Amazon, the tech and online retail juggernaut, is expanding its physical footprint, with a little help from Pennsylvania taxpayers.

"Amazon plans to spend $20 billion to build two data centers in Pennsylvania, a move that state officials say will generate thousands of jobs over the next decade and stoke considerable economic activity," wrote Stephen Caruso and Kate Huangpu of Spotlight PA, an independent media outlet. "But many key details, like the centers' full impact on electricity supply and prices, and the amount of tax revenue the state will forfeit to Amazon, are still unknown."

"In March 2024, Talen Energy sold its 960-megawatt (MW) data center to Amazon Web Services (AWS) for $650 million," Jeff Luse wrote in November 2024 for Reason. "The data center is a co-located facility, meaning it will draw electricity directly from Susquehanna Steam Electric Station—a nuclear power plant that generates 2.5 gigawatts of power annually—rather than from the grid." The other facility will be located in a former U.S. Steel mill and hook into the state's existing power grid, and there is the possibility of a third facility later on.

The data centers will support Amazon's artificial intelligence and cloud computing, which require substantial processing power. Rick Siger, secretary of the Pennsylvania Department of Community and Economic Development, said the project "will drive enormous positive tax impacts for our Commonwealth, counties, and municipalities, and will create at least 1,250 high-paying, high-tech jobs as well as thousands of construction jobs."

Unfortunately, that's not a guarantee. "The data center industry has grown rapidly in recent years, and state governors have touted the jobs it would create," Ellen Thomas wrote at Business Insider. But "once built, data center facilities don't employ large numbers of permanent employees, and the economic development contracts they sign in exchange for tax incentives often reflect that."

Data centers do initially create plenty of work for construction crews, but once operational, they require only a small permanent staff for general upkeep. "Most permanent data center jobs are in security and landscaping, alongside a handful of technicians who monitor the facilities' computers," write Caruso and Huangpu, citing Greg LeRoy of public subsidy watchdog organization Good Jobs First.

In fairness, Pennsylvania is spending considerably less taxpayer money than most states do to attract new businesses. Officials in St. Joseph County, Indiana, voted last year to give Amazon tax breaks and incentives worth $4 billion or more, to build a data center in the area. Arlington County, Virginia, offered Amazon as much as $750 million to build its second corporate headquarters there.

On the other hand, Pennsylvania's "only direct financial investment" in its Amazon data centers will come in the form of "$10 million for 'targeted workforce development efforts,'" Caruso and Huangpu write. But that doesn't mean Keystone State taxpayers are otherwise off the hook: "Pennsylvania didn't offer a new, targeted incentive package to Amazon, but the tech giant has already been approved for a tax break that the commonwealth gives to companies that build data centers here."

A state program exempts large data centers from paying sales tax on any purchases of certain "computer data center equipment." Any company that spends at least $75 million of "new investment" to create a data center that "creates 25 new jobs" in a county with no more than 250,000 residents, and pays at least $1 million in annual payroll at the site, can apply for an exemption from all sales taxes paid to purchase equipment to operate servers, including software, cooling systems, and security and monitoring equipment.

"The law requires neither the buyer nor the seller to report the cost of exempt transactions to the state," Caruso and Huangpu add. "That means the exact cost is unknown. Still, the state estimates the lost tax revenue in budgets." In his budget proposal for the 2025–26 fiscal year, Gov. Josh Shapiro estimated $43.1 million in lost tax revenue from the program, growing to $51.1 million by the end of the decade. Former Gov. Tom Wolf predicted in his proposal for the 2022–23 fiscal year that by 2025, the program would cost nearly $75 million in lost revenue. "Jeffrey Johnson, a spokesperson for the Department of Revenue, said the original projection was reduced after lower-than-expected use in early years," Caruso and Huangpu write.

Still, it's worth remembering that Amazon—the world's second-largest company by revenue, behind only Walmart—committed to spend $20 billion on data centers in Pennsylvania alone. Clearly, the tech giant is not hurting for cash, and Pennsylvania taxpayers should not be on the hook for a potentially unlimited cash giveaway to a private company.

