Data centers are the most visible physical form of the AI economy. They are arriving faster than many states and communities can evaluate them. They bring billions in private investment, expand local tax bases, and fund grid, fiber, and water improvements. But they also raise questions about electricity demand, water use, air quality, and whether communities get fair value for the incentives they grant.
This white paper offers state, regional, and local leaders a grounded, evenhanded account of both sides. It argues that data centers are best understood as enabling infrastructure—like ports, airports, and electric grids—whose value lies in the economic activity they support rather than the handful of permanent jobs they create. Drawing on new causal research, case studies from Loudoun County to Lenoir to Lancaster, and the wave of legislation now moving through more than 30 states, the paper shows why benefits concentrate where deals are well structured and thin where communities accept investment figures at face value.
With data center development shifting toward rural areas that often have the least capacity to assess the tradeoffs, the paper lays out the questions leaders should be asking, principles for responsible decision-making, and the distinct roles state, regional, and local leaders each play. Above all, it makes the case that public trust and sound governance are themselves competitive assets in the age of AI.