U.S. states that previously incentivized data centers are reconsidering their stance by withdrawing sales tax breaks, a move that could significantly increase the operational costs of AI computing. Arizona, Illinois, and Ohio are among the states that have paused or narrowed these tax incentives, covering key components like computer equipment and server gear. The repeal of such incentives is expected to raise costs by approximately 7% or more, potentially increasing the price of IT equipment for a 1-gigawatt data center by billions of dollars. This development could influence companies heavily invested in AI infrastructure, such as NVIDIA, whose position as the largest company by market cap is currently estimated at 79.5% probability by August 2026.
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