Data centers see pushback, but still welcome in Ohio
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Ohio continues to welcome new data centers, the vital yet sometimes controversial facilities underpinning our digital lives and the AI explosion.
Why it matters: More than 5,000 of these key tech facilities now dot the American landscape, often requiring massive amounts of energy and land and receiving big government incentives.
- Given these costs, some communities are starting to push back.
The big picture: Whenever you join a Zoom meeting, save photos to the cloud or stream videos online, you're depending on a data center.
- The centers resemble windowless warehouses and usually employ a few dozen people.
State of play: There are around 100 data centers in Central Ohio alone, including some by tech heavyweights like Amazon, Facebook and Google.
- Ohio is one of 30 states with legislation providing tax incentives to attract new projects.
Zoom in: Microsoft is among the latest to reap local benefits. The company will receive a 100% property tax abatement for 15 years on a planned $420 million data center in New Albany and is also eligible for a sales tax credit on its hardware investment.
- Microsoft officials have said the center will create 30 jobs with a total payroll of roughly $50,000 per worker when it opens in 2027.
What they're saying: "If you're looking at cost-benefit here, we're spending hundreds of millions of dollars for puny numbers of jobs from companies who are no two-bit operations," Zach Schiller, an economist for the progressive think tank Policy Matters Ohio, told Cleveland.com.
- Data centers will claim an estimated $250 million in state sales tax exemptions through 2025 this year and next, the news outlet reported.
The other side: "While data centers do not directly create large employment opportunities, they do create a significant amount of high-end construction employment for a period that typically runs around 24 months," per researchers at investment firm CBRE.
Threat level: Data centers also face bipartisan scrutiny in other states on issues like aesthetics, noise, national security and the surge in electricity demand.
- Central Ohio's grid capacity will be "constrained" over the next two to three years, commercial real estate firm JLL warned this spring.
- Barclays researchers see data centers accounting for at least 9% of overall electricity demand by 2030, up from 3.5% today.
The bottom line: America needs data centers — what's less clear is where to put them.
Go deeper: Data centers are suddenly everywhere — but some say "no thanks"