AI's $7 Trillion Data Center Boom Meets Its First Reckoning: Senator Tim Scott Calls In Kevin Warsh

The AI industry's insatiable appetite for computing power is about to get a hearing in the Senate — and the witness list includes a former Federal Reserve governor who could reshape how Washington thinks about the trillion‑dollar data center build‑out. Senator Tim Scott (R‑S.C.), chair of the Senate Banking Committee, is pressing Kevin Warsh, a former Fed governor, to testify on the economic fallout of a data‑center spending spree that could reach $7 trillion by 2030. Scott warns that families living near these infrastructure hubs are already paying the price through higher electricity bills — and that Congress must act before an economic crisis unfolds.

On March 12, 2026, the Banking Committee convened a hearing titled “AI and the American Dream: Promoting Innovation, Affordability and American Dominance.” The headline issue was AI's economic impact, but the real flashpoint was data centers. In his opening remarks, Scott described AI companies on a “spending spree” to build data centers, calling them “the infrastructure that supports AI.” He argued that the federal government is effectively subsidizing this build‑out through loans, direct funding, and allocation of federal lands — all before Congress has addressed consumer protections or systemic risk.

Scott’s key points:

[!insight: key takeaway] Scott’s demand for Warsh signals a shift in the AI debate from “how fast can we build?” to “who pays when the power runs out?” The former Fed governor’s expertise in financial stability makes him a critical voice on whether data‑center investments could create systemic vulnerabilities similar to the 2008 housing bubble.

The AI data center boom is not a niche story — it’s a macroeconomic event. Projections cited during the hearing suggest AI companies could spend up to $7 trillion on AI infrastructure by 2030, including data centers, energy, and networking. That scale dwarfs the dot‑com build‑out and rivals the entire U.S. residential mortgage market. Yet Congress has largely watched from the sidelines, leaving agencies like the Department of Energy and the Federal Energy Regulatory Commission to manage the grid strain and environmental reviews.

The issue has created an unusual bipartisan pressure valve. While Scott pushes for Warsh as a witness, Sen. Elizabeth Warren (D‑Mass.), the committee’s ranking Democrat, sent a June 8 letter demanding that Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent testify on the Trump administration’s AI regulatory approach. Warren argued that “only industry experts” were scheduled, leaving out any administration officials. Both parties are now competing to define the terms of the data‑center debate: Scott wants a conservative, market‑based framework; Warren wants accountability for federal subsidies.

Meanwhile, other committees are building a record. The House Science Committee’s recent hearing, “Powering America’s AI Future,” heard testimony that major energy and data‑center projects face average delays of 26 months due to permitting bottlenecks. Witnesses included Google’s Marsden Hanna and UC Santa Barbara’s Dr. Eric Masanet, underscoring that even the industry itself is struggling with the pace of infrastructure approval.

For tech companies and their investors, Scott’s push for Warsh is the clearest signal yet that Congress is serious about reining in the data‑center frenzy before it spirals. The practical implications are immediate:

[!insight: a practical takeaway for the reader] If you’re a founder building AI applications that depend on cloud compute, expect your energy costs to rise — and your access to capacity to become more uncertain as Congress debates who pays for the power grid. The days of cheap, subsidized compute may be numbered.

Scott’s call for Warsh is a prelude. The Banking Committee is expected to hold additional hearings on AI and data center infrastructure, and Warsh’s testimony could shape the language of a proposed Data Center Accountability Act or similar framework. Separately, Scott is advancing the AI Fraud Accountability Act with Sen. Sheehy to target AI‑enabled fraud, showing that consumer protection is not just Warren’s issue.

For now, the ball is in Warsh’s court. If the former Fed governor warns of systemic risk, the AI industry’s $7 trillion spending spree could face its first serious speed bump.