SACRAMENTO, California — San Jose Mayor Matt Mahan said Wednesday that he concurs with a key part of President Donald Trump’s national AI policy plan: making sure there is enough energy to power the demands of the technology, vital for Silicon Valley.
“One thing the Trump administration has highlighted that I agree with is the emphasis on global competitiveness and the importance of energy supply,” the moderate Democrat said at POLITICO’s inaugural California policy summit.
“Frankly, California has been, in my view, not friendly enough to growth and investment in recent decades, and that’s something we’re trying to change in San Jose.”
Mahan is no stranger to bucking California Gov. Gavin Newsom and other establishment figures in the state. Most recently, he created daylight between the governor’s dismissal of Bed, Bath & Beyond leaving the state due to perceived overregulation, echoing a critique of California’s business climate that is more often lodged by Republicans.
The Trump administration’s AI Action Plan, released in July, calls for exempting energy and data center projects from regulatory processes, including federal environmental reviews. It also directed public lands to be made available for some of that infrastructure.
Mahan said he, too, has been streamlining permits. He touted the city’s data center deals with PG&E, noting that he’s “really worked hard” while in office to reset San Jose’s relationship with the utility and upgrade its grid infrastructure.
“We want investment in advanced manufacturing, data centers to happen in San Jose, in California,” Mahan added. “Because if we don’t have that investment here, we can regulate all we want. The important decisions will be made by innovators in other states and even other countries.”
But Mahan’s aggressive pursuit of new data center projects comes amid fears from California lawmakers that the supercomputer warehouses will undermine affordability and sustainability.
“Is it everyday Californians, everyday rate payers who should be bearing the burden of that cost. Or is it the companies that are making a lot of money?” Democratic state Assemblymember Rebecca Bauer-Kahan said on stage with Mahan Wednesday. “It shouldn’t be hard-working Californians that are subsidizing them.”
Bauer-Kahan is pursuing legislation that would subject data centers to new energy reporting standards aimed at better understanding the supercomputers’ impacts on California’s electric grid. The bill also paves the way for California to impose special electricity rates for data centers, which she argues will minimize possible utility bill spikes that could happen as more data centers join the grid.
Silicon Valley representatives have balked at the bill’s potential costs, warning as Mahan did that it could drive data center investment to other states.
“I’m not opposed to some reporting,” Mahan said. “I do think we need to be careful about singling out specific industries.”
