RICHMOND, July 7 — The scrap metal yards that ring America’s data center corridors are facing their toughest regulatory push in years. Lawmakers in Virginia and Texas introduced bills in early 2025 aimed at choking off the resale pipeline for stolen copper and other metals, responding to a surge in thefts at AI data center construction sites that has rattled the industry.
Virginia’s House Bill 2345, introduced in January 2025, would force scrap yards to verify the identity of every seller and report all cash transactions over $100 to a state database. The measure targets the anonymity that has long made cash-for-scrap a favored channel for thieves.
Texas’s Senate Bill 789, also introduced in January 2025, takes a different approach — a mandatory 10-day holding period on copper purchases, giving law enforcement a window to investigate whether the metal was stolen. The bills carry the backing of the Data Center Coalition and the National Association of Data Center Operators, two trade groups that represent the companies building and running the server farms powering the artificial intelligence boom.
Those groups have watched thefts climb as construction sites — sprawling, often remote, and packed with valuable copper wiring — became prime targets.
The scale of the problem
Estimates from the Virginia Crime Commission suggest that if the legislation passes, theft could drop by up to 30%. That figure has given lawmakers and industry officials a concrete target as they push the bills through committee hearings this year. Industry groups are not waiting solely on legislation.
They are also developing voluntary standards, including a universal equipment tracking system built on blockchain technology. That system is set to be piloted in 2026, creating a digital ledger that could follow copper and other high-value materials from manufacturer to installation to scrap yard, making stolen goods far harder to sell.
The Federal Bureau of Investigation launched a task force in March 2025 to coordinate investigations across state lines. The move acknowledged what local police departments had been saying for months: theft rings were operating across jurisdictions, stripping copper from sites in Virginia one week and Texas the next, exploiting gaps between state laws and local enforcement priorities.
Two states, two approaches
Virginia’s bill focuses on transparency at the point of sale. The identity verification requirement and the $100 cash-reporting threshold would create a paper trail that investigators could follow. Texas’s bill, by contrast, builds in delay — the 10-day holding period gives detectives time to match recovered copper against theft reports before the metal is melted down and becomes untraceable.
Both approaches have precedents in other states that have grappled with scrap metal theft, but the scale of the current problem is different. AI data centers require enormous amounts of copper for power cabling, grounding systems, and cooling infrastructure.
A single construction site can hold hundreds of thousands of dollars in raw metal, and the rapid pace of building has left many sites vulnerable. The Data Center Coalition has argued that the thefts are not just a financial nuisance. Stolen copper can delay construction timelines, push up insurance costs, and create safety hazards when wiring is cut or removed from partially built structures.
The coalition’s support for both bills signals that the industry sees regulation as a necessary tool, even if it adds administrative burdens to the scrap trade.
What comes next
Neither bill has passed as of July 2026. Both remain in committee, where lawmakers are weighing concerns from scrap yard operators about the cost of compliance against the industry’s demands for action. The Virginia Crime Commission’s estimate of a 30% reduction in theft has become a key talking point for supporters, who argue that even partial success would justify the new rules.
The blockchain tracking pilot, set to begin this year, represents a parallel track — a private-sector solution that could complement whatever regulations emerge from Richmond and Austin. If the pilot succeeds, the industry may push for broader adoption, creating a system that makes stolen copper as hard to sell as a stolen smartphone with a locked IMEI.
For now, the scrap yards wait. The FBI task force is operational. The bills are alive.
And on construction sites across Virginia and Texas, the copper that powers the AI revolution remains a target.
