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Arizona, a backbone for AI networks, is freezing tax breaks for data centers

Major players have set up shop since state incentives rolled out in 2013
Arizona is one of the country's most active hubs for data center development. Pictured is a campus under construction by NTT Data Group in Mesa. (CoStar)
Arizona is one of the country's most active hubs for data center development. Pictured is a campus under construction by NTT Data Group in Mesa. (CoStar)
CoStar News
July 9, 2026 | 7:33 P.M.

Arizona is the latest state to take measures to slow the development of data centers, as lawmakers and local officials seek to limit the physical backbone of artificial intelligence, often criticized for using too much water and power.

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