Ohio is stopping a tax break. It helped Ohio get big new places for AI chatbots.

On Wednesday, Republican Gov. Mike DeWine made this move. Tax breaks for AI data centers that use a lot of energy are now part of state budgets. The industry must pay all the costs of the big network of computer buildings needed for AI.

Ohio’s tax break got much bigger than expected. Many people in cities, suburbs, and towns do not want data centers, so lawmakers made a group to study it.

In the meantime, people want to go around the GOP-controlled Legislature and get a vote on November’s midterm election ballot. This vote is to stop hyperscale data centers forever. It may be the strictest statewide ban like this in the U.S.

DeWine’s office said more people were using the tax break and the state Legislature was doing new research, so it said there was a “pause” for new people.

"The governor thought it was the right time to tell the people and businesses that we will stop new tax breaks while that process happens," DeWine’s spokesperson, Dan Tierney, said Thursday.

DeWine said he likes data centers. He said they are very important for the economy now. He also said the about $37 billion in data center investment in Ohio in 2024 and 2025 was good. At the same time, business groups, including the state Chamber of Commerce, and labor unions said stopping the tax break could make Ohio lose tech investment to other states.

In 2024, the state used old history to say the exemption would be $136 million in fiscal 2025 and $142 million in fiscal 2026. It was $554 million in 2024 and almost $1.6 billion in 2025, the state said.

Ohio’s tax break may start again under a new governor. DeWine cannot run again, and people are trying to choose a new one. The Republican nominee, Republican Vivek Ramaswamy, a biotech billionaire who went to an Ivy League school, likes to say he wants to make the Ohio River Valley the next Silicon Valley.

However, Ramaswamy and Democratic nominee Amy Acton could be on the November midterm ballot with the citizen-led plan to stop new large data centers being built across Ohio. It has a July 1 deadline to get more than 400,000 voter signatures.

State tax breaks for the very big data center industry are getting more criticism from governors and lawmakers.

The cost may go up because data center and AI spending make people in the U.S. spend more, and big tech companies keep spending more on big data centers.

In Virginia, budget talks have stopped for months because Senate Democrats want to end the about $1.6 billion tax break each year.

Thirty-eight states have a tax break for data centers, the National Conference of State Legislatures says.

Many were approved when data centers were small and growing parts of the economy, and before the late 2022 start of OpenAI’s ChatGPT began a big buildout of much bigger data centers.

Ohio does not tax many things. This is for building things and for expensive machines like server racks and cooling systems used in data centers. Operators may buy new server racks every few years as the technology gets better.

DeWine’s order was a big surprise.

Dorsey Hager, a leader of the Columbus/Central Ohio Building and Construction Trades Council, said he was upset with DeWine and wanted to know why the governor did that.

He said he was worried that people trying to finish plans or permits for a project might change their minds.

Lawmakers said the other side was there when they told people about their joint data center committee on May 13, and said their job was to make sure Ohioans have correct information about the money, environment, and safety impact of data center development.

"We know about plans to stop Ohio data center building during this very important time in America’s history," state Rep. Adam Holmes told a news conference. "This public worry is now very important to us and could have a big effect on Ohio and America’s future."

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