The Colorado River runs over 1,450 miles through seven US states, carving dramatic canyons and providing drinking water for 40 million people before it crosses into Mexico.

Overuse threatens to dry up this critical American artery, which sustains people from Denver to Los Angeles and feeds the crops of California's Imperial Valley and Arizona's Yuma region — two of the world's most productive agricultural areas.

Already, some homebuilders in Arizona have stopped work over fears their developments won't have enough water. Cotton farmers south of Phoenix have left thousands of acres unplanted. Los Angeles residents have stopped watering their lawns. States are renegotiating allocations guided by the 103-year-old Colorado River Compact.

Now, in some of the region's driest stretches, tech companies are bringing a massive influx of water-guzzling data centers.

Documents reviewed by Business Insider show that some of these large data centers, football-field-size warehouses filled with computer servers that power the artificial intelligence revolution, could each demand millions of gallons of water a day, enough for tens of thousands of Americans.

Business Insider found that 40% of the nation's planned and existing data centers are in areas that the nonprofit World Resources Institute, which focuses on sustainability research, has characterized as experiencing "extremely high" or "high" water scarcity. The share is even larger, 43%, for the biggest centers, those that use 40 megawatt-hours or more of electricity each hour.

Two companies stood out in BI's analysis as having the most data centers in high or extremely high water-stressed areas: Amazon, with 81, and Microsoft, with 23. As a share of their data centers, Microsoft ranks first with 52% in such arid spots.

The companies don't seek out locations that are arid — they go to places like Arizona for reasons including abundant land and stable supplies of electricity. They negotiate access with the local officials in cities and towns across the country, arguing that the investment, tax revenue, and other economic benefits they bring will be worth it. It can be an attractive proposition, even in parched places like Goodyear, Arizona, which has negotiated for years with Microsoft over a complex of data centers.

"It's been challenging because they are a big company, and we are a small city," said Bill Stipp, a former Goodyear City Council member who voted to approve various stages of the project despite his concerns about water.

Ben Wilsker, a Microsoft spokesman, said the company's agreement with the city of Goodyear "benefits both parties." He declined to comment on the company's industry-leading percentage.

Data centers historically have needed copious amounts of water to cool their multitudes of powerful computer chips. Use of less water-reliant cooling techniques is growing but remains much less common.

Amazon still prefers water-intensive evaporative cooling technologies, though not all its data centers use that method, said a company spokesperson.

Unlike farmers or golf courses that have learned to make do with recycled water, data centers that do use water for cooling overwhelmingly rely on fresh supplies.

Even before the AI boom, tech giants were known guzzlers. In 2018, the industry was already one of the 10 largest commercial or industrial water users in the US, according to a 2021 paper in Environmental Research Letters. These companies are now pouring hundreds of billions of dollars into expanding their data center operations.

Business Insider used permits that data centers must get for their backup generators to create a comprehensive list of facilities, and mapped the names and addresses onto the World Resources Institute's water scarcity tracker. We found 24 of the largest centers, and 379 smaller ones, in the four states now negotiating over Colorado River allotments. Other water-scarce areas across the US, in places including Texas and the upper Midwest, also host large, water-hungry facilities.

Fragmented oversight

It can be difficult to determine exactly how much water any given data center uses. Hundreds of water districts control the taps, and many decline to disclose customer usage data. The companies closely guard the secrecy of their projects, often using limited liability companies and nondisclosure agreements with local officials.

Business Insider records requests were often blocked in water districts in Western states experiencing acute water scarcity. In Colorado, for example, Denver Water asked data centers in its service area whether they would give permission to release their records. All but one said no.

The utility then initiated legal action to prevent disclosure. In Arizona, Tucson and Scottsdale would release only anonymized data, citing local privacy laws. When Business Insider obtained economic development agreements for data centers, many localities redacted the water use, with at least one citing commercial trade secrets. Still, some data emerged.

Water use can vary widely. A pair of Amazon facilities in Hermiston, Oregon, used 66.8 million gallons of water in 2023. In Mesa, Arizona, Meta struck an agreement allowing a facility to use up to 4 million gallons of water a day — enough for nearly 49,000 people, based on an Environmental Protection Agency estimate that Americans use 82 gallons a day.

Even those numbers understate the total impact. The 2021 research paper, which was done by scholars at Virginia Tech and the Lawrence Berkeley National Laboratory, found that only about a quarter of data centers' water use was direct, through cooling. The other 75% was used indirectly, through the electricity generation data centers depend on.

Many tech companies don't incorporate the demands of electricity generation in calculating their water use, said Shaolei Ren, an associate professor of computer engineering at University of California, Riverside.

