ISSUE 005 · The Aroko Letter
The Subnational Sovereigns
US AI infrastructure is fracturing along state regulatory lines into a durable two-tier compute economy
Five permissive, energy-rich states will absorb the majority of net-new hyperscaler capacity through 2028; five restrictive states absorb a fraction, dominated by grandfathered pipeline. The mechanism is shale-AI codependence — gas needed AI demand, AI needs gas for firm power.
Key takeaways
- State environmental police power is the strongest federalism shield in U.S. constitutional law — federal preemption succeeds on AI model regulation but fails on data center siting.
Where it sits in the series
Inward extension of Issue 4 (The Sovereign AI Fallacy): the named sovereign is never the actual sovereign — first internationally, now domestically.
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Forecasts this issue put on the watchlist
Open Grid Connections & Local ApprovalVirginia HB 1515 disposition.
Quarterly through the 2026 legislative session
Open Grid Connections & Local ApprovalFERC June 2026 PJM large-load co-location ruling.
One-time ruling, June 2026
Open Grid Connections & Local ApprovalNovember 2026 midterm outcome and 120th Congress opening posture.
One-time event, November 2026, with rolling first-100-days assessment
Open Grid Connections & Local ApprovalNovember 2026 Imperial County ballot initiative on a data center ban.
One-time vote, November 2026
Open Grid Connections & Local ApprovalERCOT next CDR report and Bloom Energy Q1 2026 update.
Semi-annual
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