Ohio suspends data center tax break as tech firms face pressure to pay the cost to power AI

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Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. skyrocket / ˈskaɪˌrɒk ɪt / (v.) – to increase or rise very quickly to a very high level or amount
    Example:

    The price of eggs skyrocketed last month because of the limited supply.


  2. dwarf / dwɔrf / (v.) – to make something seem very small or unimportant by becoming so big, large, or important
    Example:

    The company made a lot of money this month, dwarfing all the money they made last year.


  3. utilization / ˌyut l aɪˈzeɪ ʃən / (n.) – the act of using something for a practical purpose or in an effective way
    Example:

    The company changed its schedule to make sure there was better utilization of everyone’s time.


  4. undertaking / ˈʌn dərˌteɪ kɪŋ / (n.) – an important, big, or difficult job, task, or project that a person or group is responsible for
    Example:

    The university began a new research undertaking to find out how social media affects the well-being of young adults.


  5. exemption / ɪgˈzɛmp ʃən / (n.) – a specific amount of money or income that a person or company does not have to pay taxes on
    Example:

    The school’s building project saved a lot of money because its tax exemption was over $50,000.


Article

Read the text below.

Ohio, one of the nation’s data center destination hot spots, is suspending a tax break that has been critical to its competition with other states to attract the massive new facilities that power and train artificial intelligence chatbots.


The move by Republican Gov. Mike DeWine comes as tax breaks for energy-hungry AI data centers are increasingly playing a role in state budgets, and the industry is under pressure to pay the full costs of the vast network of its computing warehouses needed to power AI.


The size of Ohio’s tax break skyrocketed, dwarfing previous projections, as opposition to data centers is sweeping through cities, suburbs, and towns there and prompting lawmakers to form a committee to study the impact.


In the meantime, residents are trying to bypass the GOP-controlled Legislature and get a referendum on November’s midterm election ballot that’s designed to permanently ban hyperscale data centers, likely the strictest such statewide ban under consideration in the U.S.


DeWine’s office cited the rising utilization of the tax break and the state Legislature’s new research undertaking to declare a “pause” in granting it to new applicants.


“The governor felt it was the right time to let the citizens know, let businesses know that we’re going to pause on new offers of this tax incentive while that process plays out,” DeWine’s spokesperson, Dan Tierney, said.


DeWine stressed that he supports data centers—calling them a critical component in today’s economy—and that the roughly $37 billion in data center-related investment in 2024 and 2025 in Ohio has been worthwhile. Meanwhile, business groups—including the state Chamber of Commerce—and labor unions warned that pausing the tax break put Ohio at risk of losing tech-sector investments to other states.


The state, in 2024, had used previous history in projecting that the exemption would total $136 million in fiscal 2025 and $142 million in fiscal 2026. It was $554 million in 2024 and nearly $1.6 billion in 2025, the state reported.


This article was provided by The Associated Press.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • Do you think it is fair for governments to give huge tax breaks to wealthy tech corporations if it means losing unexpected amounts of public money? Why or why not? Discuss.
  • The article shows that Ohio gave huge tax breaks to AI companies to attract them to the state. In your opinion, what kind of businesses or people deserve to get a tax break from the government? Why? What rules do you think the government should follow before they give a tax break to an industry,  business, or group of people? Discuss.

Discussion B

  • The article says that opposition to data centers is sweeping through Ohio towns, but business groups warn that pausing the tax break puts tech investments at risk. Which do you think is more important for leaders: to try to get big business investments to help the economy, or to stop when local people object? Why do you say so? Discuss.
  • Imagine that a big tech company announces plans to build a massive, energy-hungry data center right in your neighborhood. Would you be okay with this plan, or do you think you would try to stop it? Why do you say so? Discuss.