Over the past decade, Arizona has become one of the nation’s premier technology hubs. Lawmakers from both parties laid the foundation by passing policies that attracted billions of dollars in data center investment and the digital infrastructure those facilities house.

As Arizona looks ahead, it has an opportunity to keep embracing the industry that has helped make its economy one of the fastest-growing in the United States. But first, it must agree on how to proceed.

Gov. Katie Hobbs enacted a three-year pause on sales tax exemptions for new data centers in the FY2027 state budget she signed in June. Attorney General Kris Mayes went further two months later, calling for a statewide moratorium on new development altogether.

Data center development must be more responsive to community concerns, but the conversation also should consider the industry’s economic footprint and the essential role this infrastructure plays in everyday life.

Bring up data centers now, and most people think of artificial intelligence. But data centers have powered our lives for decades, long before ChatGPT existed. Every time someone sends a photo, streams a show or accesses a bank account online, data is being stored, processed and transmitted through data centers. The same infrastructure supports services ranging from telehealth to government records and other information critical to daily life.

That digital economy also has created jobs and generated tax revenue in Arizona. From July 2025 through June 2026 alone, Arizona attracted more than $109 billion in investment. Those commitments extend past the buildings themselves. Meta, for example, has made large investments in workforce training and helped cover costs for Arizonans pursuing higher education, strengthening the talent pool available to employers statewide.

That pipeline feeds a workforce that keeps expanding. Since Arizona enacted its data center tax incentive in 2013, the sector has grown to support more than 20,000 direct jobs and nearly 88,000 total positions across the state. Every data center job supports six additional jobs in Arizona’s construction and engineering sectors, local services, and trades. All told, the industry delivered more than $1 billion in state and local taxes in 2024.

Stifling development would hand those gains to states like Virginia and Georgia that are racing to scale their own AI economies. It also would mean surrendering a hotbed of technological innovation at the exact moment the country is competing with China to set the pace on AI.

None of this makes it unreasonable to question data centers. Communities and elected officials are right to want clear answers on matters like energy efficiency, water consumption and environmental impact. Often, those answers are more reassuring than expected.

Consider concerns about water consumption, a particularly important topic for Arizona amid ongoing pressures on the Colorado River as a source. In recent years, the data center industry has invested substantially in water-efficient technology, including closed-loop cooling systems that sharply reduce on-site use. As a result, today’s data centers use far less water than one might imagine. In 2025, data center water consumption accounted for just one-tenth of 1% of Arizona’s annual use.

But this kind of progress happens only in a working industry, one where developers, local governments, and communities keep refining standards while new investment continues to arrive. Rather than imposing a blanket moratorium, communities should evaluate proposed data centers individually, promoting development that meets standards on water use, energy efficiency and commitments to sustainable management.

Arizonans’ questions are reasonable. As lawmakers consider what comes next, they must weigh short-term concerns against the long-term cost of grinding development to a halt: fewer jobs, less innovation and narrower economic opportunity.

Arizona built something rare over the past decade. The task now is to keep improving it, not to walk away from it.

Steven Zylstra, is the president and CEO of the Arizona Technology Council.