"Over the past two decades, many U.S. states have introduced tax incentives to attract investment in data centers. We provide causal evidence that incentives double data center construction at the state-level. However, these effects are present only for large, high-power facilities used for cloud computing and, more recently, LLMs. Smaller data centers are mostly unaffected. The incentives primarily reduce operating costs and capital expenditures, and lead to annual savings in the millions of dollars for large facilities. Despite these substantial long-term subsidies, we find no clear evidence that data centers stimulate local growth in tech employment."
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5881105
#USA #DataCenters #TechEmployment #TaxIncentives #CloudComputing #LLMs #AI