"We know the lifecycle water footprint of almost every agriculture-related product," reads one of his recent presentations. "But we have almost zero information about AI's real water footprint."

Melanie Roe, a spokesperson for Meta, described the amount of water the company was permitted for as a "theoretical maximum" and said actual use was expected to be less.

Across the West, public officials and utility managers are coming to grips with the increased demands on the region's water resources.

"The data centers bring up a little bit of a conundrum," Rebecca Mitchell, a member of the Upper Colorado River Commission who is the state's leader in the Colorado River talks, said in an interview. "If you're creating a larger draw on the system, you have to figure out where that comes from. And it's got to come from your own bank, not somebody else's."

Conserving water in Colorado

In Denver, the data center developer CoreSite withdrew its request for a $9 million tax break in October after the city council questioned the company's plan to use up to 805,000 gallons of water a day, or enough for 16,000 homes, The Denver Post reported. "I am very concerned about a tax incentive for a company that is using some of our most valuable resources," Councilwoman Flor Alvidrez said at an August council committee meeting.

In nearby Aurora, water officials have been among the most proactive in the country in limiting water use by data centers and other industrial superusers such as bottling plants and mines. Aurora has been one of the nation's fastest-growing large cities, and sees its water supply as a potential limiter on that growth.

"If you're going to come to Aurora," said Marshall Brown, Aurora Water's general manager, "you're going to have to figure out how to be efficient."

Several data center companies have gone to Aurora to meet with water officials, only to lose interest once they learned of its stringent water regulations, Greg Baker, then an Aurora Water spokesperson, said in August.

QTS, one of the nation's largest data center operators, with 34 US facilities by BI's count, has deployed a more expensive cooling technology that uses refrigerant for cooling. The annual water allocation for its facility in Aurora will be 525,600 gallons, according to Aurora Water records obtained by BI. That's less than what some facilities use in a single day, and equivalent to what a handful of restaurants might use, a QTS spokesperson said, adding that none of it would be used to cool the center's servers. Any more, and it will have to pay a surcharge, though that total doesn't include water for irrigation and other uses outside the QTS facility that are expected to require 1.1 million gallons of water a year, according to an Aurora Water official.

As of 2023, roughly half of the company's data centers used this water-conserving technology. A spokesperson for QTS, which is owned by the investment firm Blackstone, said none of the data centers the company had built since 2018 used water for cooling.

"A typical data center can consume up to 5 million gallons of water daily," QTS wrote in a 2023 white paper. "There is rising concern over how these facilities will impact water supplies, especially in areas that are already water-stressed. To be good neighbors, data centers need to adopt water conservation strategies."

Data centers in the desert

In August, Yadi Wang stood in the dried-out riverbed of a Colorado tributary about 100 miles southwest of Phoenix. The temperature was rapidly approaching triple digits, and it wasn't yet 10 a.m. Wang, the manager of Oatman Flats Ranch, explained how water once flowed through this stretch of the Gila River, populated by beavers and cottonwood trees. Now, he said, sporting a brimmed leather hat and Carhartt jeans, it's among the most barren places in the state.

"This is no different than the Sahara desert," Wang said, picking up a handful of the sandy soil. The bone-dry grains easily slipped through his fingers.

Since the 1990s, Arizona has been in an extended drought. Rising temperatures have only increased water needs. Phoenix set a record last year with 113 straight days of high temperatures at or above 100 degrees Fahrenheit.

Water access determines everything. In 1980, the state passed the Groundwater Management Act requiring cities and developers in some of the most populous areas to prove they had enough water for the next 100 years before they could break ground on a new project. Since then, the battle for water has only grown more intense. Gov. Katie Hobbs recently limited residential housing growth in an area outside Phoenix that failed to prove it had enough groundwater. Agricultural producers have set out to conserve water.

Yet, Arizona has become one of the country's largest data center markets. If all permitted Arizona data centers Business Insider identified go online, it will be the country's second-largest market after Virginia in terms of energy consumption and the sixth in terms of number of facilities, with 52. Maricopa County, home to Phoenix, features one of the nation's largest data center clusters, with 48 campuses.

Robust tax incentives, passed by state lawmakers in 2013, have propelled that growth. Companies flocked to the desert to take advantage of the free money, cheap and plentiful electricity, and affordable land. In 2021, lawmakers extended the breaks through 2033.

The state's fragmented system of water management hasn't kept pace. Water from the Colorado River is tightly regulated, and the 1980 law governs groundwater extraction near population centers, but wells outside those areas can operate largely without limit.

