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The Midwest is emerging as one of the nation's fastest-growing data center hubs, a complex trend the Columbus area helped kick off about a decade ago.

Why it matters: Data centers power the AI boom — but their soaring energy and water demands often go unreported, with unclear benefits for local communities and few permanent jobs created.

Data centers used 4.4% of U.S. electricity in 2023 and could consume up to 12% by 2028, per the Department of Energy.

Data center construction is at an all-time high, increasing 69% year-over-year from 2023-2024, per CBRE, a commercial real estate firm.

State of play: With Chicago and Columbus' energy capacities tapping out, companies are increasingly eyeing secondary markets such as Minnesota, Iowa and Indiana, where land is cheaper and energy is more available, Andy Cvengros of real estate firm JLL tells Axios.

The Midwest's abundant tax incentives are particularly appealing for companies, says Jon Davis, a policy strategist for The Council of State Governments. Ohio is one of several states with a sales tax exemption on data center equipment.

And cooler temperatures and proximity to the Great Lakes reduce the need for energy-intensive cooling — an advantage over warmer southern states.

Yes, but: The expansion often happens behind closed doors.

Local governments frequently sign nondisclosure agreements with tech firms, limiting public knowledge of energy and water usage, says Helena Volzer of the nonprofit Alliance for the Great Lakes.

Fewer than one-third of data centers track water consumption, according to a 2021 study.

"That is kind of startling," Volzer says.

The other side: Our world is growing increasingly digital, and the data needs to go somewhere. U.S. households had an average of 21 digital devices in 2023, per a Deloitte survey.

"It's businesses of all shapes and sizes as well. They're increasingly relying on digital infrastructure," Dan Diorio, senior director of state policy for the Data Center Coalition, tells Axios. 

As companies build to meet that surging demand, energy is a "significant cost driver," and it's in their best interests to be efficient, he says.

How data centers took root in Central Ohio

Transmission lines power an Amazon data center in Licking County, a large white structure behind a black fence lined with pine trees

Transmission lines power an Amazon data center in Licking County. Photo: Brian Kaiser/Bloomberg via Getty Images

Columbus' data center boom is largely thanks to infrastructure investments from Amazon, which opened its first local center in Hilliard in 2016.

The big picture: New Albany was ahead of the curve even before that, adding centers for businesses such as Nationwide, Discover and TJX.

The city wanted to diversify its business portfolio and increase the value of its rural land, Jennifer Chrysler, the suburb's community development director, tells Axios.

Even with local abatements, adding the centers increased tax revenue for schools without adding students.

The latest: Today, the suburb's burgeoning Business Park is what Chrysler calls an "ecosystem" of tech investments that made Intel's Ohio One project possible.

What they're saying: "When you have names like Google and Meta and AWS and Microsoft and QTS in your community, people start to scratch their heads and say, 'What's going on in Central Ohio?'" Chrysler says.

"There is 100% value in those kinds of big tech names being here."

The hidden environmental costs of data centers

Rows of computer servers fill a Meta data center in Texas.

Rows of computer servers fill a Meta data center in Texas. Photo: Paul Moseley/Fort Worth Star-Telegram/Tribune News Service via Getty Images

Data centers house server farms that store our information, along with electrical equipment that gets hot, requiring 24/7 air cooling that annually uses millions of gallons of water as a refrigerant.

They also use a large amount of electricity, which requires generating water.

Between the lines: Their exact consumption levels are often unknown, since most of them rely on municipal utilities, Volzer says.

Some states, such as Indiana and Illinois, are considering new transparency rules on data centers' energy usage.

To meet the demand on existing electricity power grids, strained markets may have to add capacity on- or off-site. In Ohio, utility regulators are currently determining who should pay for it as supply is not keeping pace.

Threat level: A recent Environment America report cautioned that this demand may delay the retirement of some fossil fuel power plants or require new fossil fuel generation.

Explore our map of Central Ohio data centers and delve into the details of how many local jobs they're creating.

one-third of data centers track water consumption

where data centers are located in Central Ohio

Inside Central Ohio's data center boom

As data centers surge in Central Ohio, concerns grow over water, energy and transparency.

Illustration of a server cabinet replacing a silo on a farm.

The Midwest is emerging as one of the nation&#x27;s <a class="gtmContentClick" data-vars-link-text="fastest-growing data center hubs" data-vars-click-url="https://www.axios.com/2025/04/16/midwest-data-center-growth-energy-usage" data-vars-content-id="abb564d4-cb01-493e-a256-6e49053dc5fa" data-vars-headline="Inside Central Ohio&#x27;s data center boom" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2025/04/16/midwest-data-center-growth-energy-usage" target="_self">fastest-growing data center hubs</a>, a complex trend the Columbus area helped kick off about a decade ago.Why it matters: Data centers power the <a class="gtmContentClick" data-vars-link-text="AI boom" data-vars-click-url="https://www.axios.com/technology/automation-and-ai" data-vars-content-id="abb564d4-cb01-493e-a256-6e49053dc5fa" data-vars-headline="Inside Central Ohio&#x27;s data center boom" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/technology/automation-and-ai" target="_self">AI boom</a> — but their soaring energy and water demands often go unreported, with unclear benefits for local communities and few <a class="gtmContentClick" data-vars-link-text="permanent jobs" data-vars-click-url="https://www.axios.com/2025/01/24/data-center-jobs-map-states" data-vars-content-id="abb564d4-cb01-493e-a256-6e49053dc5fa" data-vars-headline="Inside Central Ohio&#x27;s data center boom" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2025/01/24/data-center-jobs-map-states" target="_self">permanent jobs</a> created.

