S 5054
A bill to exempt AI data centers from bonus depreciation and require data center operators to submit certain information relating to electricity and water use by data centers, and for other purposes.
TL;DR
Senator Mark Warner (D-VA) introduced this bill to strip AI data centers of the bonus depreciation tax break (a major write-off that lets companies deduct big capital investments quickly) and force data center operators to report their electricity and water usage. It targets the massive resource consumption of AI infrastructure while making it more expensive to build.
How This Might Impact Your Business
Cloud providers and hyperscalers (AWS, Microsoft Azure, Google Cloud, Meta, Oracle) lose access to bonus depreciation on AI data center builds, meaning slower tax write-offs and higher effective costs for new facilities.
AI infrastructure companies like CoreWeave, Lambda, and Crusoe face reduced project returns and may need to re-run financial models on planned builds.
Data center operators must report electricity and water consumption to federal regulators, creating new disclosure obligations and potential competitive intelligence concerns.
Utility companies serving data center clusters (in Virginia, Texas, Arizona, Ohio) should expect increased scrutiny on capacity commitments and grid impact.
Real estate developers and REITs focused on data center properties (Digital Realty, Equinix) may see slower tenant expansion as tax economics shift.
Enterprises signing long-term AI compute contracts could see price increases passed through as providers absorb higher after-tax capital costs.
Currently in the Senate Finance Committee with no hearing scheduled; passage is uncertain but signals growing bipartisan interest in curbing AI infrastructure incentives.
What Should You Do
If you operate or lease data center capacity, ask your CFO and tax team to model the impact of losing bonus depreciation on planned 2025-2027 builds.
Data center operators should begin inventorying electricity and water usage data now, as reporting infrastructure will take months to build even if the bill is modified.
Enterprises with multi-year cloud or GPU contracts should ask providers whether pricing includes protection against tax-driven cost increases.
Monitor the Senate Finance Committee schedule and track whether this language gets folded into a larger tax package (a more likely path than standalone passage).
Review your public ESG and sustainability disclosures to ensure they align with the resource reporting this bill would mandate.
Who It Affects
Sponsors
Status Timeline
committee
Read twice and referred to the Committee on Finance.
July 21, 2026