Everyone wants to talk about AI's potential. Nobody wants to talk about the massive physical infrastructure required to run it. Ohio is learning that lesson the hard way as communities push back against a data center boom that's straining power grids, using massive amounts of water, and delivering far fewer economic benefits than promised.
Rick Platt, CEO of the Heath-Newark-Licking County Port Authority, put it bluntly: "The economic impact of data centers is truly weak." He argues there's no justification for incentivizing their arrival.
The numbers back him up. One large data center occupies 350 acres with just 70 jobs averaging $75,000 annually. A nearby 350-acre industrial park hosts 20 manufacturers employing 2,070 people at similar wages. That's a 30-to-1 employment ratio for the same land footprint.
Data centers are infrastructure, not employers. They need power and cooling, not people. That's fine if communities understand the tradeoff. But many were sold economic development promises that didn't materialize.
The power demand issue is particularly acute. The Ohio Manufacturers Association correctly notes that data centers contribute significantly to electricity demand. Worse, utilities reportedly have a "bidding system that favors reporting higher electricity demand than can be proven," meaning ratepayers subsidize infrastructure for facilities that may not need it.
Water usage for cooling is another flashpoint. Data centers need massive amounts of water to keep servers from overheating. In drought-prone or water-stressed regions, that creates direct competition with agriculture and residential use.
New Albany has 40 data centers—an astonishing concentration. The city implemented a progressive solution: data centers must pay "a payment in lieu of payroll tax" equivalent to what human workers would generate, addressing the low-employment problem through taxation.
Ohio attracted data centers with strong electrical infrastructure and hurricane-free geography. Those advantages are real. But communities are discovering that "jobs and economic development" promises were oversold.
This backlash represents unusual bipartisan agreement. Local officials across political lines are skeptical about data centers' genuine community benefits. That's rare in American politics and suggests the economic pitch isn't holding up.
The AI boom requires physical infrastructure. Training frontier models needs warehouse-scale compute. But the costs—power, water, land, infrastructure strain—fall on local communities while profits accrue elsewhere.
The technology is impressive. The question is whether local communities should subsidize AI infrastructure that provides minimal local benefit. Welcome to NIMBYism meets the cloud.
