States Second Guess Tax Breaks for Data Centers As American Uproar Spreads

Rethinking a Deal With the Devil State officials and elected leaders who once championed tax exemption deals with the executives of companies like Amazon, Google and Meta for the development of data centers in their states are now having second thoughts — and some states are taking steps toward making those deals a thing of the past. It’s a sign that elected officials are belatedly taking notice of voters’ fears about data centers, unregulated AI advancement and the broader agenda of the tech industry. Rampant construction of new data centers around the U.S. has prompted panic about spikes in the cost of electricity, drained water supplies, pollution and artificial intelligence stealing human jobs. It’s underscored by the extreme economic uncertainty that everyone is facing — except, maybe, tech executives and the people who design their messaging. The Wall Street Journal has a new report out this week examining 10 different states that had previously granted tech companies sales tax exemptions for the equipment needed to run data centers. In each of those states, officials are now having second thoughts. The piece focuses especially closely on Ohio and the work that state legislators did more than 10 years ago to encourage Big Tech investment in the state by offering the sales tax exemption, and the ways in which the artificial intelligence surge of the last four years has resulted in over $1.5 billion in savings for tech companies developing data centers there. After substantial public pushback, Republican Gov. Mike DeWine back in May placed a pause on new applications for sales-tax exemptions, and some state lawmakers are pushing for the sales-tax exemption to be repealed. Several other states are considering similar actions to end or pause these ongoing tax breaks for tech companies, which “seem to have more money than God,” as one Ohio lawmaker, state Rep. Tristan Rader (D-OH), put it to WSJ. Elected officials and politicians across the political spectrum are grappling with how to address the sweeping and righteous outrage against data center construction in rural and urban communities across the country. The notable exception is President Trump, who has maintained his allegiance to his big tech friends — who are funding his ballroom, and who donated to his inauguration, among other things. He memorably told Americans that only communities who want to be “backwards and poor” should oppose the new construction. His Environmental Protection Agency, meanwhile, is proposing a federal policy change that will make it easier for data center construction to move forward without input from the public. Republicans are struggling with how to walk the line, but the backlash has been so severe back home that many are fully breaking with the Trump administration on the matter. Texas’ Republican Gov. Greg Abbott recently announced that he was placing a pause on the ability for new data center projects to be connected to the state’s power grid. Sen. John Thune (R-SD) and Vice President JD Vance have attempted to carve out a reasonable place for Republicans to stand should they not want to bow down whole hog to tech oligarchs, like Trump. The two have both independently suggested that states should look at mandates for tech companies to “be putting power back into the grid” as one way to address Americans’ concerns that the mammoth AI facilities are spiking electricity costs. Related Reading As Rader, the Ohio Democrat, said above … WSJ: More Money Than They Ever Imagined—and No Clue How to Spend It Bigger Than Politics You may have seen by now the deadly warning from an Anthropic researcher who resigned from his job and warned that unregulated AI models had the potential to destroy humanity in the next four years. “I resigned from Anthropic today. I spent the last three years doing pretraining research at both OpenAI and Anthropic,” Anthropic research Jason Coxon, who worked on training models, said on X. “Neither company is acting responsibly. They are racing straight to self-improving superintelligence and gambling with our lives.” “The people building AI earnestly believe that it could kill us all by the end of the decade. This is not a marketing stunt,” he continued. Lawmakers across the political spectrum are calling on Congress to do something to prevent what Coxon and others from Anthropic have been forecasting. One Funny Thing I’ll bring your attention to one matter in today’s edition of Where Things Stand that is less existential than the threat posed by America’s tech oligarchy. The White House apparently got involved in the recent mystery surrounding Fox News’ ousting of longtime Fox Business News host Maria Bartiromo. Trump’s trade adviser Peter Navarro said during an interview with Newsmax Tuesday that the White House reached out to network executive to let them know they were dismayed by the decision. “But suffice it to say that Suzanne Scott got a call, and basically the White House let her know that that kind of thing is totally unacceptable,” Navarro said, referencing the Fox News Media CEO. Navarro went on to complain about how “out of control” Fox News is, suggesting that the network has become anti-Trump — a suggestion that flies in the face of how often the network bolsters the president’s agenda. After news of Bartiromo’s ouster broke, reports surfaced suggestion the longtime host reportedly shared details of internal editorial decisions with the White House. “The bigger story here is, forget about anybody thinking that Fox is a conservative network that’s friendly to MAGA, that’s friendly to Trump,” he said. “They’ll feed you some red meat over there — the easy stuff, the trans stuff, stuff like that — but when it comes down to MAGA things, Suzanne Scott gets rid of everybody over there who wants to talk about MAGA issues.” What to Read From TPM Today Josh Kovensky and Layla A. Jones report on the Trump administration officially moving to exclude certain noncitizens from being counted in the upcoming Census, finding that the new, official policy is actually more extreme than the draft version that TPM was first to report on in August: Trump Admin Officially Moves to Reshape National Political Power With New Changes to 2030 Census Kate Riga covered oral arguments today in the abortion pill mifepristone case before the Fifth Circuit Court of Appeals: Appeals Court Skeptical That Louisiana Can Sue FDA Over Mifepristone Being Mailed into the State John Light helps unpack the convoluted legal situation in Missouri regarding which maps to use in the upcoming election — and what it reveals about the Trump administration’s approach to sowing legal chaos in the election administration process this fall: Dueling Missouri Court Decisions Give Us a Preview of the Kind of Midterm We’re in For Yesterday’s Top Story Making Sense of That Big Story Saying Netanyahu Was Warned About Oct 7 What I’m Reading Jeffries says Trump is too ‘corrupt’ to focus on Americans’ struggles Trump says he’d consider pardoning Michael Cohen Associated Press will stick with Lake Ontario over Trump’s renamed ‘Lake America’ I remember when the big worry was that Big Pharma was going to screw us over. But at least they provide jobs. My suspicion is that Fox’s main objection to Bartiromo is that it didn’t want to want to lose another $787 million backing Trump’s election lies. This strikes me as very similar to Kemp & Raffensperger’s refusal to “find” those 11,780 votes–they were taking on the risk of jail time to cater to Trump’s delusions, with Trump taking on no similar risk. Fox has already been down that road, already lost huge sums in court, and I think maybe they realize that Trump wouldn’t save them the second time any more than he did the first. Or course, as the poet said, Trump is a Sick Fuck, and this is the sort of thing he routinely expects from his followers. They must assume all the risk for the greater glory of their lord and savior Trump, and how dare they behave otherwise? I’ve never understood the economics of tax breaks (i.e. paying) profitable businesses to open a local branch, thus ‘creating jobs.’ Sounds like more trickle-down to me. Gee, I don’t know why people could possibly be against data centers. The AI threat is real, and not just the apocalyptic level but just how it can mess with your life. This story ibelow is important, it’s about how a “White Hat” (good) hacking group found a way using AI agents to create a worm that would have infected every user’s phone on the Chinese WeChat social media platform. Your phone rings with a number of a friend in your trusted contact list, you don’t have to pick up and answer. It just infects your phone and steals all your data. This wasn’t deployed, and the Chinese owner of WeChat was notified, but it would have spread quickly as a virus among 1.4 billion users on that platform.