Op-Ed: The Painful Costs of Pausing Data Center Incentives – Governor JB Pritzker deserves credit for taking Illinois’ energy future seriously. His recent executive order launching a new nuclear energy framework shows he understands that meeting the state’s growing electricity needs — both generation and transmission — is essential.
But his proposed two-year pause on data center tax incentives risks undermining the very future he’s trying to build.
Every few decades, leaders at every level of government face hard choices about building generational infrastructure that will define the next era of American life. In the 1950s, it was the Interstate Highway System. In the 1990s, it was broadband and the internet. Both required enormous public investment, disrupted communities, and sparked fierce local opposition. And both proved transformational — not just for the states that led, but for the nation.
We are in another one of those moments, and America’s fiercest competitor, China, is in a sprint for global innovation leadership. The decisions governors, state legislators, and local officials make right now about energy, data center infrastructure, and AI investment will shape our economic competitiveness and national security for decades.
Illinois is ground zero for proving whether America can get this right and maintain our tech leadership – and all the benefits for Americans that that leadership enables.
The state has every reason to be confident. Since 2019, Illinois companies have secured nearly $10.7 billion in AI and machine learning venture capital across roughly 500 deals. The Illinois Quantum and Microelectronics Park and the global corporations investing there are expected to generate more than $20 billion in economic impact and create thousands of jobs. Those breakthroughs depend on the computing capacity that data centers provide.
A two-year pause won’t pause the industry. It will relocate it. Data centers require massive upfront capital and years of planning. Companies don’t wait for moratoriums to expire. Instead, they move to states offering clearer, more predictable pathways for investment.
And the jobs that move with them aren’t just for software engineers. Data center construction puts electricians and building trades to work for years. The facilities themselves employ operators, maintenance technicians, and cybersecurity specialists — skilled positions earning strong middle-class wages. Illinois should be the state that proves AI creates opportunities for workers who don’t only write code.
The prevailing narrative blames data centers as the cause of Illinois’ energy strain. That gets the story exactly backward.
The pressure on the grid reflects decades of underinvestment in America’s electric infrastructure — a structural challenge that existed long before the first hyperscale facility broke ground. Data center operators bring the capital, the long-term contracts, and the economic justification that utilities and grid operators need to invest in new generation and transmission capacity. Companies don’t build power plants on speculation. They build them when someone is ready to buy the electricity. Pull the demand away and you pull the economic case for the upgrades Illinois needs regardless.
The real question isn’t whether Illinois can afford to invest in both energy reliability and technological growth. It’s whether the state can afford not to. Treating affordable energy and advanced technology as complementary goals — not competing ones — is the smarter path.
That path matters beyond Illinois’ borders. The United States holds a narrow lead in the global AI race, but China is closing the gap fast — generating twice as much electricity as we do annually and graduating 27 million more Science, Technology, Engineering, and Mathematics (STEM) graduates than the U.S. will over the next decade. Beijing isn’t pausing, it’s pushing forward. Every American state or community that presses pause on data centers and tech innovation makes that gap a little easier for China to close.
Illinois has articulated an ambitious vision of becoming a hub for quantum computing and advanced research — a vision with global significance. Achieving it means demonstrating that economic growth and reliable, affordable energy can advance together. Get that balance right, and Illinois doesn’t just secure its own future. It helps determine whether the United States or its authoritarian adversaries set the terms for the technologies that will drive the global economy.
Every generation faces a foundational infrastructure challenge. This is one of them. If we meet the moment with a bias toward building and advancing innovation, America will continue to lead. If we don’t, someone else will build that future for us.
Doug Kelly is CEO of the American Edge Project.
Op-Ed: The Painful Costs of Pausing Data Center Incentives
