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Jamel McMullin
The meteoric growth of hyperscale data centers is by far the most controversial economic development problem in America today. Driven by the explosive demand for Artificial Intelligence, it is causing so much blowback that at least 11 state legislatures are now debating bills to impose construction moratoriums.
Thirty-six states don’t charge sales tax when developers build and equip data centers – including those $30,000 GPU chips. Georgia is losing $2.5 billion this year; Virginia is losing $1.9 billion; Texas is losing $1 billion – with loss rates soaring each year as data centers become ever-bigger and more expensive. A dozen states fail to disclose their losses.
Hyperscale centers use as much electricity as small cities (driving power rates up), emit diesel air pollution from standby power generators, consume millions of gallons of water a day, occupy hundreds of acres of land, require high-tension power lines and electrical substations, and generate noise pollution that disrupts communities.
Quality of life blowback is surging throughout the country, in red and blue states alike, and in urban, suburban, and rural communities. Ratepayer consumer groups are demanding data centers cover their own costs for new electricity generation and transmission capacity. And taxpayers grappling with state and local deficits caused by HR 1 and other federal austerity measures are seeking to end the sales tax exemptions.
The ultimate beneficiaries of the controversial tax breaks are among the most valuable corporations on the planet: Nvidia, Amazon, Microsoft, Meta/Facebook, Alphabet/Google, and OpenAI. Combined, they have announced more than $600 billion in AI buildouts this year after spending $360 billion last year.
How will this national blowback shape the nation’s economy? Are Community Benefits Agreements the answer? Or can we get there from here, given the truly extractive nature of hyperscalers?
Please join us as Greg LeRoy, Executive Director, and Amanda Kass, Research Director, of Good Jobs First, will share their data and perspectives.
Shutting Down Data Center Subsidies - Good Jobs First