Tesla CEO Elon Musk recently reacted to a social media post criticizing a proposed US bill that could temporarily stop the construction of large AI data centers in the country. The Tesla and SpaceX CEO reposted comments by Y Combinator CEO Garry Tan on X and simply wrote: “hmm”.The reaction came as tech leaders and startup executives debate the proposed AI Data Center Moratorium Act introduced earlier this year by SenatorBernie Sandersand Representative Alexandria Ocasio-Cortez (AOC). The proposed US legislation would pause new AI data center projects larger than 20 megawatts until the US government introduces broader AI oversight rules.The bill includes measures related to environmental protections, labor standards, mandatory union labor requirements and semiconductor export restrictions.

Y Combinator CEO Garry Tan says bill could hurt jobs

In his post, Y Combinator CEO Garry Tan argued that the proposed restrictions could damage one of America’s biggest job creation sectors. “Sanders and AOC introduced a bill to pause ALL AI data center construction. 300+ local bills filed. Half of planned 2026 data centers facing delays or cancellation. Each one brings billions to local economies,” he wrote in X post.“The people who say they want American jobs are trying to block the biggest job creation engine since the interstate highway system,” Tan wrote.He cited research from Brookings and PwC, saying data centers create thousands of jobs directly and indirectly through construction, energy infrastructure and supplier networks.According to Tan, PwC’s 2025 report found that data centers supported 4.7 million US jobs in 2023. He also said each direct job created by a data center generates a 7.5 times multiplier effect across related industries.

Opposition to AI data centers growing

Despite support from the technology industry, resistance to large AI data centers has increased in several US communities.Critics have raised concerns about rising electricity costs, environmental impact and pressure on local infrastructure.Alexandria Ocasio-Cortez previously said some utility customers near large facilities saw electricity bill increases of up to 267%. Reports have also noted that some AI data centers can consume power equal to around 100,000 homes.Tan called the proposed restrictions “knee jerk and shortsighted,” warning they could hurt startups, reduce jobs and weaken America’s position in the global AI race.