Big Law Caught in AI vs. Utility Conflicts

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Law firms that advise both utilities and AI data center developers are facing potential conflicts as utilities experience unprecedented demand from AI data centers. This is fueling concerns over the strained power grid, particularly in the data center hub of Texas. Three of Texas' biggest law firms - Vinson & Elkins, Baker Botts, and Jackson Walker - are longtime advisers for large regulated utilities, while also taking on data center developers and hyperscalers as clients.

Why it matters

The surge in demand for power from AI data centers is creating revenue and opportunity for utilities, but also straining the power grid, especially in data center hubs like Texas. Law firms that advise both utilities and AI data center developers must navigate these potential conflicts, and could be forced to choose which side to represent.

The details

The data center rush is fueling concerns over the strained power grid, particularly in Texas, which has become a major hub for AI data centers. Three of the state's biggest law firms - Vinson & Elkins, Baker Botts, and Jackson Walker - have traditionally advised large regulated utilities, while also taking on data center developers and hyperscalers as clients. This dual representation creates potential conflicts as the firms must balance the interests of both types of clients.

• The data center rush has led to unprecedented demand from AI data centers on March 17, 2026.