Trump-backed tax break a windfall for controversial industry — now GOP senator wants 'corporate welfare' cut
Sen. Hawley proposes bill to strip data‑center operators of Opportunity Zone tax breaks
Washington, D.C. – Sen. Josh Hawley (R‑Mo.) announced plans to introduce legislation that would bar data‑center companies from using the Opportunity Zone tax incentive program, a move he says will curb what he describes as “corporate welfare” and slow the rapid expansion of the industry that underpins artificial‑intelligence (AI) workloads.
Hawley told Fox News Digital that the tax loophole was created in the 2017 Tax Cuts and Jobs Act, a package approved under former President Donald Trump that granted tax breaks to spur investment in low‑income or underserved areas. “Opportunity Zones are meant for low‑income areas, low‑income housing, low‑income businesses or businesses in low‑income areas,” Hawley said. “These data centers have figured out a way that they think that they can access all of this money.”
The bill would explicitly exclude data‑center operators from the tax‑break program, adding a federal barrier to a practice that has already become a key source of financing for tech giants such as Amazon, Google, Microsoft, and Facebook. According to a National Community Reinvestment Coalition report, roughly 14 % of all data‑center sites in the United States are located in Opportunity Zones, and about 17 % of all projects that have been permitted, approved, or are under construction are in those zones.
Since the tax provision was introduced, the U.S. has designated 8,746 Opportunity Zones nationwide, with just under half of them in rural areas – locations that are often attractive to data‑center developers for their low land and utility costs. Hawley argues that the incentive program, which was made permanent last year through the so‑called “big, beautiful bill,” has been repurposed in a way that benefits wealthy companies without providing benefits to the communities that were originally intended to receive them.
“I’m pretty skeptical of that,” Hawley said. “They want an antitrust exemption so they can all talk together and work together. Any regulations, they want to write them themselves.”
The senator also cited concerns about unregulated AI development as a reason to act on the data‑center issue. “Congress needs to at least put guardrails on AI and give people the opportunity to sue tech companies if their data and personal information has been used without their consent,” Hawley said.
Hawley’s remarks come amid a broader debate in Washington over the regulation of AI and the infrastructure that powers it. Three years ago, Senate Minority Leader Chuck Schumer (D‑N.Y.) convened panels with tech CEOs—including Elon Musk, Meta’s Mark Zuckerberg, and others—to discuss potential AI legislation. Hawley criticized the outcome, suggesting that “all the tech CEOs then promptly gave Schumer and the Democrats gobs and gobs of money, and they decided that, you know what, maybe this industry is going fine.”
He added that the industry now seeks an antitrust exemption that would allow the big tech firms to “write the regulations and figure out what we’re going to do” themselves, a stance he finds questionable.
The bill would be a new federal effort to curb data‑center growth that has surged as AI and cloud computing demands increase. If enacted, the measure would require companies to seek alternative financing or operate outside of Opportunity Zones to benefit from the tax incentives.
The proposal is part of a growing legislative and public push to address the environmental, economic, and social impacts of the rapidly expanding data‑center sector, which consumes large amounts of energy and water. As the debate continues, lawmakers and industry leaders will weigh the benefits of tax incentives against the perceived inequities and regulatory gaps in the current framework.