Data centers—the computing infrastructure required to power the country’s AI, on which companies are shelling out nearly $700 billion to build this year alone—are quickly popping up in rural and suburban towns across the country, some of which are more than two times the size of Manhattan’s Central Park. But the massive footprint of these projects may come with an equally massive public cost.
At least 36 states currently provide tax breaks for companies to build the facilities, coming at a cost of billions in forgone revenue. Virginia, the state with the most data centers, is dishing out $1.9 billion annually to data center developers. For Georgia, it’s $2.6 billion annually, according to an official state estimate. And after offering $150 million in breaks in 2024, Texas’s comptroller’s office this year upped that number to more than $1 billion annually, a nearly 567% increase in just one year.
