By Valerie Volcovici
Sept 19 (Reuters) - No company has announced plans for a data center in Defiance, a city of 17,000 people surrounded by soybean fields in northwestern Ohio.
But people in the aptly named community are not taking any chances.
After learning the county’s economic development group had fielded inquiries from tech companies, residents spent months gathering signatures for a November 3 ballot measure to ban all but the smallest data centers. City officials announced a six-month moratorium
on new project approvals.
The fight in Defiance is part of a broader political backlash throughout Ohio — and across the nation — where mounting public anxiety about AI and cloud-computing infrastructure has transformed data center construction from an economic success story into a contentious midterm elections issue.
Many in Defiance were already concerned about the impacts of AI development on farmland, electricity demand and water consumption. Their misgivings deepened this summer after the release of state tax records showing Ohio had foregone more than $2 billion in sales-tax revenue through data-center incentives in 2024 and 2025, benefiting companies such as Amazon and Meta.
Some 71% of Ohioans would now support a temporary ban on new data center construction, according to an August 31 poll from Bowling Green State University.
"Most people feel preyed upon by big business," said Becca Rupp, founder of Citizens for Responsible Development - efiance.
The groundswell building against data centers during election season has given Democratic candidates a new opening in the rural US Midwest, where they have struggled to compete during Donald Trump's presidency. Ohio is one of a handful of states with competitive races expected to decide control of Congress.
Ohio's Republican Governor Mike DeWine has suspended new applications for data center tax exemptions pending legislative reforms, but state lawmakers did not act before summer recess, leaving the future of AI development in Ohio uncertain — and ripe for political attack.
CLASH OVER TAX INCENTIVES
Democratic US Representative Marcy Kaptur faces one of the toughest reelection races of her four-decade congressional career, in a newly redrawn district that includes Defiance and other conservative rural areas.
She has leaned heavily into data-center messaging, running television ads accusing her Republican opponent Derek Merrin of supporting the unpopular tax incentives.
In a statement, Kaptur linked data centers to rising utility costs and wider concerns about corporate influence.
"Politicians are letting these companies pass the costs of their enormous energy and utility demands onto Ohio ratepayers, then handing them billions in tax breaks to sweeten the deal," she said. Residential electricity bills in Defiance rose 10% to 15% in June from a year earlier, according to utility FirstEnergy.
Merrin did not respond to requests for comment. In a Facebook post last week, he said Kaptur was “blaming me for a tax break for data centers that was enacted BEFORE I was even elected to the Ohio legislature.”
The issue has also featured prominently in the state's closely watched US Senate race, pitting Republican incumbent Jon Husted against former Democratic Senator Sherrod Brown, who lost his old seat in 2024.
With recent polls showing Brown leading, Republican groups have poured $14 million into advertising in Ohio in the past week alone, hoping to boost Husted's chances.
Brown has repeatedly criticized his opponent for promoting AI infrastructure development and tax incentives, describing him as "data centers' best friend."
“Ohioans, not Jon Husted and his billionaire friends, should get to decide if data centers are built in their community,” Brown’s campaign said in a statement.
Husted's campaign rejected the criticism, noting he has sponsored legislation that would require data-center operators to cover the cost of building more electricity generation and transmission.
“Sherrod Brown had three decades in Congress to lead on this issue,” campaign spokesperson Amy Natoce said in a statement. “Instead, he did nothing and is suddenly pretending to care in the middle of an election year.”
TAX SUBSIDY DISCLOSURE GALVANIZES ACTIVISTS
Lyn Cox, a leader of the local advocacy organization Conserve Ohio, said disclosure about the scale of tax subsidies transformed what had been a series of scattered zoning disputes into a statewide political issue.
"I think it was a huge turning point," said Cox, who lives in rural Waterville Township, about 40 miles (64 km) from Defiance.
She said candidates from both parties have been forced to engage with activists and develop formal policies on data-center development.
Republican gubernatorial candidate Vivek Ramaswamy, who previously voiced support for attracting tech investment, released an "Ohioans First" data-center proposal that would eliminate local property-tax abatements for data centers, direct revenue toward homeowner rebates and require projects to cover incremental residential electricity costs.
His opponent, Democrat Amy Acton, has proposed restricting tax incentives, requiring developers to pay for their own power infrastructure and mandating union labor standards. Both candidates have also called for limiting construction on productive farmland.
Cox remains skeptical of campaign promises from both parties.
"They're just words," she said. "They both came up with a policy because they're starting to understand this is a sleeper issue."
Conserve Ohio is pursuing a state constitutional amendment in 2027 that would ban the construction of data centers using more than 25 megawatts of power, while supporting similar local ballot initiatives across the state.
Activists are also pressing for more transparency from state officials, who have not disclosed how much revenue local governments have foregone through their own tax agreements with data-center operators.
The companies fueling the AI boom have defended their records.
Amazon says it has invested nearly $40 billion in Ohio since 2015; Meta points to more than $2.3 billion worth of investments in the state since 2018. Both companies say their facilities have generated tax revenue, jobs and other economic development.
For residents like Rupp, though, the debate now extends beyond data centers — to whether elected officials are willing to defend the public interest against big tech.
"This is definitely a breakdown between what government was supposed to do for small America and what it has failed to do for small America," she said. "I think data centers are at the forefront."
(Reporting by Valerie Volcovici in Washington, D.C.; Editing by Jesse Mesner-Hage, Timothy Gardner and Rod Nickel)
