Ohio Governor Mike DeWine has suspended a tax break crucial to attracting data centers, as the state grapples with soaring costs linked to AI infrastructure. The move, announced on Wednesday, comes as the tax exemption's value skyrocketed far beyond initial projections, reaching $1.6 billion in 2025 compared to earlier estimates of $142 million.
The suspension will remain in place while a legislative committee studies the impact of data centers. DeWine's spokesperson Dan Tierney described it as a 'pause' on new offers, allowing time for review. Despite the halt, DeWine emphasised his support for data centers, noting they are vital to the economy and have attracted $37 billion in investments in 2024 and 2025.
Opposition to data centers is growing across Ohio, with residents pushing for a November ballot initiative to permanently ban hyperscale facilities. The measure, which would be the strictest statewide ban in the US, requires over 400,000 signatures by July 1. Meanwhile, the race to succeed DeWine, who is term-limited, includes Republican Vivek Ramaswamy, who advocates for turning the Ohio River Valley into a tech hub.
Ohio's tax break is broad, covering construction materials and expensive equipment like server racks and cooling systems. Critics argue it is outdated, as data centers have expanded dramatically since the launch of ChatGPT in late 2022. Similar tensions are playing out in Virginia, where lawmakers are debating eliminating a $1.6 billion annual tax break for the industry.
Union leader Dorsey Hager expressed concern that the suspension could deter developers finalising plans. Lawmakers acknowledged public concern, with state Representative Adam Holmes stating that the issue has become a priority that could affect Ohio's future.
