Data Centers: Alaska’s Next Oil Boom?

Or are the risks too great?

Alaskans face some big decisions: what the natural gas pipeline will cost Alaskans, how to pay for state government, and how to balance land use with resource extraction. Now comes the question of AI data centers.

Alaska has seen several boom-and-bust cycles. Oil has played a big part in our history over the last 50-plus years. Despite the downsides, we know oil provided opportunities for Alaskans and helped establish the PFD. We’ve seen how to balance the good with the bad, and we’ve had to wrestle with the positive and negative impacts. We have the experience to determine how data centers might, or might not, fit into Alaska’s future. Currently, there are as many as 15 proposals to build data centers in Alaska. The AI industry is booming, and the race has started. This is the right time to engage in a discussion.

Lots of questions remain about whether AI data centers belong in Alaska. Who benefits? Is it even possible to build them here? Who decides where they could be built? What will be the impact of federal legislation? Could this be a way to increase state revenues?

Let’s look at what Alaska has to offer. Our cool temperatures reduce the amount of electricity needed for cooling, while Southeast and Southcentral Alaska have the potential to tap hydroelectric power. And across Alaska, there are large areas of open land away from population centers.

Data centers are not all equal in size and scope. They have been around for many years, handling email, supporting banking, powering websites, and serving all kinds of companies. Some serve AI companies, some do not. They can range in size from small data centers like the one operating in Cordova today to the massive AI data center proposed for the North Slope. Their electricity needs are dramatically different.

It’s important to understand where these centers would be located and how they propose to operate before assuming the impacts. So let’s compare three types of data centers to see what’s possible.

The small data center in Cordova is an example of how communities with hydroelectric power could host smaller-scale facilities. It uses excess electricity from the local hydro plant while providing computing services to the community as well as customers in other locations. Like any data center, it depends on reliable, high-speed internet.

Some proposals are for commercial AI facilities on military property. In April 2026, the Department of the Air Force released a Request for Lease Proposal for sites at three Alaska installations. Developers would be responsible for securing electricity, including generating their own power. (Note: as of September 2026, no leases have been awarded.)

Finally, there’s the North Slope AI data center proposal. It would use North Slope natural gas to generate its own electricity, rather than draw power from an existing utility. This could avoid putting additional demands on Alaska’s electrical grids, but would require substantial new infrastructure, including an access road and a gas pipeline. This is one that could have the most potential for revenue statewide.

Are there potential benefits?

Data center construction can provide jobs for Alaskans. Depending on how the data centers are taxed and regulated, they could provide revenue to cities, Native organizations, and/or the state. Building these sites outside of population centers would mitigate possible noise pollution. If a company brought in their own energy sources, there might be a potential to generate excess for the surrounding area. Since they need high-speed internet, data centers might also provide connectivity benefits to cities or schools.

And what are the potential downsides?

There is huge uncertainty about the impacts on water supplies, electrical capacity, and land use. Hydroelectric power could be interrupted due to drought or avalanches and can compete with local needs. Many Alaskans fear an increase to their electricity costs. If data centers are located on military facilities, or closer to population centers, people could be impacted by noise pollution. After construction, there would be relatively few permanent jobs. The North Slope proposal garnered over 500 public comments. Many commenters objected to AI use in general, while others raised specific concerns about gravel use, emissions, impacts to subsistence use and wildlife.

What about regulations?

Who decides what and where data centers can be built? Anchorage has already taken steps to set up policies and guidelines around the installation of data centers. But its municipal codes exempt JBER uses, activities and developments, so the question of who regulates this isn’t clear. Senator Tobin introduced a bill in February 2026, which passed the Senate late in the session and stalled in the House. Perhaps it will be reintroduced next session. Representative Begich introduced a bill in April 2026, the DATA Act of 2026, H.R. 8400, as a companion bill to the one Senator Cotton introduced in the Senate. According to Representative Begich, this Act would allow large-scale facilities to operate independently of local utilities.

This article has only scratched the surface of the debate on data centers. There are more questions to ask yourself:

Does it matter what type of company (AI or not) uses the data center?

Is it possible to separate the opposition to AI from the potential economic benefits as we often do with oil?

Would it change your view if a data center had no impact on the local grid or electricity costs?

How would you compare using Alaska’s land for mining or oil, versus using it for data centers, versus saving it for subsistence use, wildlife, and recreation?

How important is it to you that Alaska diversify its revenue generation?

You decide.

Dig Deeper:

Key Questions on Energy and AI — International Energy Agency, 2026. A broader look at energy demand, electricity prices, environmental impacts, and the potential economic benefits of AI infrastructure.

Anchorage Adopts Framework for Data Centers and Energy-Intensive Uses — Davis Wright Tremaine, April 2026. An understandable explanation of how Anchorage is addressing zoning, electricity, water, and neighborhood impacts.

Alaska’s data center opportunity: A reality check and possible next steps (UAF Alaska Center for Energy and Power). An Alaska-specific analysis from the university’s energy researchers, including comparisons with cold-climate places like Iceland.

In Alaska, a Data Center Inside a Power Plant, Inside a Microgrid — National Laboratory of the Rockies, March 2026. The Cordova story: how a small data center can use local hydropower and provide services to the community.