Sen. Ron Wyden is proposing a new tax on large data centers and restrictions on the tax breaks their owners can claim, opening a fresh front in Congress’ debate over artificial intelligence and its economic effects. The Oregon Democrat, the Senate Finance Committee’s top Democrat, said Friday his plan would apply an excise tax to revenue from data-center services, including cloud computing, data storage, AI training and processing. It would cover facilities of at least 25 megawatts, with exceptions for internet infrastructure and traditional corporate IT departments. Wyden has not set the tax rate. He said he would wait for revenue estimates from congressional budget forecasters before deciding how much companies would owe. The proposal would also restrict data-center operators’ access to tax breaks for depreciation, research and development, investments and Opportunity Zones, as well as benefits linked to real estate investment trusts. Its proposed limits on research credits go further than those advanced by some other Democrats, amid questions about whether existing law allows companies to claim such subsidies for data-center construction. Research credits are intended for experimental work rather than ordinary business costs. Meta has disclosed that the Internal Revenue Service could reject its use of research credits. Wyden said his legislation would make clear that the proposal does not imply that claiming credits for data centers built before the law’s introduction was legal. Wyden wants to pair the tax provisions with expanded unemployment benefits, arguing that workers need more support as AI threatens jobs. “Americans feel the looming fear of AI job losses, and Congress has a responsibility to help the country prepare,” he said, calling the proposal a first step toward wage security amid economic uncertainty. The plan comes as opposition to data-center expansion grows among voters and lawmakers. Companies building AI infrastructure have also made extensive use of tax incentives, which budget forecasters say have reduced corporate tax receipts. Major technology and business groups are already engaging on the issue. Microsoft and AI infrastructure company CoreWeave have reported lobbying on data-center taxes, as have the Real Estate Roundtable and the National Association of Manufacturers, reflecting the broader range of industries with a stake in new facilities. The proposal could gain traction if Democrats take control of the Senate in next month’s elections. Wyden would be positioned to lead the Finance Committee if he becomes its chair, giving him a prominent role in any congressional push to tax AI infrastructure and address disruption to workers.