A promising solution is to transform data centers into grid and regional assets that offer flexible demand powered by carbon-free electricity. These centers can reduce energy consumption during grid strain, ramp up usage during renewable energy surpluses, and store excess electricity to feed back into the grid, improving its reliability and resilience. To unleash this demand-side potential, the federal government, state policy makers, and utility regulators need to take three immediate actions: (1) fill data and knowledge gaps in AI data center design and operation; (2) improve AI data centers’ energy efficiency and integration with regional infrastructure and the grid; and (3) develop policies that transform demand-side strategies.