A Fulton County agency approved Tuesday a $10.1 million tax break for a controversial data center expansion by the social media platform X that was already underway.
A month after deadlocking on the request, the Development Authority of Fulton County (DAFC) board voted 6-2 to approve the tax savings for the platform formerly known as Twitter.
The company, which is owned by the world’s richest man, Tesla CEO Elon Musk, will have its tax bill reduced for the next decade as it houses computer servers for artificial intelligence work at the Qualified Technology Services data center off Jefferson Street. The project will not create any new jobs, but it will retain 24 existing employees — at a cost of more than $420,000 per job.
X representatives pitted Atlanta against Portland, Oregon, threatening to move some of its AI equipment to a data center out West if Fulton rejected the tax break.
Nine Fulton residents expressed opposition to the project, citing financial concerns and worries about partnering with a platform accused of proliferating hate speech.
“Gifting public money to a purveyor of hate speech is not simply wasting money as many of these deals tend to do,” said Jim Martin, chairman of Neighborhood Planning Unit D. “It also sends a message to the world that Atlanta is no longer a city too busy to hate.”
X’s investment is estimated at $700 million, but most of that equipment is already in Fulton. Dhruv Batura, the X project lead, said all but $200 million of equipment has already been shipped to the data center, but he said the company would move the remaining equipment to Portland if the incentives fell through.
“We’re going to free up space in Oregon because the cost of operating in Atlanta without the abatement is about 21% more,” Batura said. With the inducement, he said it would fall in line “to the cent” with Oregon, which has already provided tax breaks.
DAFC, also known as Develop Fulton, has faced intense scrutiny in recent years for granting incentives that critics contend are not needed. The board has also gotten heat for incentivizing data centers, one of the hottest uses for industrial real estate in Georgia, which can earn lucrative state incentives.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
Board member Mike Looney argued that attracting cutting-edge technology to Atlanta will pay off long-term.
“This region is becoming a technology corridor,” he said. “So I think having another major player, such as X, in the marketplace will create a ripple effect for the broader economy.”
Since Musk bought the platform in 2022, X has gone through a stark cost-cutting campaign, shedding workers and even shutting down two other data centers. Through its startup called X.AI, the company is quickly raising hundreds of millions of investor dollars to break into the AI sector and compete with OpenAI’s ChatGPT.
But the fight over the emerging technology has become contentious, with Musk contending competitors are politically biased. Musk also sparked an advertiser boycott against X by endorsing an antisemitic post on the website, and fired off a profane November rant saying the exodus could kill the company.
DAFC estimates the X project will generate more than $16 million in new taxes for Fulton over the next decade despite the incentive. DAFC Treasurer Mike Bodker said the AI investment has the potential to generate tax revenues beyond the 10-year abatement period.
“I feel like AI is not going anywhere. I feel like if that equipment gets clustered here in Atlanta ... what tends to happen is it gets refreshed,” he said, referencing the routine replacement of outdated equipment, which would then be taxed in perpetuity.
Before the vote, the DAFC tacked on an amendment to reach an agreement with X for potential educational partnerships, such as an internship program, before implementing the tax break. DAFC Secretary Kyle Lamont said X’s controversies raise doubts about the company’s viability and ability to deliver upon any community commitments.
“I don’t think it’s sustainable as an investment,” he said. “We can’t just take a corporation for face value that has not prioritized this before now.”
The board is temporarily short a member after its chairman, Marty Turpeau, died in December following a brief illness. He was the fourth “no” vote that tied the X request last month.
Lamont was joined by Erica Long in voting against the deal. Laura Kurlander-Nagel switched to support the project because of the community partnership amendment.
The next step for X’s tax break is clouded by challenges to the entire incentive process. Since early December, the Fulton County Board of Assessors has declined to approve development authority appraisal requests after being accused by an Atlanta attorney of acting as a “rubber-stamp” for the deals to the detriment of other taxpayers.
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