Big Tech firms can shop for municipalities willing to allocate the water that data centers require. They have found many takers, often in Phoenix's less prosperous outskirts, where officials in cities such as Goodyear and El Mirage have approved massive data center developments in recent years.

"The appetite of the council has been to welcome economic development into our city," Mayor Alexis Hermosillo of El Mirage said in an interview. Approving data centers, she added, was "in alignment with that thought process and those priorities."

5 million gallons a day

Ron Rayner has been watching as data centers go up to Phoenix's west. He and his family have farmed in Goodyear for decades, growing cotton, alfalfa, and other crops on land they own or lease. Their largely agricultural community has been transformed by development, including new Amazon warehouses, residential housing, and data centers.

Several years ago, Rayner pinned an aerial photograph to his office wall showing the land he and his brothers at the A Tumbling-T Ranches had under cultivation. Any time an owner of land they leased sold one of the plots to developers, they put a big X on the parcel. Rayner estimates they've lost about 2,000 acres, roughly a third of the land they once farmed.

"This map has just got all these big X's all over it," Rayner said. "They're gone, they're done, you know. They'll never be back."

One of those leases, for 260 acres in Goodyear, was terminated in 2018. The new owner was Microsoft, which bought that land and another 19 acres for $48 million to build a data center campus.

Initial water plans for the campus didn't survive. Microsoft went to the city council seeking fast-track authority to start constructing the first two centers on the campus, which it proposed would be cooled through direct evaporative cooling, one of the more water-intensive cooling technologies.

According to Goodyear city documents, Microsoft planned for each of the five buildings on its Goodyear campus to use 1 million gallons of water a day, for a total of 1.83 billion gallons a year. On average, that's enough water for roughly 61,000 Americans, or a bit more than half the city's population.

Microsoft's purchase of the land gave it ownership rights to underground supplies, but the thought of sucking up that much water for data centers in such an arid climate was daunting.

"The water situation was a little scary in the beginning," Stipp, the former Goodyear City Council member, told Business Insider, saying early projections suggested the company would have needed more water than its supplies could have provided. "You look at it and say, 'Holy smokes, that's a lot of water.'"

Microsoft won fast-track approval. Stipp said that he thought the anticipated tax revenue from Microsoft was too good for Goodyear to pass up and that the city's water supplies could handle the demand. But the company and the city still needed to figure out how to handle the enormous flow of wastewater that would result. Microsoft planned to treat its water discharge and send it by pipeline to a Goodyear drinking-water treatment plant, city documents said. As long as the treated wastewater complied with pollution rules, it could be fed into Goodyear's drinking water supply.

Microsoft soon changed course: The discharge from its data centers would overwhelm Goodyear's infrastructure. "Microsoft," reads a March 2023 city council report, "has effectively abandoned its original plan."

Microsoft's new proposal would instead send discharge to the city's wastewater treatment plant, making it more difficult for it to later be used as the city's drinking water. Then, another amendment: Microsoft's wasted water was so voluminous, 1.2 million gallons a day, that it would overwhelm the wastewater treatment plant, too.

Finally, Microsoft agreed that any buildings it constructed after the first three would employ mechanical air cooling, which uses more energy but less water. Goodyear agreed to expand its wastewater plant to process 3 million more gallons a day, enough to handle Microsoft's flow, at a cost of $90 million. Microsoft covered $36 million of that, and Goodyear the rest.

Wilsker, the Microsoft spokesperson, said the company altered course after conducting a feasibility study and also paid $9 million for other water infrastructure. Its three facilities use direct evaporative cooling only at certain temperatures, reducing water's use in cooling to less than 40% of the year, he said. Goodyear officials told Business Insider that data centers bring jobs and other economic benefits, and that Microsoft's current water plan let it rely on its state-designated water rights, so it wouldn't draw from the city's official supplies.

The offsets game

Tech companies have set bold commitments to offset their water consumption.

Microsoft, with 44 US data centers already built or underway, according to BI's tally, has pledged to be water positive by 2030 despite consuming a net 2.1 billion gallons of water in 2023, its sustainability report said.

Meta has said it will "return more water to the environment than we consumed for our global operations" by 2030. It has 32 data centers built or permitted, 28% of them in high or extremely high water-stressed areas, by BI's count.

Google — with 47 permitted US data centers, 19% in those acutely arid locations, Business Insider found — pledged to "replenish 120% of the freshwater" it consumes by 2030. In 2023, Amazon pledged to be "water positive" by 2030. The company said it was 53% of the way there by the end of last year. QTS set a goal of reducing its "water usage effectiveness" by 5% each year.

