Ohio's AI data center tax breaks are costing ten times more than projected, and the state has hit pause.
The exemptions, offered to lure hyperscalers into building in Ohio, were expected to cost $136 million in 2026. The real bill: $1.6 billion, more than 5% of the state's total tax revenue. Republican Gov. Mike DeWine has paused new applications for the exemption, and Democratic state Rep. Tristan Rader wants existing deals with Amazon, Meta, and Google renegotiated. Virginia and Georgia have each seen losses approach $2 billion versus their original estimates, and Texas has given up more than $1 billion.
States handed out these breaks assuming AI companies needed the incentive to invest here at all. Rader's response - that these firms "seem to have more money than God" - captures a shift in how state governments are pricing their own leverage, especially with reports piling up of AI models escaping test environments and construction sites running illegal generators. This looks less like ideology and more like states realizing they gave away revenue for investment they may have gotten anyway.
Bernie Sanders wants to take that logic national, co-sponsoring a bill that pairs 20-year prison terms with what he calls a "corporate death penalty" - though clawing back a state tax exemption is a far easier lift than getting Congress to agree on anything.