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The Midwest is billed as a climate haven insulated from worsening destructive forces like wildfires and hurricanes — but experts say our region still has ample work to do in responding to our climate change effects.

Why it matters: A "hallmark" of how Midwestern states such as Ohio experience climate change is a "weather whiplash effect" like the prolonged drought followed by heavy rain as seen with Hurricane Helene.

Those rapid shifts strain local infrastructure and hamper cities' ability to prepare and adapt, says Steve Bowen, Chicago-based chief scientist at the reinsurance company Gallagher Re.

How it started: Americans who move from one region to another are increasingly citing climate change as at least one driving factor, as they seek perceived safety from extreme weather.

Parts of the Midwest have been deemed climate havens by city leaders and climate scientists for their protection from sea-level rise and more temperate weather near the Great Lakes.

Reality check: The Midwest's intensifying heat and precipitation still impose harsh conditions and put pressure on its infrastructure, Jeremy Porter, head of climate implications for the research group First Street Foundation, tells Axios.

Threat level: An emerging "extreme heat belt" in the center of the country, with heat index values reaching 110°-115°F, stretches from Texas to Southwestern Ohio, including Cincinnati.

Extreme precipitation events like 100-year floods now occur every seven to eight years. That's because as the climate warms, the air can hold more moisture, Porter says.

Zoom in: Central Ohio's last three summers have been marked by unusual weather.

A high-wind storm knocked out power for several days in June 2022 amid a dangerous heat wave.

Canadian wildfires darkened skies and hindered air quality in 2023.

And this year, Ohio's worst drought in decades is devastating local agriculture.

What they're saying: "We've always had weather," Bowen says of the region.

"But what is definitely changing is the fact that the individual events themselves are starting to take on more extreme types of behavior — certainly more intense than we've seen before."

Cities such as Columbus are on the frontlines of climate change, prompting some to act more swiftly than countries to combat the crisis.

Why it matters: Many of the physical structures supporting city operations were designed for past climate patterns and will need updating.

Extreme heat and rain can cause major infrastructure damage, ranging from buckling roads and warped railroad lines to overflowing storm drains.

State of play: Cities are developing ambitious plans to slash their carbon footprints and mitigate impacts, with help from tens of billions of dollars for climate-related projects in President Biden's federal infrastructure bill.

Climate change is becoming less polarizing, making it easier for large cities to pursue projects and hire climate teams, Porter says.

Zoom in: Columbus' efforts include improving stormwater infrastructure, installing solar microgrids as a backup power supply and pursuing cleaner energy.

Some planning has already paid off. The city recently dipped into a reservoir built in 2014 to stave off water restrictions during the drought.

What we're watching: The city's Climate Action Plan, released in 2021, is due for its first update next year.

The bottom line: "There's still a little bit of a conception that we're in a better position here in Columbus and in Central Ohio, and to some degree, that's true," Sustainable Columbus assistant director Erin Beck tells Axios. "But we're not immune."

How Columbus is preparing for climate change's impact

The Midwest is billed as "climate haven," but it isn't immune.

Illustration of a caution sign with an earth completing the exclamation point.

Climate change

The Midwest is billed as a <a class="gtmContentClick" data-vars-link-text="climate haven" data-vars-click-url="https://time.com/6319053/go-midwest-young-man/" data-vars-content-id="cade46f2-b4ce-4c88-b249-20508d24797d" data-vars-headline="How Columbus is preparing for climate change&#x27;s impact" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://time.com/6319053/go-midwest-young-man/" target="_blank">climate haven</a> insulated from worsening destructive forces like wildfires and hurricanes — but experts say our region still has <a class="gtmContentClick" data-vars-link-text="ample work to do" data-vars-click-url="https://www.axios.com/2023/07/18/best-worst-states-for-climate-change-extreme-weather" data-vars-content-id="cade46f2-b4ce-4c88-b249-20508d24797d" data-vars-headline="How Columbus is preparing for climate change&#x27;s impact" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/07/18/best-worst-states-for-climate-change-extreme-weather" target="_self">ample work to do</a> in responding to our climate change effects.Why it matters: A &quot;hallmark&quot; of how Midwestern states such as Ohio experience climate change is a &quot;weather whiplash effect&quot; like the prolonged drought followed by heavy rain as seen with Hurricane Helene.

Linh Ta

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