Like QTS, other companies are developing water-saving technologies. Google uses nonpotable water sources for some cooling, and Devon Smiley, a spokesperson, said the company had switched a Mesa facility to air cooling and wouldn't use water to cool future data centers in areas seriously short on water.

Microsoft is moving toward a design at its newest data centers in the Phoenix area that uses minimal water thanks to a closed-loop liquid cooling system, said Alistair Speirs, a senior director for cloud infrastructure at the company. At older data centers, Microsoft relies on adiabatic cooling, which uses water to wet a mesh-like material and forces air through the material with big fans to cool it down. When the ambient outside air temperature is below 85 degrees, that air is brought inside to cool the servers.

In August, Microsoft said all new data centers would be designed to cool the servers at the computer chip level, eliminating the need for water other than to fill the system during construction.

Industry experts say much data center technology still relies on millions of gallons of drinking water. Steve Solomon, a Microsoft vice president in data center engineering, said in an interview that data centers require drinking water if their cooling technology involves wetting the air that circulates inside the data center. If humans are to inhale it, the water must be free of bacteria or other pollutants, he said.

Google's data centers consumed 6.1 billion gallons of water in 2023, a 17% increase over the previous year, of which the vast majority was potable. In a 2024 report, Google said its data centers used the same amount of water needed for 41 golf courses in the Southwest. Ren, the UC Riverside researcher, calls the comparison "unfair at best," as many golf courses use wastewater, not drinking water, for irrigation.

Increasingly, municipalities in the arid West are deciding that data centers and other large water users require careful watching, and in some cases are pushing back on companies' asks.

In Mesa, where city officials limit water supplies to large users, Meta found a partner in the Gila River Indian Community, one of 30 tribes that live in the Colorado River Basin and the victor in a 2004 legal challenge that gave the community access to some of the river's contested water.

The water the community won would not only supply the needs of the 15,000 residents of its reservation just south of Phoenix, but also promised to power its economy.

The community partnered with a local utility to create Gila River Water Storage, which took the community's unused Colorado River allotment and created an underground reserve of 1.62 trillion gallons.

The community was standing by in 2021 when Mesa's officials told Meta it would need to find additional supplies for the water its proposed data center required. The city at the time limited large water users to about 500,000 gallons a day from city supplies (a cap it lowered last year), and Meta needed 2.5 times as much.

So Meta turned to Gila River Water Storage. Under a 25-year agreement with the city, the company purchased storage credits and transferred them to the city. Mesa then gave the company allowances that, provided Meta meets certain conditions, will let it pull up to 4 million gallons a day.

Jenn Duff, a Mesa City Council member and self-proclaimed "desert rat" who has lived in the Southwest her entire life, was the only council member to vote against the deal. She said she was startled by a report from the Kyl Center for Water Policy at Arizona State University that suggested Arizona might have less water than officials thought.

"We were in a severe drought, and we had a large water user coming in, and I started reading the publications, and I became alarmed," Duff said in an interview. She still carries around that report, its cover now torn, in her bag. "I just don't think water-cooled data centers should be in the desert."

According to the minutes of the vote, Mayor John Giles, who left office this year, voiced his support for the project and noted that the company had been informed about the need to purchase storage credits and advised about the need to be sensitive to water issues.

There's no guarantee that the water will be available through all of Meta's contract, as every claim on the Colorado's waters — including Indigenous allotments — is up for negotiation.

The Meta spokesperson told Business Insider that the company meets periodically with Mesa officials to ensure it stays in compliance with its water commitments to the city. Jason Hauter, a lawyer representing the Gila River Indian Community, said that while the future of available water supplies from the Colorado River was uncertain, "we do not foresee a future where this water supply is eliminated for central Arizona or for the Community in particular."

With less water-intensive cooling technologies still rare, companies have turned to a strategy known as "corporate water stewardship" to meet their goals. This involves paying other people to conserve water and then using a standard calculation to earn credits to offset the company's use.

Meta, for example, has helped fund drinking water access for the sprawling Navajo Nation and irrigation piping designed to prevent evaporation. In total, Meta has 12 projects in Arizona expected to restore 883 million gallons of water once they are built out, according to Roe, the spokesperson.

Microsoft, which also has purchased storage credits from Gila River Water Storage as part of its stewardship efforts, has also engaged in more controversial offset efforts as well. As part of a state conservation program, it helped fund compensation for the Colorado River Indian Tribes to leave 10,000 acres of farmland unplanted, a company report said, even though the practice of fallowing has fallen out of favor in the desert.