The post Pennsylvania Gives Amazon Potentially Unlimited Sales Tax Exemption appeared first on Reason.com.

Google has agreed to purchase electricity from a forthcoming nuclear fusion power plant, the so-called holy grail of clean energy that scientists have been chasing for more than half a century. 

While the fusion industry reached a significant milestone a few years ago, the technology has yet to prove whether it can be a technically feasible or commercially viable option. Nevertheless, the deal Google announced today shows confidence in the possibility of harnessing nuclear fusion to power its data centers.

The news follows the release of Google’s latest sustainability report on Friday, which shows its greenhouse gas emissions continuing to climb despite its clean energy commitments. Even in a best-case scenario, fusion reactors wouldn’t be online in time to help Google meet its goal of slashing emissions by 2030.

“It’s a world-changing technology in our view,” Michael Terrell, head of advanced energy at Google, said in a Friday call with reporters. “Yes, there are some serious physics and engineering challenges that we still have to work through to make it commercially viable and scalable. But that’s something that we want to be investing in now to realize that future.”

Specifically, Google has agreed to purchase 200 megawatts of “future carbon-free power” from Commonwealth Fusion Systems (CFS), a private company that is building the fusion plant in question and in which Google is also an investor. Offtake agreements like this are common for other sources of electricity as a way to fund new projects. What’s different here is that the timeline for nuclear fusion is far more uncertain.

Nuclear fusion researchers are attempting to recreate the way stars generate their own light and heat. In our sun, hydrogen nuclei fuse together, creating helium and a tremendous amount of energy. If someone can figure out how to do that in a controlled way on Earth, they would unlock a potentially limitless source of carbon pollution-free energy. 

But doing so takes extreme heat — more than 100 million degrees Celsius. With such high temperature and pressure requirements, scientists weren’t even able to achieve a net energy gain from a fusion reaction until 2022. And so far, only the Lawrence Livermore National Laboratory has been able to do this. (Today’s nuclear power plants generate electricity through fission — releasing energy by splitting atoms apart rather than fusing them together; a process that leaves behind radioactive waste.)

CFS says the technology is finally advancing fast enough to connect its first fusion power plant to the electricity grid in Virginia by the early 2030s. Virginia is also home to “data center alley,” where tech companies have built or expanded facilities to develop new AI tools. Other energy experts The Verge has spoken to over the years, however, think it could take decades longer for fusion to become commercially available. CFS is currently building its pilot plant in Massachusetts.

Google and CFS aren’t alone in their ambitions. Microsoft inked a deal in 2023 to purchase electricity from a nuclear fusion generator being developed by Helion Energy, which is supposed to be ready by 2028. Around $8 billion from primarily private investors has flowed into fusion startups in recent years, the Washington Post reported last week.

Google first announced an initial investment in CFS to support R&D back in 2021. It’s now making a second capital investment, although the companies aren’t disclosing any concrete numbers. Google has also been an investor in another fusion company, TAE Technologies, since 2015 — although the recent deal with CFS marks Google’s first offtake agreement for fusion. 

In 2021, Google pledged to reduce its planet-heating pollution by 50 percent by the end of the decade compared to a 2019 baseline. The company’s latest sustainability report, however, shows that the its carbon emissions have actually ballooned by more than 50 percent since 2019 as it doubles down on AI. 

The 200MW deal with CFS represents a fraction of Google’s carbon-free energy purchases. It says it has signed more than 170 agreements since 2010 to purchase 22,000MW of clean energy — much of that in wind and solar projects that it sees as more feasible near-term solutions.

Ford has long been rumored to be in discussions with Tesla about licensing its Full Self-Driving technology, but CEO Jim Farley has now shut down those rumors.

Farley confirmed that Ford talked with Tesla, but he believes Waymo has a better solution.