade their privacy, or otherwise violate individual rights.
That concern is legitimate.
Libertarians should strongly oppose governments using AI to violate people's rights, just as we oppose warrantless surveillance, censorship, and other abuses of government power.
But that doesn't mean we should ban AI itself.
Governments can misuse many technologies. They can misuse computers, cell phones, cameras, facial recognition, drones, or even automobiles. We don't ban those technologies simply because governments might abuse them. Likewise, governments sometimes misuse firearms, but Libertarians don't advocate banning guns because of that.
The problem isn't the technology.
The problem is government violating individual rights.
Libertarians should oppose government abuse of AI while continuing to support people's freedom to peacefully develop and use AI in the private sector.
Property Rights
The real Libertarian issue isn't artificial intelligence.
It's property rights.
Imagine a ranch owner wants to sell part of his land to a company that wants to build a data center.
If both parties voluntarily agree, why should the government stop them?
Many people say, "The community should decide what gets built here."
That sounds reasonable at first, but think about what it really means.
If the community gets to decide whether a peaceful business can use someone else's property, then the property owner doesn't fully control his own property. The government has substituted the preferences of the community for the decisions of the owner.
Libertarians believe property owners should generally decide how to use their own property.
The government's job is to protect individual rights, not decide which peaceful businesses people may operate.
Property Rights Also Have Limits
Property rights don't mean you can do anything you want.
If a data center sends excessive noise, pollution, or some other physical harm onto neighboring property without permission, it violates those neighbors' rights.
Those are legitimate legal disputes.
The solution is to protect everyone's property rights, not prohibit an entire type of business.
If neighboring property owners voluntarily negotiate agreements or easements, that's their decision to make, not the government's.
Tax Incentives
Libertarians should oppose special tax breaks for data centers.
Actually, Libertarians should oppose special tax breaks for any industry.
If government taxes people at all, it should tax everyone equally at low rates instead of picking winners and losers.
It's encouraging that many Texas leaders who once promoted tax incentives for data centers are now questioning those subsidies.
Libertarians opposed them before, and we should continue to oppose them now.
Electricity Makes Things More Complicated
Electricity is where this issue becomes more complicated.
In a truly free market, there wouldn't be much to debate. Data centers would simply buy electricity from willing sellers, and the market would work out prices, investment, and supply.
But that's not the system we have.
Texas calls its electricity system a market, but it isn't a true free market.
The Texas Legislature creates the rules.
The Public Utility Commission regulates much of the system.
ERCOT operates the electric grid that serves most of Texas.
Utilities receive government-created monopolies in many parts of the state.
Because government is already deeply involved in electricity, government inevitably becomes involved when extremely large new customers like data centers want to connect to the grid.
Questions arise such as:
- Who pays for new transmission lines?
- Who pays for new generating plants?
- Should existing customers subsidize new customers?
- Should large users be interruptible during emergencies?
Those are legitimate policy questions because the electricity system is already heavily regulated.
Even here, the same Libertarian principle applies: don't create special rules just because the customer happens to be a data center. Apply the same rules fairly to everyone.
Equal Treatment
Even in today's regulated electricity system, Libertarians should still follow one basic principle.
Treat data centers the same as everyone else.
Don't give them special subsidies.
Don't give them special penalties.
Don't create rules just because some people happen to dislike data centers.
If a manufacturing plant, refinery, Walmart distribution center, semiconductor factory, or data center all need electricity, they should generally play by the same rules.
Government should not pick winners or losers.
What About America Competing with China?
Some people argue that America needs more AI and more data centers to compete with China.
Others say we should stop data centers from being built.
As a Libertarian, I generally support free trade and free markets. Businesses should be free to locate wherever the market leads them.
But people who want more industry and manufacturing located in America should recognize that banning or severely restricting data centers simply encourages those investments to move somewhere else.
Demand for AI isn't going away.
If Texas says no, companies will build somewhere else.
Bottom Line
Data centers are not fundamentally different from factories, warehouses, office buildings, or shopping centers.
They are simply another productive use of private property.
The Libertarian position is straightforward.
- Protect property rights.
- Oppose special tax subsidies.
- Oppose special restrictions.
- Treat everyone equally under the law.
- Allow voluntary exchange.
- Let free markets work.
Data centers should receive no special favors and no special punishments.
As Republicans and Democrats become increasingly divided over data centers, Libertarians have an opportunity to offer something different: a consistent, principled approach that respects property rights and allows peaceful people to make their own decisions.
Featured photo: Geoffrey Moffett / Unsplash.