"When you fallow farmland in Arizona, you sterilize the land" by allowing nutrient-dense topsoil to blow away, said Dax Hansen, the owner of Oatman Flats Ranch. "It's just bad all the way around. The farmers make a little bit of money, but their land gets destroyed. You end up with more dust, more dust bowls, worse pollution, and all the rest."

"There is a healthy conversation about corporate water stewardship and how we manage it, and we are fortunate that the business community and corporations have been willing to do that," Kimberly Schonek, a project manager for The Nature Conservancy in Arizona, said in an interview. "We also want to be careful that we are not giving them cover."

Hannah Beckler and Rosemarie Ho contributed reporting.

Columbus, Ohio, escaped the Rust Belt rut years ago.

Regional economic development officials offered incentives that attracted warehouses, manufacturing plants, and healthcare startups, reviving the economy and generating jobs. By 2018, hundreds of these deals over the previous eight years had created some 150,000 jobs.

Central Ohio now hopes to repeat that success. It's betting big on "Silicon Heartland," a high-tech innovation hub that proponents hope will be flush with high-paying jobs. Economic officials have dangled multimillion-dollar tax subsidy packages before some of the world's biggest technology companies.

The resulting investment, Gov. Mike DeWine promised, "further cements Ohio as the heart of our nation's technology and innovation."

Mostly, they're getting data centers. Central Ohio has become one of America's hottest hubs for these computing warehouses, with companies including Amazon, Google, Meta, and QTS flocking there, lured largely by generous incentives.

The problem: Data centers, which operate largely autonomously, don't produce many lasting full-time jobs.

A Business Insider analysis of construction permits, economic development deals, and company disclosures found that even the largest data centers generally employ fewer than 150 permanent workers, and some have as few as 25. Building those data centers also creates significant numbers of construction jobs, but those are short term, sometimes lasting less than a year — far shorter than the duration of the tax breaks the companies get, which often last a decade or longer.

That means the tax breaks given to developers can amount over time to more than $2 million for every permanent, full-time job at an operational data center, Business Insider's analysis found. That's roughly eight times higher than the $262,000 average per job that watchdog group Good Jobs First found in 18 economic development deals worth at least $50 million awarded in 2023.

The number of jobs doesn't balance the cost, multiple economists and researchers who study tax subsidies told Business Insider — even factoring in the construction and other supporting roles that the tech industry uses to calculate its economic impact. Records show that the workforce on data center projects quickly tapers off, meaning industry estimates often significantly overstate long-term employment benefits.

The costs to the public don't end with tax subsidies. Data centers drive up electricity costs for other ratepayers as utility operators invest billions of dollars in new grid infrastructure to support escalating power demands. That has drawn opposition from other companies including retail giant Walmart, which has said that surging electricity bills are imperiling its expansion in states such as Ohio and Virginia.

Industry advocates argue the deals are worth it.

"Each new data center built in Ohio spurs a significant boost in investment, revenue, and wages that flow to Ohio businesses and workers, stimulating the state's economy," Josh Levi, the president of the Data Center Coalition, an industry advocacy group, wrote in an August 2024 op-ed article published by Cleveland.com. In recent US congressional testimony, he cited an estimate that data centers in Central Ohio supported more than "10,000 construction jobs, 2,000 data center jobs, and hundreds of maintenance and retrofitting jobs last year."

Drilling into the terms of specific economic development deals suggests a more complicated picture.

In 2021, for example, Google entered into a much-celebrated deal with Columbus to construct a data center campus. The city offered a 100% property tax abatement worth an estimated $54 million in tax savings over 15 years.

In exchange, the Google facility promised 20 full-time jobs at the data center, rising to about 40 jobs by 2047.

Pricing the 'Silicon Heartland'

Artificial intelligence is accelerating data center construction that already was growing quickly to power digital services from social media to medical care. In 2025 alone, Meta plans to spend at least $64 billion on facilities and equipment. Google's parent company, Alphabet, plans to spend $75 billion, and Microsoft said it would invest $80 billion.

Tech companies say their investments will supercharge local tax revenues and high-paying jobs will drive economic growth. Even with tax breaks, data centers contributed $162.7 billion in federal, state, and local tax revenue in 2023, according to a February 2025 PwC report prepared for the Data Center Coalition. The industry, the report said, supported 4.7 million jobs directly at data centers or indirectly through their supply chain.

Amazon, the biggest data center operator, calculates that its data centers each year have supported thousands of jobs, including 6,490 in Ohio and 20,700 in Virginia. Matt Hurst, a spokesperson for Amazon Web Services, Amazon's cloud-computing arm, told Business Insider the company was "proud of the good jobs we create, for the trust local communities invest in us, and for the opportunity we have to invest in those communities."

