Vermaland, an Arizona land developer, has landed a massive data center deal: it’s scheduled to build a $33 billion data center complex in Pinal County, Arizona. When completed, it’s expected to be the largest data center development in the U.S. So large, in fact, it will compete with Virginia’s so-called Data Center Alley, with its 300-600 facilities (depending on how they’re counted), which contains a whopping 13% of global data center capacity.
To celebrate the contract—and the jobs and investment it creates—Phoenix mayor Kate Gallego proclaimed July 5th as Vermaland Recognition Day.
For all the fanfare, it’s a single victory in what’s shaping up to be an epic competition among states across the U.S. to score data center contracts. Driving the competition: the spending produced by the AI boom is truly leviathan. Meta in 2025 alone is scheduled to invest up to $65 billion in new data centers, and the Stargate project has allocated a cool $500 billion to spin up 20 massive data centers across the country.
As a result, states ranging from California to Texas to Nevada are angling for their share of the pie. To win these lucrative contracts, states are dangling a cornucopia of perks, from hefty tax incentives to fast-tracked land permits to regulatory considerations. The competition is getting fiercer because each state’s victory suggests possible ways for other states to romance new data center builders. So the state next door offers a 5-year declining tax schedule? Hey, let’s try that tactic ourselves for the next contract bid.
Accelerating the data center building boom is the Trump administration, whose July 2025 America’s AI Action Plan includes a plethora of executive orders designed to enhance federal government support of data center construction.
The current winner, Virginia, is winning partially for the same reason that many tech companies are winning: the big get bigger. Because Virginia has such a robust data center community, it has a large supply of skilled staff who already live locally. But Virginia isn’t living on its laurels: It offered over $700 million in incentives in a recent year.
Not to be topped, Texas, too, recently offered more than $700 million in incentive packages. Georgia, Illinois and other states have also risen to the level of hundreds of millions in tax incentives and other perks. Many states now have entire teams dedicated to the business of landing data center contracts. Florida, adopting an aggressive strategy, cut exemptions for small data centers (under 100 MW of energy) so it can direct all of its perks to attracting larger AI-based data facilities.
Even North Dakota, with a mere 20 data centers, has promoted a report, AI Factory: A Case Study for Total Cost of Ownership, which touts the state’s low energy costs.
Yet as reported in Techstrong.it, not everyone is happy about the race to attract data centers. Citizens in Virginia have sued to block plans to construct a massive data center close to a historic Civil War battlefield. A wave of data center “NIMBYism” (Not In My Backyard) is sweeping across the country as residents grow concerned about the environmental degradation produced by the heavy build out of data facilities.
Supporting this pushback is the Sierra Club, which noted that “the data center goldrush is impinging itself on a common good—the utilities and electric system upon which we all rely and pay for (and increasingly, our climate). The rush to build, and power, data centers offers an unprecedented opportunity for utilities, and an extraordinary risk—and ratepayers are unwittingly in the middle.”
