After Local Zoning: Next Steps for Alaska in Data Center Development
In our recent post, we discussed Anchorage's adoption of a new land use framework for data centers and other energy-intensive uses. The ordinance represented a significant step toward preparing Alaska for future digital infrastructure development by establishing a clearer regulatory pathway for reviewing data center projects and addressing local concerns regarding land use compatibility, noise, and utility coordination. As we noted, Anchorage currently has only one sizable colocation facility and no major hyperscale data centers.
Governor Mike Dunleavy has repeatedly promoted Alaska's potential advantages for data centers, emphasizing the state's energy resources, cool climate, and strategic location. Public discussions have included outreach to major technology companies and broader efforts to attract investment associated with artificial intelligence and other energy-intensive industries. Alaska's principal data center bill, Senate Bill 250 (SB 250) was sent to the Alaska House of Representatives after passing the Senate on May 16, 2026. The legislation would establish a regulatory framework for large data centers and utility service agreements, requiring electric and gas utilities to enter into commission-approved contracts with data center customers and ensure that infrastructure and service costs attributable to those facilities are borne by the data center operators rather than being shifted to other customers. The bill also includes reliability safeguards intended to prevent data center demand from adversely affecting fuel supplies or utility service for existing customers. Committee amendments have added requirements that data centers must provide financial security when furnishing service to the data center will require an electric or gas utility to incur capital investment costs exceeding $1,000,000, and that the data center submit a monthly water usage and wastewater discharge plan to the relevant municipality that details how the data center complies with water quality requirements. These amendments reflect the increasingly intertwined relationship between data centers and the communities that host them—shaped by regulatory frameworks and commitments from major technology companies—as growing public pressure encourages tech companies, data center operators, regulators, and community stakeholders to work toward resolving competing needs. Following Senate passage, SB 250 was referred to the House Community and Regional Affairs Committee, where it died. While it will not be debated further this legislative session, it is likely to be revived in a future session.
The rapid growth of the data center sector has prompted governments nationwide to examine whether existing regulatory frameworks can accommodate the construction and operation of increasingly large and energy-intensive facilities. Anchorage's ordinance and SB 250 are part of that trend and demonstrate a willingness to address the opportunities and challenges associated with future development before major projects arrive. But legislative efforts are the least of Alaska's concerns at the moment. Modern data centers depend upon three foundational inputs: land, power, and connectivity. Alaska possesses several advantages with respect to the first two. The state offers abundant developable land, a cool climate that may reduce cooling demands, and significant energy resources. Connectivity, however, presents a different challenge.
Alaska's Geographic Position Creates a Unique Connectivity Opportunity
Large cloud providers and hyperscale operators depend on high-capacity, resilient fiber networks to handle the demands of substantial data traffic. Site selection decisions frequently depend upon the availability of multiple fiber routes, route diversity, and reliable connections to domestic and international markets. Consequently, the most mature data center markets—including Northern Virginia, Dallas-Fort Worth, Phoenix, and Oregon's Columbia River corridor—benefit not only from available land and power but also from extensive telecommunications infrastructure developed over many years.
Alaska occupies a distinctive position within the global telecommunications landscape. Situated between the Lower 48 states, Asia, and Europe, the state has long been viewed as a potential strategic corridor for trans-Pacific communications infrastructure, especially for communications crossing the North Pole. As global demand for data transmission continues to increase, Alaska's location presents opportunities to support international connectivity and potentially attract infrastructure investment associated with those routes.
Recent industry developments further underscore the importance of telecommunications infrastructure within Alaska's broader economic development strategy. In April 2026, GCI announced its proposed acquisition of Quintillion, a transaction that would combine Quintillion's existing subsea and terrestrial fiber network with GCI's statewide telecommunications operations. According to public statements, the combined network would include more than 1,800 miles of existing fiber infrastructure and approximately 1,500 miles of planned expansion.
Several ongoing projects illustrate the extent to which telecommunications providers continue investing in Alaska's fiber infrastructure. Most notably, Quintillion is advancing the Japan-Washington State (JAWS) Trans-Pacific Cable System, which is designed to create a new trans-Pacific route connecting Japan and the Pacific Northwest through Alaska. According to Quintillion, the project builds upon the company's existing network, which already includes approximately 1,200 miles of subsea fiber and 500 miles of terrestrial fiber throughout Alaska.
