California Governor Gavin Newsom has signed a package of seven bills designed to regulate artificial intelligence data centres and prevent them from passing utility costs onto residents. The legislation addresses growing concerns about the environmental and infrastructure impact of AI data centre expansion, including excessive electricity demand, grid strain, water consumption, and pollution.

The laws require the California Public Utilities Commission to establish a new rate classification for data centres, whilst compelling operators to fund upgrades to local power grids and water systems. Data centre operators must disclose their estimated water consumption, energy efficiency measures, and drought planning strategies to local governments, and must meet specified energy, water, and fuel consumption standards before qualifying for streamlined approval processes. Governor Newsom also signed a separate executive order to accelerate the development of an AI "kill switch" mechanism.