As cloud computing has become essential technology for business and personal users, the need for data centers is also on the rise. Many states and cities are investing heavily to attract the siting of data centers in their locales for the jobs and revenue they bring.

Ohio is one of those states. According to the online resource Data Center Map, Ohio has 156 data centers, and the numbers are growing.

Much of that growth is attributable to state and local government incentives. The online news source Cleveland.com reported in a July 2024 article that the state and several of its cities have invested hundreds of millions of dollars to attract more data centers there. According to the reporting, data centers are already estimated to claim nearly $123 million in state sales tax exemptions in 2024, and that number is expected to grow to $127 million next year.

Data center developers enjoy other tax breaks, too. Additional benefits include new job creation tax credits and property tax abatements from city and county governments, some of which reach as high as 100% for up to 15 years.

Not everyone is happy about the generous tax breaks afforded to data center developers, many of whom are tech giants, such as Microsoft and Google, that already enjoy the advantage of billions of dollars in resources at their disposal.

While attracting tech giants to build large computing facilities may be an enticing way to stimulate the growth of a local high-tech industry, the benefits of data center development may not live up to the hype. Development does bring construction jobs, and the facilities attract tech jobs after their completion, but the numbers typically are not as high as expected.

Data centers are also a huge drain on local grids. In a report released in January of this year, the market research firm Newmark projects power demand from the growing data center market in the United States to more than double in eight years, from 17 gigawatts (GW) in 2022 to 35 GW in 2030.

Earlier this year, the local branch of the utility that is servicing most of these new data centers in Ohio, American Electric Power Ohio, proposed a new tariff with the state's utilities commission. The tariff would require large data center customers to pay 90% of the cost of their projected energy use up front to help the utility cover the cost of constructing new transmission lines to accommodate the anticipated growth. Last year, the utility placed a moratorium on new service requests from data centers

Most of the data center development in Ohio is concentrated in the central part of the state, in the town of New Albany (near Columbus), but data centers are being developed throughout the state.

While Ohio is aggressively courting data center development, it still lags behind several other states and regions across the country. Currently, it ranks fourth. The locale with the largest number of data centers is Northern Virginia with 473. It is followed by California and Texas. Rounding off the top 10 are Illinois, New York, Florida, Oregon, Washington and Arizona.