Illinois Governor JB Pritzker proposed a two-year break from offering tax incentives for datacenters, a reflection of a growing public backlash against the huge, resource-hungry facilities used to power the modern AI boom.
Pritzker proposed the proposal during his annual State of the State address, which will require the support of state lawmakers, including the Illinois budget and policy plans. Plan was first reported By NBC News.
“In light of increasing demand and rising prices, I am proposing a two-year pause on the authorization of new datacenter tax credits,” Pritzker said. “With the changing energy landscape, it is imperative that our growth does not undermine affordability and sustainability for our families.”
Concerns over how datacenters impact nearby residents and deplete resources have become a growing political issue around the world, as companies invest huge sums in building huge facilities, often against the wishes of local communities. Amid bipartisan pressure ahead of the midterm elections later this year, several big tech companies like Microsoft and Anthropic have claimed they will cover rising power costs related to the demands of their datacenters.
In addition to calling for tax incentives to be suspended, Pritzker also demanded that Northern Illinois power grid operator PJM mandate that datacenter developers bear the additional cost of their power demands.
Pritzker said, “PJM should protect consumers from higher rates by forcing datacenter developers to pay for the capacity resources to power their operations.”
Much of Pritzker’s speech, and particularly the mention of datacenters, focused on the topic of affordability — a central political narrative this year amid the rising cost of living in the US and a major focus of Donald Trump ahead of his election in 2024. As both Democrats and Republicans make claims about bringing affordability, datacenters and their developers have increasingly come under criticism. Trump’s trade adviser Peter Navarro said earlier this week The administration could force datacenter builders like Meta to internalize power costs, though they offered no clarification on how that would work.
Illinois has been one of the first and more active states to advance legislation and policymaking around the AI boom. In 2024, the Pritzker signed a series of bills Related to the use of deepfakes for AI replicas and artists’ rights, employment discrimination, and child sexual abuse material. State lawmakers and Pritzker also vowed to oppose Donald Trump’s executive order last year that aimed to prevent states from making their own rules on AI. The state also has more stringent biometric privacy laws than the rest of the US.
Several other states, including Georgia and Oklahoma, have proposed a moratorium on new datacenter construction until more assessments can be made on potential regulation. A proposed bill in Georgia would put a halt to new datacenters until March next year, a significant pause in an industry that desires rapid advancement and uninterrupted growth.
