The Artificial Intelligence and Data Center Act establishes a regulatory framework for high impact data centers and creates the Office of Transformation and Opportunity to oversee the Artificial Intelligence, Data Center, and Emerging Technology Regulatory Sandbox Program. The act defines "high impact data center" as facilities with a critical IT load of 50 megawatts or more and mandates that local ordinances must allow reasonable development without imposing stricter conditions than those for other industrial uses. The legislation also introduces a regulatory sandbox program that permits participants to test innovative AI and emerging technology products without the usual licensing requirements, while ensuring consumer protection and compliance with good faith operations.

Additionally, the bill streamlines the permitting process for high impact data centers through a High Impact Data Center Permit Program, which includes a timeline for approvals and interagency cooperation. It allows for deemed approval of permits in case of delays and tasks the Office of Transformation and Opportunity with monitoring participant activities, handling consumer complaints, and ensuring compliance with reporting requirements. The Chief Transformation and Opportunity Officer will oversee these initiatives, with annual reports to the Governor starting in 2025. The act is set to take effect 60 days after passage, aiming to foster innovation while maintaining regulatory oversight and consumer safety.