2 Southern Republican governors and a Midwestern one embrace AI data centers as revenue jackpot

Three Republican governors from Southern states embraced artificial intelligence data centers as economic game-changers while rejecting government subsidies for clean energy during a panel at the Southern States Energy Board conference. The governors of Mississippi, Georgia, and Missouri advocated for market-driven energy solutions as Southern states compete to attract AI data center investments that could generate substantial tax revenues and transform rural economies.

What you should know: Southern states are aggressively pursuing AI data center investments as major tech companies expand their infrastructure footprint.

• Meta announced a $1.5 billion investment in a 1.3 million square foot data center in Montgomery, Alabama, to support its AI operations across Instagram, Threads, and WhatsApp.
• The University of Alabama committed up to $100 million for an AI data center, including development of “BamaGPT” for students.
• Google previously received up to $50 million over 10 years in Alabama incentives for building a data center at a former coal plant in Jackson County.

The big picture: Republican governors see AI data centers as transformative economic opportunities while maintaining their opposition to clean energy subsidies.

• “I’m a free market guy,” said Missouri Gov. Mike Kehoe. “I’m not sure the residential end user will want to pay more for renewables but if these larger corporations are willing to pay more and to invest in it, then ‘giddy-up,’ let’s get at it.”
• Georgia Gov. Brian Kemp noted that a county official told him data center development could “bring in so much revenue” that it might “wipe out the property taxes for an entire community.”

Why this matters: The competition for AI data centers reflects broader tensions between economic development incentives and concerns about corporate welfare for trillion-dollar tech companies.

• According to CNBC analysis, state tax exemption beneficiaries include Amazon, Meta, and Google, all with market caps exceeding $1 trillion.
• Alabama legislation last year proposed $400 million in additional tax incentives for data processing centers, though it failed to win approval.

Workforce challenges: The governors acknowledged significant skills gaps that must be addressed to support the AI economy.

• “We need 500,000 electricians to build out transmission lines and data center work. We also need 150,000 machinists,” Kemp explained.
• Mississippi Gov. Tate Reeves highlighted the potential for “astronomical” job growth, particularly citing the xAI complex in Whitehaven, Tennessee, near the Mississippi border.

Energy efficiency concerns: Governors acknowledged growing energy consumption challenges while advocating for market-based clean energy adoption.

• Kemp cited a Meta data center built eight years ago that was later upgraded to run on clean solar power based on the company’s preferences.
• “Hopefully, 10 years from now, a data center will use 5 to 10 percent (less) electricity than it’s using now,” Kemp said. “And hopefully a whole lot less water.”

Local resistance factors: Community concerns about data centers stem partly from misunderstanding their operations and environmental impact.

• Kehoe emphasized the need to address “fear factor” issues, noting that substantial capital investments demonstrate long-term corporate commitment to these projects.
• Rural Southern communities face particular challenges with declining populations and loss of traditional manufacturing and healthcare jobs.