AI Climate Director Vote Guide

The data center boom is driving an insatiable demand for power. Companies and investors are pouring trillions of dollars into data center development in the next several years, with the four major hyperscalers planning to spend nearly $700 billion in 2026 alone. Current modeling projects that US data center demand will grow from 176 terawatt-hours (TWh) in 2023 (4.4% of total US electricity consumption) to 606 TWh (11.7%) in 2030. The largest data centers, such as Meta’s Hyperion and xAI’s Colossus complex, are each slated to consume as much as 5 GW – enough to power the San Diego metro area. 

Energy companies are scrambling to build new generation to meet the technology sector’s desire for speed-to-power. Energy experts have shown that it is in fact possible to meet data center power demand through a combination of demand flexibility, renewables, and storage. Wind, solar, and batteries are cheaper in many cases than new gas and existing coal plants, have shorter lead times, and avoid negative climate, health, and environmental impacts. Yet energy and tech companies – bolstered by a federal policy environment that champions fossil fuels and stymies climate action – have largely turned to natural gas and coal to power AI. Fossil fuels already supply over 55% of electricity for US data centers. The Union of Concerned Scientists estimates that under current trajectories, the US will add a staggering 335 GW of gas-fired generation by 2050 and increase power plant CO2 emissions by as much as 29% by 2035. Current projects that are in development would increase the US gas fleet by nearly 50% in the medium-term.

As detailed in Majority Action’s recent memo, Expanding Fossil Fuels to Power Data Centers, the largest regulated electric utilities are planning to add more than 73 GW of new gas generation by 2040 to meet contracted and projected data center demand. Three of the largest electric utilities serving the Southeastern data center corridor – Duke, Southern, and Dominion – are delaying the retirement of more than 16.3 GW of coal well beyond 2035. Faced with long interconnection queues, tech companies and data center developers are increasingly turning to “behind-the-meter” gas plants that will supply power directly to data centers, bypassing the electric utilities and in some cases disconnecting from the grid altogether. This fossil-powered “shadow grid” has drawn a new cast of corporate actors into the power generation business, including oil supermajors Chevron and ExxonMobil, which are building co-located power plants for data centers in areas that are strategically located near major natural gas production regions.

Given the 30 to 50-year lifespan of gas plants, this massive gas-fired buildout is likely to lock in emissions for decades to come, delaying current and future transitions to clean energy. Oil and gas companies and electric utilities claim they will abate the emissions from new gas-fired generation through carbon capture and storage, but by their own admission, this solution may never materialize if what is currently an untested technology proves to be commercially unviable.

Many of the aforementioned companies are also backsliding on climate commitments. Chevron, for example, dropped its net-zero by 2050 ambition – noting that “many of the necessary advancements in technology, policy, and collective action have not occurred” – while simultaneously lobbying for policies that would expand fossil fuel production. AEP is “re-assessing” its net-zero by 2045 target in light of its all-of-the-above strategy to serve data center demand, while Southern Company has stated that it will be “extremely challenging” to meet its medium-term 2030 emission reduction targets due to data center load growth.

The fossil-fueled data center boom is intensifying system-level climate risk. A plethora of studies suggest that climate change negatively impacts the portfolios of long-term diversified investors by depressing growth and productivity, triggering economic shocks, and fueling social and political unrest. These investors should be alarmed by the fact that the AI revolution, which will dramatically reshape economic activity for decades to come, is being built on the foundation of value-destroying fossil fuels. 

AI-driven fossil fuel expansion also exacerbates system-level inequality risk, which itself is a force multiplier that magnifies the effects of climate change. Data centers and the gas plants that serve them are increasingly built in environmental justice communities that have long been reduced to “sacrifice zones” of fossil capitalism. Developers seek out these areas because of the opportunity for “regulatory arbitrage”: Many of the communities most impacted by data center development have fewer avenues for successfully blocking projects because they have been systematically locked out of political power and live in jurisdictions where there is less access to regulatory recourse. These communities, which are being subjected to increased air pollution, water scarcity, negative public health impacts, and higher utility bills, are disproportionately bearing the social costs of the AI buildout. 

The decision to power AI with dirty fossil fuels also poses idiosyncratic and sectoral risks to tech companies, data center developers, and energy companies. 65 percent of Americans oppose the building of an AI data center in their community, and $64 billion of data center-related projects have been blocked or delayed due to local opposition. Failure to heed community concerns could amplify exposure to operational, financial, and reputational risk.

Majority Action’s 2026 AI Climate Vote Guide

Majority Action's 2026 AI Climate Director Vote Guide recommends against key directors at US energy companies that are expanding fossil fuels to power the data center boom.  Instead of making clean energy the backbone of the AI buildout, electric utility companies are responding to data center demand by constructing massive amounts of new gas generation and delaying retirement of coal plants.  Meanwhile, the oil supermajors are helping stand up data centers at breakneck speed by building behind-the-meter gas plants while doubling down on upstream capex strategies that are wholly incompatible with the IEA's Announced Pledges Scenario  (APS, 1.7°C). Many energy companies have yet to set net-zero and medium-term emissions reductions targets, and those that have are reneging on them. These companies are driving system-level climate risk and inequality risk by locking in carbon emissions and burdening environmental justice communities with poor air quality and higher utility rates. 

Investors should seek to mitigate these risks this proxy season by voting against directors at companies implicated in the AI fossil fuel expansion who are responsible for oversight of climate risk and capital expenditure strategy.