States rethink data center incentives as AI expansion strains power grids and water supplies

Summary

States across the U.S. are rethinking the tax breaks, incentives, and regulatory deals they once offered data centers, as the rapid expansion of AI infrastructure strains power grids, water supplies, and household utility bills. While the Trump administration pushes for faster data center buildout as critical to competing with China, state legislatures are grappling with local backlash and environmental concerns. Newsweek's review reveals a patchwork of responses: some states are tightening regulations and revoking incentives, while others continue to court the industry. The article highlights the tension between national AI ambitions and local resource constraints.