AI Data Centers Should Pay Kansas for the Resources They Consume
As artificial intelligence companies expand data center operations across the country, they're asking states for tax breaks and public support. Kansas should demand compensation instead.
The companies pursuing these projects signal they need public money when they use rhetoric about "welcoming development with open arms." Beale Infrastructure recently withdrew its proposed data center in Gardner after failing to secure incentives, illustrating how these firms shop for handouts.
Job Creation Claims Don't Match Reality
Proponents argue data centers will bring employment to Kansas. The math doesn't support that claim.
AI companies receive billions in investment partly on promises to increase productivity-which corporations interpret as cutting jobs. A $3 billion data center in De Soto may create 100-plus permanent positions. Meanwhile, Oracle laid off 30,000 workers using AI-driven automation. That's a net loss for the region.
The Hidden Costs of AI Infrastructure
Data centers consume enormous amounts of electricity and hardware. A recently approved facility in Utah will use more power than the entire state, supplied by new gas-powered plants.
The demand has rippled through the electronics industry. Chip suppliers like Samsung and Micron have cut consumer memory production to chase higher-margin AI contracts. Everything with a circuit board costs more as a result.
AI companies have the resources to build efficient systems but choose not to. They buy more servers instead of writing better code. If forced to optimize, they would.
Tax Revenue Doesn't Offset Incentives
Officials claim data centers will increase tax revenue for public services. If states must offer tax breaks to attract them, those revenues simply return to the companies as subsidies.
A Different Model: An AI Dividend
AI models train on data from the public-location history, purchases, health records, social media posts. That data has enormous value. Tech companies have received it free through ad-supported apps.
As that data becomes more valuable, compensation should follow. States could charge companies for using American data, deposit the revenue into a fund, and distribute it to residents as an annual dividend. Alaska operates a similar model with oil and gas production.
Without policies ensuring broad benefits, AI will follow the pattern of previous technologies: concentrating wealth among executives and investors while the public bears the costs.
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