The governor of Maine on Friday vetoed a temporary ban on building large data centers that aimed to rein in rampant construction driven by the AI race.
The buildout comes at a cost, as the power-hungry facilities strain local grids and drive up electricity bills.
Data centers also typically have massive footprints, taking up land that could be used for housing, businesses, recreation or green space.
Legislators in Maine earlier this month endorsed what would have been the first data center ban in the United States if it had been signed into law by Governor Janet Mills.
"A moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates," Mills said in a statement announcing the veto.
Mills explained that her veto was based on the bill's failure to make an exception for a data center project in a part of the northeastern state where the closure of a mill three years ago had been a "devastating" economic blow.
"This decision is simply wrong," said state reresentative Melanie Sachs, a sponsor of the bill.
"By vetoing this bill, Governor Mills isn't just rejecting the advice of her own task force -- she is resisting the will of a majority of Maine people."
Public sentiment is hardening, with a recent Quinnipiac University poll finding 65 percent of Americans oppose having a data center built in their community.
A boom in generative artificial intelligence has sent data center demand skyrocketing, with dozens of projects springing up across the United States.
If it had become a law, the Maine bill would have paused new data center construction until November of next year.
It also called for the creation of a council to assess the risks and benefits of proposed data centers and provide input for planners.
Data center construction spending in the United States has surged in recent years, with tech firms pouring tens of billions of dollars into building out infrastructure amid the race to lead in AI.
Maine is among the US states that have seen home electricity bills soar in recent years, according to the US Energy Information Administration.
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