Whether the quick rise of data centers in Georgia will ultimately prove good or bad for the state’s economy is a hotly debated topic this summer.

Georgia boasts the fastest growing data center market in the nation, behind only Virginia – the world’s largest data center market – in volume. Data centers are creating jobs and boosting local tax bases, particularly in tax-revenue starved rural communities.

“Data’s the new oil,” said Chris Clark, president and CEO of the Georgia Chamber of Commerce.

But critics say data centers are more of a drain on host communities than a benefit, sucking up huge quantities of electricity and water in exchange for an uncertain impact on local tax rolls.

Amy Sharma, executive director of the nonprofit Science for Georgia, which tracks the use of science in public policy, compares data centers to plagues of locusts.

“They come in and max out, then move on to the next place once they run out power or communities start paying attention, ” she said.

Estimates of the number of data centers that have set up shop in Georgia vary. A list compiled by Science for Georgia shows 97 data centers operating in the Peach State, with 27 more in the planning stages.

Dallas-based DatacenterHawk, which conducts research for the industry, reports 72 data centers operating in Georgia with 14 more under construction.

Through 2023, data centers contributed $25.7 billion to the Peach State’s Gross Domestic Product and $1.8 billion in state and local tax revenue while supporting 30,070 direct jobs and 176,790 total jobs, according to PricewaterhouseCoopers, one of the “Big Four” accounting firms.

Clark said new data centers announced this year alone take up about 30 million square feet of space, representing an investment of $40 billion. By comparison, shopping malls typically occupy 400,000 to 800,000 square feet.

With such a huge footprint, data centers have been getting pushback from state and local elected officials worried about their potential adverse effects.

The General Assembly passed legislation last year calling for a temporary suspension of a state sales tax exemption aimed at attracting data centers. But Gov. Brian Kemp vetoed the bill after the Georgia Chamber and other business groups argued that doing away with the tax incentive would discourage corporate investment.

This year, Georgia House Speaker Jon Burns formed a special committee to develop a plan for coping with the growing demand for energy and water data centers and other “large-load” electric customers put on supplies.

Also this year, state Sen. Chuck Hufstetler introduced legislation to prohibit utilities in Georgia from passing on the costs of providing electricity to data centers to their residential and small business customers. The bill cleared the Senate Regulated Industries & Utilities Committee but failed to reach the Senate floor after lobbyists representing utilities including Georgia Power opposed it.

Hufstetler said he plans to bring the legislation back for consideration when lawmakers convene for the 2026 session in January.

“If we could get these costs off of residential and small business customers we could lower their rates in Georgia,” Hufstetler wrote in an email to Capitol Beat. “I hope we can pass it and codify into law that everyone pays their fair share of the costs.”

Some local governments have weighed in by restricting data centers or banning them outright. The Atlanta City Council voted last month to prohibit data centers from setting up in some neighborhoods and require developers to seek a special-use permit for construction.

In May, the Coweta County Commission approved a moratorium on data centers after a developer proposed Project Sail, a massive 13-building data center on more than 800 acres along U.S. 27 near Newnan.

Todd Edwards, director of governmental affairs for the Association County Commissioners of Georgia, said the reception counties have given data centers is “a mixed bag.” Residents who live near data centers often complain about the noise.

“Counties usually look at the benefits of the [property] taxes,” Edwards said. “But neighbors may not be warm and fuzzy about it.”

Sharma said data centers don’t tend to create enough permanent jobs in their host communities to justify the tax incentives they receive. Those cities and counties don’t even get a clear picture of the tax revenue data centers will bring in because developers aren’t forthcoming with details on the projects they’re planning, she said.

“The tax benefits are hard to pin down because there’s not transparency,” she said.

Dan Diorio, vice president of state policy for the Virginia-based Data Center Coalition, an industry trade association, said the number of jobs data centers create often are undercounted because they don’t include jobs generated by data-dependent companies that locate near data centers.

“Data centers create strong business ecosystems around them,” he said.

Diorio said even the construction jobs data centers create – typically considered temporary – can last for years because workers tend to move from one data center to another once a project is completed or from one building within a large data center complex to another.

“We’re seeing these construction jobs turn into seven, eight, nine, 10-year jobs,” he said.

Clark said data centers also don’t impose the high costs of local infrastructure like schools and roads that accompany new manufacturing plants, while the permanent jobs they do create tend to be high-paying.

But Sharma said momentum against data centers is building in Georgia as residents become more aware of their potential negative impacts.

“Now that people are starting to understand what they are, we’re getting a lot of people stepping up,” she said. “The outcry is going up, not down.”

Capitol Beat is a nonprofit news service operated by the Georgia Press Educational Foundation that provides coverage of state government to newspapers throughout Georgia. For more information visit capitol-beat.org.