Meta says that its data center operations support 16,000 jobs and $1.2 billion in labor income annually, and that it has backed 440,000 construction jobs over the past decade. Google says its data centers supported 119,000 jobs and contributed $12.6 billion to US gross domestic product in 2023 across its supply chain, including construction. Microsoft's website says its data centers generate "public infrastructure improvements and tax revenue that serve as a catalyst for enhancing the quality of life."

"Our developments generate millions of dollars in tax revenue to support local priorities related to schools, roads, housing, and other critical needs, while also reducing the tax burden on residents," a spokesperson for QTS, which is owned by the investment firm Blackstone, said in a statement.

A Blackstone spokesperson also highlighted the benefits of data center development and said the company was "proud that our investment in QTS provides the digital infrastructure critical to the future of our country and economy."

Competition to score these promised benefits can be a race to the bottom, as developers pit state against state and city against city. New projects cluster in areas that offer the most competitive deals.

To investigate how these incentive deals play out, Business Insider identified areas of data center development and filed requests with all 50 states and Washington, DC, for the air permits that regulate backup generators at every data center. Business Insider compiled records for 1,240 data centers nationwide, the most definitive accounting to date, and requested records of data-center-related economic incentives from municipalities and states.

The largest data centers in Business Insider's analysis — the 322 massive facilities that we estimate consume 40 megawatts of electricity or more each — are heavily concentrated in a few places. Northern Virginia has 214, followed by Arizona's Maricopa County with 16, and Ohio's Columbus region with 9.

Thirty-seven states have tax incentive programs for data center investments. Most exempt developers from sales and use taxes on building materials, machinery, or equipment — resulting in big hits to state coffers. In Virginia, 56 data center projects cost $928 million in abated state sales tax in the 2023 fiscal year alone. Disclosures in Ohio estimate it forfeited nearly $360 million in data-center-related state tax revenue from the 2022 through 2024 fiscal years.

Mason Waldvogel, a spokesperson for the Ohio Department of Development, called the tax incentive program "a strategic tool used to create long-term economic growth by attracting high-value, capital-intensive projects." A spokesperson for the Data Center Coalition said state tax exemptions for data centers were consistent with programs for other capital-intensive industries.

Cities also offer incentives, including breaks on property taxes and reimbursements for building fees. Arizona cities largely don't give property tax abatements but allow the use of precious water resources. Virginia grants access to enormous amounts of electricity and critical infrastructure but requires data centers to pay local property taxes. Indeed, Northern Virginia cities generate up to 31% of their total tax revenue from data centers, funding fire departments, affordable housing, and other services.

In the Columbus region, Business Insider located 19 data center-related deals that, together with state-level abatements, amounted to at least $750 million in forfeited tax revenue for 770 full-time jobs employed at data centers as of December 2023.

The jobs generally pay well, averaging $100,000 a year in Central Ohio, according to company disclosures. At the Google data center in Columbus, salaries range from $74,000 for a data center technician to $162,000 for an operations manager.

Amazon tops the list with seven deals. In one, the northwest Columbus suburb of Dublin agreed to sell Amazon 66 acres, which the city valued at $100,000 an acre, for $1 in total. Amazon agreed to pay the farmers previously leasing the land up to $40,000 total to abandon their soybeans and corn crops and terminate the lease. It told Dublin it expected to hire 25 full-time workers by the end of 2018, a nonbinding projection. In contrast, Amazon projected that it would hire 1,000 Ohioans at a new fulfillment center in Canton several years later — without taking any local property tax abatements or state incentives.

Amazon's Hurst said the company works hard to create every job it projects.

'Let 'em walk'

The deals keep coming, from Batavia, New York, to Meridian, Mississippi.

Nathan M. Jensen, a professor at the University of Texas at Austin who studies regional tax incentive programs, said cities are better off sitting these deals out. Communities throw everything they can at tech companies, yet when the costs of lost tax revenue and escalating electricity prices are factored against what the communities get back in jobs, revenue, and prestige, "there's just no evidence that you're going to benefit from that data center," he said.

If data center developers threaten to walk from cities that refuse to compete for these deals, Jensen's advice is blunt: "Let 'em walk."

Jensen said data centers were shaping up like professional sports stadiums, where cities give millions in tax revenue savings in exchange for temporary construction jobs and minimal economic impact. Construction of data centers generally lasts one to two years, or sometimes longer, and many construction jobs run for only part of that period.

