Loren Lippincott
There’s much in the news and social media today about data centers, but what are they? They are facilities that house powerful computers needed for artificial intelligence (AI), cloud services and the digital economy. China is investing hundreds of billions of dollars to build dozens of them, which helps Chinese companies develop better AI tools and supports national plans for technology leadership.
Global electricity consumption by data centers is projected to double by 2030, rising from 448 terawatt-hours (TWh) to 945 TWh per year (the same as Japan’s entire annual usage), driven heavily by artificial intelligence. In the U.S., data centers are expected to grow from 5.9 percent of the nation’s total power consumption to 12 percent by 2030, and up to 20 percent by 2035. Processing and answering live AI queries accounts for 90 percent of AI computing energy use.
Nebraska has quietly become one of the most data-centerdense states in the country. With around 39 facilities, the state ranks near the top nationally, trailing only Iowa in the Midwest corridor. Companies like Google and Meta have poured billions into the state, and the debate over whether that’s a win for Nebraska or a costly trade-off has only intensified in 2026.
On the plus side, data centers bring substantial construction spending and ongoing employment. Google alone has invested over $3.5 billion in Nebraska’s digital infrastructure since 2019 and supported an estimated 13,300 jobs annually between 2021 and 2023. Industry-funded projections suggest by 2035, data centers could contribute $4.8 billion to Nebraska’s economy, supporting more than 14,000 jobs and creating a steady demand for local contractors, electricians and suppliers.
Furthermore, large facilities generate significant property and sales tax activity, and supporters argue the net fiscal effect strengthens local budgets and funds schools and infrastructure in host communities. For a state historically anchored in agriculture, tech industries represent a new growth sector and a hedge against commodity price swings. On the other hand, since 2021 Nebraska data centers have received an estimated $519 million in property tax exemptions. Critics argue these subsidies cost the state more than the economic activity returns, especially since large tech firms would likely build in the state anyway due to our existing infrastructure and cheap power.
The most pressing concern, however, is electricity. Nebraska now ranks second nationally for the share of its electricity consumed by data centers, at 11.5 percent. One proposed Google facility alone would require more power than the entire city of Lincoln. Utilities like the Omaha Public Power District and Nebraska Public Power District have flagged rate increases of 3–6 percent this year, and while officials attribute much of that to rising equipment and labor costs, the timing has fueled public anxiety that ordinary ratepayers are subsidizing corporate power demand.
U.S. electricity prices rose roughly 27 percent nationally in the multi-year period leading up to the recent intense wave of AI data center construction. Rate increases are heavily tied to grid upgrades and general inflation, with regional spikes dramatically driving up local capacity costs ahead of active operations.
Meanwhile, cooling large server farms requires about the same amount of water as one center pivot irrigation system, or 1,000 gallons per minute per 1 MW of power used. Due to growing unease about water, land and power commitments made on residents’ behalf, some communities have pushed back by placing moratoriums.
The tension has reached the governor’s office and in July Gov. Jim Pillen signed an executive order suspending new state tax incentives for large-scale data centers under the ImagiNE Nebraska Act. He also established a task force to review policy safeguards for water and power resources. Rather than outright rejecting the industry, Pillen framed the move as wanting Nebraska to attract “givers, not takers.” Meanwhile, state lawmakers have debated bills addressing who pays for necessary grid upgrades and how utilities can meet surging demand without shifting costs onto households.
Nebraska’s data center boom has delivered real investment and jobs, but it has also raised hard questions about who bears the cost of powering an increasingly digital economy. As officials rework the incentive structure, the state’s experience may become a bellwether for how other Midwestern states balance the promise of tech investment against strain on shared public resources.
Loren Lippincott represents Legislative District 34 in the Nebraska State Senate. Read his column in the Nance County Journal.