Quintillion also continues to expand infrastructure throughout the state, including projects intended to improve connectivity for North Slope communities and industrial operations. The company's Nome to Homer Express (NTHE) Project proposes approximately 933 miles of new subsea and terrestrial network infrastructure extending south from Nome, crossing terrestrially to Igiugig, and ultimately connecting into existing terrestrial GCI Communications facilities serving Homer.
These projects are often discussed in the context of broadband deployment and telecommunications access. They may also have significant implications for future data center development. Investments that improve route diversity, network resiliency, and international connectivity can help establish the infrastructure foundation that large-scale digital facilities require.
Recent outages affecting portions of Alaska's subsea fiber infrastructure demonstrate why resiliency and redundancy remain critical considerations. Telecommunications providers have invested substantial resources in improving route diversity and reducing vulnerabilities associated with single points of failure. As Alaska seeks to attract additional digital infrastructure investment, those same resiliency considerations are likely to become increasingly important for prospective data center operators.
Not every data center requires the same level of connectivity. Certain artificial intelligence training workloads, high-performance computing applications, disaster recovery operations, and long-term data storage functions may be less latency-sensitive than consumer-facing cloud services. As a result, Alaska may be capable of supporting some categories of digital infrastructure even before it achieves the network density associated with more established data center markets.
From Economic Development Vision to Infrastructure Reality
Separately, Alaska is evaluating a proposed $500 million hyperscale data center development on the North Slope that could become one of the largest facilities of its kind in the United States. The project, proposed by Alaska-based developer Stak Energy, would occupy approximately one square mile of state land near the Dalton Highway and is intended to support artificial intelligence, cloud computing, and high-performance computing workloads. According to state leasing documents, the campus could ultimately require between one and three gigawatts of self-generated power supplied by North Slope natural gas through a dedicated pipeline and on-site generation infrastructure.
In May 2026, the Alaska Department of Natural Resources issued a preliminary best-interest finding supporting a long-term state land lease for the project, initiating a public review process. The proposal remains in the early permitting and leasing stages and has not yet secured final approvals or announced project financing. While proponents cite Alaska's cold climate, abundant land, and stranded natural gas resources as competitive advantages, the project has also attracted scrutiny regarding its substantial energy requirements, infrastructure needs, and long-term environmental impacts.
Workforce Needs for Building and Operating
Another consideration that may become increasingly important as Alaska pursues data center investment is workforce availability. Although operational modern data centers generally employ fewer workers than many traditional industrial facilities, they nevertheless require a specialized workforce capable of supporting facility operations, network infrastructure, cybersecurity, electrical systems, and mechanical maintenance. Competition for these workers has intensified as data center development has accelerated nationwide. As a result, states seeking to attract large-scale digital infrastructure investment are increasingly evaluating not only land, power, and connectivity, but also whether local educational institutions, workforce development programs, and industry partnerships can support long-term operating needs. Alaska's universities, technical training programs, and existing telecommunications and energy sectors may provide a foundation for future workforce development efforts, but workforce planning is likely to become an increasingly important component of broader discussions regarding the state's role in the digital economy.
Looking Beyond Permitting
Anchorage's adoption of a data center framework represents an important step toward preparing Alaska for future digital infrastructure development. State regulations will help guide efforts going forward. Regulatory certainty can help communities address emerging technologies and infrastructure demands as major projects are proposed. However, experience from other data center markets suggests that regulatory readiness alone is unlikely to determine where future investment occurs.
Data centers ultimately operate within a broader ecosystem of energy, telecommunications, workforce, and transportation infrastructure. While Alaska's climate, available land, and energy resources offer meaningful advantages, the state's long-term competitiveness may depend on continued investment in fiber networks, subsea cable systems, and workforce development initiatives needed to support large-scale digital infrastructure.
As policymakers continue to evaluate Alaska's role in the evolving digital economy, the conversation may increasingly shift beyond zoning and permitting. The viability of large-scale data center development in Alaska hinges on unresolved questions about the state's infrastructure capacity and workforce readiness—factors state leaders will need to address to make the opportunity real.
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Wendy Kearns is a partner and Elyse Sparks is an associate in the Seattle office of DWT. Michael O'Brien is a partner in the firm's Anchorage office. For any questions or more insights, please reach out to the authors or another member of our data centers & digital infrastructure, technology, or Anchorage teams and sign up for our alerts.