In Virginia, one analysis found that about 80% of jobs from data centers created over a recent two-year period were in construction. And the numbers of such data-center-supported jobs cited in this year's Data Center Coalition report may be misleading, multiple economists and researchers who study incentives told Business Insider.

Timothy Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research, a not-for-profit organization focused on reducing unemployment, said his own study suggests job numbers in the high-tech sector, like data centers, could be less than half of industry estimates.

Microsoft estimated last year that a campus with six data centers that it is building outside Cheyenne, Wyoming, would have 1,005 jobs at peak construction, falling to 335 full-time employees and contractors by the end of next year.

At a construction project in Columbus for the data center operator Cologix, one contractor, Baker Concrete Construction, had 63 people on payroll. Those jobs lasted an average of 6 ½ weeks. Cologix said that overall the site had an average of 146 workers during the project's construction.

Incentive packages often spell out how many jobs a company commits to creating in exchange for its tax breaks. Data center companies generally commit to deliver only the jobs inside their facilities in exchange for their tax breaks — not the construction and other ancillary jobs they say their projects create. Based on what is actually promised in such deals, those jobs can be expensive for local governments. Business Insider identified five deals in Ohio where, as of December 2023, each long-term job in the data centers cost over $1 million in abated taxes over the life of the deal.

An Amazon data center in Hilliard had saved at least $195 million in state and local taxes as of December 2023, according to annual disclosures, driving the price of each job to over $1 million in abated taxes. New Albany, Ohio, garnered 98 jobs at a Meta data center, but forfeited $189.6 million in state and local taxes as of the end of 2023 — making each job worth about $1.9 million in foregone tax revenue.

"We disagree with this way of thinking about the benefits we bring to communities," Amazon's Hurst said, adding that it benefits communities in ways beyond direct job creation, such as spending with local businesses and funding job-training efforts. A Meta spokesperson said it helps communities where it operates through grants and partnerships.

The Data Center Coalition spokesperson said that focusing on jobs inside data centers understates the impact on service providers and suppliers, such as electricians, HVAC manufacturers, and portable sanitation companies.

Companies are still required to make yearly payments to the cities in lieu of property taxes to help ensure minimum contributions to the communities, which Business Insider incorporated into our cost-per-job calculations. Meta, for example, paid $21.8 million in total to New Albany as of December 2022. A spokesperson for New Albany said the payments ensure "data centers contribute meaningfully to the community, even with tax abatements in place."

And tech companies often sweeten the deals by promising to invest in education programs to upskill local workers. Amazon, for example, donated $25,000 and some equipment two years ago to the Tolles Career & Technical Center in Plain City, Ohio, to support the school's IT and cybersecurity training programs, which include a four-week training program for entry-level data center workers. At the nearby Columbus State Community College, the company pledged $50,000 in scholarships for a new data center technician certificate program.

'Unprecedented' electricity use

The ultrapowerful computer chips crammed into data centers consume enormous amounts of power. A 2024 Department of Energy report estimates their electricity use, driven by the AI boom, could soon command as much as 12% of total US electricity use, from just over 4% in 2023.

Data centers are getting breaks on that, too — which residents and other businesses are helping pay for.

From 2020 through last year, Ohio data centers' load on the grid rose sixfold. By 2030, American Electric Power Ohio, the state's largest electricity provider, expects to grow by another 700% to reach 5,000 megawatts, enough to power at least 2 million homes.

If all hookup requests across more than 90 planned data center sites in Ohio are approved, AEP Ohio told regulators, demand could skyrocket to over 30,000 megawatts.

Since 2017, Ohio regulators have authorized multiple 10-year electricity rate subsidies for data center developers, reducing power costs for tech companies in exchange for their promises of new jobs. Other AEP customers have to pay for the shortfall.

Matt Schilling, a spokesperson for the Public Utilities Commission of Ohio, said in an email to Business Insider that while the commission had approved some discounted rates for data centers, it had denied other applications for such arrangements.

At the same time, AEP has proposed spending at least $850 million in new or upgraded grid infrastructure and power plants to serve data centers, and another $350 million in other upgrades to support Central Ohio's extreme demand growth, according to filings. Ratepayers across Ohio foot the bill for this too, as AEP spreads the costs across all customers.

Walmart, one of Ohio's largest employers, said last June that an increasingly expensive electricity bill — owing partly to data centers' demand — imperiled its continued expansion in the state. That warning came in a filing supporting the utility's recent proposition to increase tariffs and regulations on data center customers.

A Data Center Coalition representative warned regulators in 2024 that those proposed tariffs and restrictions in Ohio could "depress the growth of an important emerging industry." The rate case remains ongoing.

