Lombardo’s big sloppy crush on data centers finally attracts Ford’s attention

When he was a state senator, Ford was one of the primary sponsors of the 2015 legislation that created state tax breaks specifically for data centers in the first place. The legislation passed unanimously; in 2015, Anthropic and Open AI weren’t household words. 

In fiscal years 2021 and 2022, the state’s tax breaks to data centers totaled $97 million, according to the state Department of Taxation’s appropriately named Tax Expenditure Report.

The size of the state’s giveaway to data centers had well more than doubled to nearly $240 million in fiscal years 2023-24, the most recent period reported.

By the time the FY 25-26 report is released (no later than Nov. 10 of this year under state statute), the cost of data center tax breaks may have more than doubled again. Or more than tripled.

For decades, state officials of both parties have justified those tax breaks,  like all economic development “incentives” provided to Tesla, the NFL,  MrBeast, etc., by contending without the tax breaks the business activity wouldn’t come to Nevada.

Neither Nevada nor any other state can prove that contention, and in fact evidence abounds that government giveaways make little to no difference at all in companies’ location and relocation decisions. Given the hundreds of billions of dollars the AI/data center industrial complex is spending on data centers and its assertsion that the world simply must create as many data centers as it can as quickly as possible, it’s ludicrous to assume the decision to build a data center in Nevada hinges on tax breaks. The hundreds of millions in tax revenue the state has spent on data centers matters of a lot more to the people and perennially underfunded public services of Nevada than it does to Google, Microsoft, and Apple.

Ford, like the vast majority of Nevada politicians in both parties, has long been a champion of government assistance to private industries in the name of economic development. Last year both Ford and Lombardo backed giving public subsidies to California film corporations, including one now owned by the Trump-worshiping billionaires Larry and David Ellison, whose Oracle firm has been a substantial player in the AI-driven data center infestation.

While that massive expansion of the film tax credit, which would have been the largest public subsidy of private industry in the state’s history, did not pass, Nevada still has an older and smaller program that gives tax breaks to the film and video industries. 

That program was spearheaded by Ford in 2013.

Ford’s opponent in this year’s the Democratic primary, Alexis Hill, campaigned against government giveaways generally and data centers specifically. But Hill was overwhelmingly outspent by Ford, and her campaign didn’t get traction.

Now Ford is being overwhelmingly outspent by Lombardo.

As of the last campaign finance filing, Benjamin Horowitz, who along with his tech venture capital partner Mark Andreesen has contributed at least $75 million to the nation’s largest AI industry political action committee, has also contributed at least $1 million to the main PAC supporting Lombardo.

Lombardo is also among the most enthusiastic data center apologists with their name on a U.S. ballot this year.

In a not unrelated note, Lombardo spent most of his first month as governor in 2023 publicly bowing and scraping before the global poster child of publicly abhorred tech bros, Elon Musk. And over the last year or so Lombardo has found himself rationalizing, explaining away, and defending the atrocious working conditions in scofflaw Musk’s preposterous Las Vegas tunnels.

Public fear and loathing of AI and its data centers has only intensified over the summer.

Lombardo’s wildly unpopular stance as a data center cheerleader presents Ford with an opportunity to sharply distinguish himself on what has emerged as one of the most high-profile public policy issues in Nevada and the nation. 

So far, Ford has failed to grasp that opportunity, instead allowing his campaign to slip into the usual stuff of Nevada gubernatorial campaigns: largely policy-free tit-for-tat sniping between the contenders over campaign-generated micro-scandals

Ford’s reference Friday to “Lombardo’s taxpayer-funded data centers” signals his position on data centers may be evolving.

To which a lot of Nevadans would say: It’s about time.

Portions of this column were first published in the Daily Current newsletter, which is free and which you can subscribe to here.