Arizona's data-center boom has become a campaign issue ahead of the Nov. 3 election, with Attorney General Kris Mayes calling for a temporary halt to new projects and Republican challenger Warren Petersen opposing a moratorium. The dispute raises a question for a state attracting AI infrastructure: how much pressure should residents bear as demand for electricity and water grows?

At a Sept. 23 Clean Elections debate, Mayes asked, "Do we want to be the data center capital of the world?" She argued that communities should have a greater say in where facilities are built and called for a statewide pause until Arizona develops a plan to manage the industry's growth.

Petersen rejected a moratorium, arguing that Mayes's approach would increase costs and discourage investment. But he also acknowledged concerns about data-center locations, electricity and water, saying communities should help decide where facilities are built and developers should take responsibility for their resource use.

Mayes's office reported 110 active data centers in Arizona, with another 10 under construction and 40 in planning stages. At an October town hall, she said that building all the planned Phoenix-area facilities could increase pressure on local water supplies by 32%. That figure is an estimate cited by her office, not an independently established measure of the projects' eventual impact.

The concern comes as Arizona faces tighter Colorado River water supplies. The federal government has cut the state's allocation by almost 30%, according to Mayes's office. Data centers did not cause that wider shortage, but additional demand could intensify pressure on local supplies, depending on where facilities are built and how they obtain water for cooling.

Electricity costs have become another point of contention. Arizona Public Service (APS) and Tucson Electric Power have sought rate increases, while Mayes has argued that expanding data-center demand could require costly infrastructure that ultimately affects other customers.

APS proposed a rate increase of more than 45% for extra-large energy users, including data centers, in its June 2025 rate filing. That figure applies to the large-user category, not household electricity bills. The utility says its proposal is intended to ensure large customers pay the costs of serving them rather than shifting those expenses to families and small businesses.

The disagreement has become more concrete. On Oct. 9, Mayes asked the Arizona Corporation Commission to investigate claims that APS customers may have absorbed nearly $600 million in costs attributable to large energy users between 2023 and 2025. APS disputes the analysis behind those claims. The commission's review will help determine whether the alleged cost shift occurred.

Mayes' proposal does not have unanimous support among Arizona Democrats. Governor Katie Hobbs has rejected a blanket halt on new projects, instead pursuing a narrower policy: a three-year pause on new data-center tax credits.

Hobbs signed the state's 2026 budget in June, suspending the incentives while supporting measures intended to improve transparency and ensure data centers pay their own costs. That approach changes the financial terms for developers without prohibiting new construction outright.

The distinction matters. A construction moratorium would restrict new projects, while a tax-credit pause removes a form of public financial support. Arizona can continue attracting investment while reconsidering how much assistance data-center developers should receive.

Petersen has also argued that communities should determine where facilities belong and that developers should be responsible for water supplies, including through recycling or bringing in their own water. His position suggests that opposing a statewide moratorium does not necessarily mean supporting unrestricted development.

Mayes has acknowledged that she cannot impose a statewide moratorium by herself. She has urged the governor and lawmakers to halt new approvals until the state establishes a plan for managing data-center growth.

That creates a gap between campaign promises and what the next attorney general could implement. Even if Mayes wins re-election, a statewide pause would require cooperation from other parts of state government.

The economic arguments also need project-level evidence. Data-center developers point to investment, construction jobs and tax revenue. Critics want to know how many permanent jobs facilities create, how much they contribute in taxes and whether the public infrastructure required to serve them delivers benefits that justify its cost.

Arizona's Nov. 3 election will help determine who leads the state's legal response to the industry's expansion. But the wider policy question extends beyond the campaign: can Arizona attract AI investment while protecting its water supplies and ensuring residents do not pay an unfair share of the infrastructure costs?