Maine Governor Janet Mills vetoed a bill Thursday that would have placed a statewide ban on new data center construction, rejecting legislation that had drawn significant attention as a potential national precedent for regulating the fast-growing industry.

The bill, passed by the Maine legislature, would have imposed a moratorium on new data center development amid concerns about energy consumption and strain on the state's power grid. Data centers, which power cloud computing and artificial intelligence infrastructure, have faced growing scrutiny from state governments over their large electricity demands.

Governor Mills, a Democrat, indicated she opposed a blanket prohibition as too broad an approach, suggesting that targeted energy and land-use regulations would be more appropriate than an outright construction ban. Her veto preserves Maine's ability to attract data center investment while leaving open the possibility of more narrowly tailored oversight.

The decision puts Mills at odds with some members of her own party who championed the moratorium as a necessary step to protect the state's energy resources and environment. Supporters of the bill argued that unchecked data center growth could drive up electricity costs for Maine residents and complicate the state's renewable energy goals.

Opponents of the ban, including business and technology industry groups, had warned that the moratorium would have deterred economic investment and job creation in Maine. The veto leaves the state's regulatory framework for data centers unchanged for now, though legislators may revisit the issue in future sessions.