Regulators across the US have offered similar deals to subsidize data centers' electricity use, shifting billions of dollars of costs to all ratepayers, including residential customers.

Regulators last year OK'd Georgia Power to construct an estimated $300 million 35-mile high-voltage transmission line and a new substation for a QTS data center near Atlanta. And this year, South Carolina regulators authorized Duke Energy to invest $66.5 million to upgrade a transmission line to serve a new QTS data center. The utilities will recoup their investments by increasing electricity bills for all their customers.

Duke Energy said it follows federal rules in allocating upgrade costs. South Carolina's regulator declined to comment and Georgia Power and that state's regulator didn't respond.

A QTS spokesperson said it pays for all utility infrastructure dedicated to its data centers "to ensure no impact to residential rates."

"Utilities can fund discounts to Big Tech by socializing their costs through electricity prices charged to the public," a 2025 Harvard Law study of regulatory proceedings about utility rates for data centers found. Utilities profit, the study said, by "forcing the public to pay for infrastructure designed to supply a handful of exceedingly wealthy corporations."

Amazon, Microsoft, and Google told Business Insider they were committed to paying their full share for infrastructure serving their power needs. Tech companies and industry advocates say that other factors, such as electric vehicles, also are driving electricity growth and that the transition to renewable power drives up electricity costs.

To estimate the amount of power data centers demand nationwide, Business Insider used data from the air permits issued to data center backup generators. (See here for more on Business Insider's methodology.)

If every data center that's been issued a permit comes online, Business Insider estimates data centers' total electricity use across the country could reach between 149.6 terawatt-hours and 239.3 terawatt-hours a year. Business Insider's low-end estimate is roughly equivalent to the state of Ohio's electricity needs in 2023, and on the high end, is nearly as much power as the entire state of Florida used that same year. A 2024 federal report estimated US data centers' electricity use could reach the high end of Business Insider's estimate by 2026.

A 2024 report to Virginia's legislature found that data centers had historically paid their fair share of transmission upgrade costs but warned their sharply escalating electricity needs "will likely increase system costs for all customers, including non-data center customers."

Last July, Dominion Energy, Virginia's largest utility provider, asked regulators to approve a $23 million grid infrastructure investment billed across ratepayers, a request that is still pending. Regulatory staff said the investment was likely needed just for a single data center customer.

Months later, Dominion disclosed that it would need to roughly double its electricity generation by 2039 primarily to meet meteoric data center demand and new planned renewable energy capacity. Dominion estimates the planned expansion could cost up to $103 billion, increasing residential electricity bills by as much as 50%.

Aaron Ruby, a Dominion spokesperson, told Business Insider that the company had asked regulators to approve additional consumer protections to shield ratepayers from shouldering costs incurred by large customers like data centers. The planned increase in power bills is primarily driven by the utility's transition to carbon-free power generation, as is required by state law, Ruby wrote.

In Virginia, too, Walmart objected.

"Electricity is a significant operating cost for retailers such as Walmart," Lisa Perry, Walmart's director of utility partnerships, told regulators in February 2025, warning that increasing electricity rates would harm Walmart's investment in Virginia.

Andy Farmer, a spokesperson for the Virginia State Corporation Commission, said that data centers affected all the state's utilities, not just Dominion.

Data centers' ballooning power consumption leaves other businesses, residents, and utility regulators in a bind: Either pay to expand capacity for the tech companies, or risk going without enough power to attract other new business.

In Indiana, the River Ridge Property Owners' Association in Clark County told state regulators in 2024 that a single Meta data center project had bled nearly all remaining power from the grid. Meta promised at least 50 high-paying permanent jobs at the site and hundreds of construction jobs, but the community would have no available electricity to attract other prospective companies investing in the area for at least four years.

"It is possible these data centers ultimately restrict, rather than foster, additional economic development," a representative of the Citizens Action Coalition of Indiana, a consumer and environmental advocacy organization, told state regulators. By 2030, the representative said, "just a few" data centers used for applications like AI will use "more electricity than all 6.8 million Hoosiers use at their homes."

Walmart representatives told Ohio regulators last year that data centers' massive electricity use threatened the company's planned rollout of electric vehicle charging locations at its retail locations.

"Growth in data center development is an economic boon for Ohioans," Google representatives told regulators this year, adding that the facilities were "pivotal in establishing the state as a leading technology hub."

Walmart argues that it brings more jobs and other benefits to the local economy — a claim supported by research from AEP Ohio. The utility calculated that each megawatt allocated to traditional commercial and industrial customers like Walmart supported at least 25 jobs.

Every megawatt used by a data center, the utility said, supports less than one job.