How Big Tech companies use shell corporations to get massive tax breaks from US cities for data centers that create few jobs and consume a lot of power
Local governments are dangling hundreds of millions of dollars in tax breaks to persuade companies like Facebook, Google and Microsoft to build server farms in their backyards. Tweets: @forbes , @helenaspopkin , @forbes , @forbes , @davidjeans2 , @davidjeans2 , and @davidjeans2 . Thanks: @helenaspopkin Tweets: @forbes : In an effort to outdo one-another, it's now standard practice for U.S. cities and towns to bow to demands from the big tech companies to keep their identities hidden until they've secured tax incentives. Read more about deals like Facebook's in Georgia: https://www.forbes.com/... https://twitter.com/... Oh Helen A.S. Popkin / @helenaspopkin : Google, Facebook & Microsoft use shell corps to get massive tax breaks for data centers that create few jobs, consume massive power & force local govs to sign NDAs - some don't know they're dealing with the world's most profitable companies Tips @Techmeme https://www.forbes.com/... @forbes : Local governments are dangling hundreds of millions in tax breaks to persuade companies to build server farms in their backyards. But the deals are shrouded in secrecy and coming under question due to cost. Read more: https://www.forbes.com/... https://twitter.com/... @forbes : Companies like Facebook, Apple, Amazon, and Microsoft often push for secrecy with data center projects, delaying opposition from locals concerned about their environmental impact until after the project — and its tax breaks — have been secured. Read more: https://www.forbes.com/... https://twitter.com/... David Jeans / @davidjeans2 : The size of the tax breaks are rarely justified: @Forbes reviewed 15 data center projects launched since 2015 that were anonymous when they received a combined $811 million in tax incentives, or almost $1 million for every permanent job created. https://twitter.com/... David Jeans / @davidjeans2 : In Columbus, council members were unaware of the true identity of a company called Magellan Enterprises LLC when it asked for a $54M tax break for a data center that would create 20 jobs. Several had concerns. https://twitter.com/... David Jeans / @davidjeans2 : Companies like Google and Facebook are forcing local governments to sign NDAs as they seek massive tax breaks for data centers that create few jobs. Sometimes local officials don't even know which company they are awarding the tax breaks to. https://www.forbes.com/... Thanks: @helenaspopkin
Context & Ripple Effects
This Forbes investigation is the sharpest installment in a secrecy arc that has been building for years: back in 2018, tech companies hunting for real estate were already asking local officials to sign NDAs that kept economic and environmental risks hidden from the public. What Forbes adds is the corporate-structure layer — Google, Facebook and Microsoft negotiating through shell entities, with 15 projects awarded a combined $811M in incentives while anonymous, including a Magellan Enterprises request for a $54M Columbus tax break on a data center creating roughly 20 jobs that council members couldn't identify.
First-order effects
- Local governments like Columbus are voting on nine-figure incentives without knowing the counterparty, while residents of host towns like Facebook's Georgia site bear the power and infrastructure costs of server farms that create few permanent jobs.
Second-order effects
- Cities and towns are now bidding against each other with secrecy as standard practice — Forbes reports hiding identities until incentives are secured has become the norm — which pressures every municipality into worse terms to stay competitive for Big Tech siting decisions.
Third-order effects
- The pattern is already triggering a counter-movement: backlash laws in Arizona, Georgia and other states now restrain the energy-intensive industry, and a later analysis of 30+ proposals across 14 states found NDAs and shell companies still dominant — pointing toward incentive reform and disclosure mandates as the structural fix.
The trend: Data center siting is shifting from secret, shell-mediated tax-incentive auctions toward publicly scrutinized, legislatively restrained deals as the backlash against low-job, high-power projects hardens into law.