By Randy Hutcheson
Every day, Birmingham residents generate enormous amounts of monetizable digital exhaust — streaming movies, using GPS, storing files in the cloud, scrolling social media, shopping online, and increasingly asking AI to do tasks for us.
That data has real monetary value.
According to the Baltimore Sun, the average commercial value of an internet user’s data is $6,563 per year — nearly $400,000 over a lifetime. Multiply that by Birmingham’s population, and residents collectively produce roughly $1.3 billion a year in digital value that flows directly to global tech companies.
Birmingham citizens already subsidize Big Tech at a rate of more than a billion dollars annually — before the city gives away a single tax break.
How much are we willing to give?
Digital Extraction Meets Tax Extraction
Colonization no longer requires armies. Today it happens when outside companies extract value from a community while the community absorbs the cost. In the digital world, extraction happens through our data. In the physical world, it happens through our tax base. And the place where those two forms meet — where our daily digital habits become someone else’s profit — is the data center.
Data centers are simply the industrial‑scale version of the same model: wealth flows upward, costs stay local, and the public pays for the infrastructure that makes the extraction possible.
Before defending the Nebius deal, let’s acknowledge its strongest points. Birmingham is playing the same incentive game as every other city. No money is paid up front. And yes, the project will generate an estimated $87 million for Birmingham City Schools, which could be transformative.
But none of that changes the structure of the deal: a 30‑year tax abatement for a foreign company with no community benefits agreement, no local hiring requirements, and no renewable‑energy commitments.
It is part of a national incentive arms race that economists say drains public revenue without changing corporate behavior. Cities compete against one another for companies that would have come anyway.
Which raises a simple question: how long can America keep competing against itself?
Alabama’s Long Pattern of Extraction
Alabama’s political dysfunction accidentally protected some of the most beautiful land in America — no Atlanta style sprawl, no wall‑to‑wall development. But the cost of that “accidental conservation” has been paid by everyday Alabamians:
- Underfunded schools
- Underpaid teachers
- Rural hospitals closing
- Crumbling infrastructure
- A billion dollars poured into prisons
- And now, 30‑year tax breaks for a company bringing 78 jobs
Auburn historian Wayne Flynt documented this pattern clearly: Alabama has spent generations serving as an extraction zone for other people’s prosperity. Wealthy outside interests hollow out the state’s resources, leaving ordinary Alabamians to shoulder the burden of weak schools, low wages, and fragile public institutions.
The Nebius deal fits the pattern perfectly.
The Numbers Don’t Lie
The Industrial Development Board approved:
- 65% off non‑education property taxes
- 80% off non‑education sales taxes
- For up to 30 years
Thirty years. A generation of foregone revenue. A potential $3.2 billion incentive over three decades.
And what does Birmingham get? Seventy‑eight jobs. Not 7,800. Not 780. Seventy‑eight.
Europe Would Never Allow This
Here’s the part that should stop everyone cold: Europe doesn’t do this. EU state‑aid rules prohibit long‑term, company‑specific tax abatements, especially for foreign firms. Amsterdam couldn’t give Nebius a 30‑year tax break even if it wanted to. Helsinki didn’t give Nebius a tax break.
Yet Birmingham — a city with half the per‑capita income — is being asked to do exactly that.
The Irony: “Grow Birmingham from Within”
Birmingham is working hard to grow companies from within. Yet the largest incentive package in the city’s history went to a foreign‑owned company with no local supply chain and no multiplier effect.
Meanwhile, Birmingham‑born companies get modest incentives, strict job requirements, and far less public attention.
Common sense says this is backwards.
The Real Ledger of Colonization
If decades of corporate giveaways were supposed to strengthen Alabama’s economy, then why can’t an average family afford to send a child to Auburn anymore?
In 1990, state appropriations covered about 70% of Auburn’s operating budget. Today, it’s roughly 21%. When you give away and reallocate the tax base, someone has to make up the difference — and that someone is the Alabama family trying to send a kid to college.
Public money flows upward. Public costs flow downward.
A Closing for Alabama
I left Alabama decades ago. Not because I stopped loving Birmingham — I never have — but because the politics felt repressive, the decisions felt small, and the people in charge seemed more committed to preserving power than building a future.
Scripture tells us: “Where your treasure is, there your heart will be also.” If Birmingham’s treasure keeps flowing to outside corporations, then our future will follow it right out of town.
And: “A worker is worthy of his wages.” Yet the people who teach, heal, build, and raise families here pay full price while multinational companies get a discount.
We can choose differently. We can invest in our own people. We can grow our own industries. We can plant seeds that grow from our own soil.
The Nebius deal — clawback and all — is not that seed.
That’s not radical. That’s not socialism. That’s not partisan. That’s just common sense.
Randy Hutcheson is a Birmingham metro native, Auburn graduate, and former municipal urban design manager. He is a founding member of a community‑based nonprofit focused on equitable development and community engagement, and he currently owns and operates an urban design firm in Texas. His work centers on how government policy and law shape — and too often limit — the ability of everyday people to build wealth, power, and stability in our communities.
David Sher is the founder and publisher of ComebackTown. He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).
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Invite David to speak for free to your group about how we can have a more prosperous metro Birmingham. dsher@comebacktown.com
Randy: Thank you for taking the time to share your brilliant analysis. I hope that Comeback Town readers, AL.com readers–all readers–will take their time to carefully consider your points.
Alabama–particularly Birmingham–has been treated like a third world stepchild colony for so long, that we don’t even recognize this fact any longer. Instead, we pat ourselves on the back for negligible gains. We accept this as our lot in life. 78 jobs for a 30-year abatement from most taxes? What a shame. And this doesn’t even address the quality-of-life issues that data centers bring to our environment.
As I read your writing, I cannot help but think that we continue to give-a-way the store without commensurate gain. This is not dissimilar to our luddite approach to refusing to adopt a lottery to support public education–unlike 45 of our fifty sister states. We keep our heads buried in the sand hoping that…what? The definition of insanity is continuing to do the same things and expecting different results.
Until voters change the political leadership in this state–currently controlled by the Republican Conservative leadership taking its marching orders from the Nebius’s of this world–our insanity will prevail.
Maury: Thank you for taking the time to read the piece and for sharing such a thoughtful response. I appreciate your engagement with the issues and your willingness to look closely at the broader patterns affecting Birmingham. Your perspective adds real value to the conversation
Well said, Randy. Knowing these companies locate in wealthier and more expensive places without and incentives is a kick in the gut.
Yes, the cost for the internet’s existence and our access to it is covered by our “internet user’s value”, which is why each of us doesn’t have to write a $6,563 check to cover the cost for it every year.
We pay no money to access our medical records, manage our banking, use GPS, benefit from smart traffic lights, search the internet, order goods, access our home thermostats remotely, use AI for a growing number of tasks, access our libraries, stream televised content, etc. Amazingly, the internet is free of charge to us! Most everyone sees this as a great deal — which is why the internet is flourishing.
At present, we in Bham are fortunate that other communities host the data centers that we use. It seems to me that we’ve been freeloading in a sense.
I also note that none of those who complain about data centers are themselves digital hermits, which strikes me as being hypocritical. Comeback Town wouldn’t exist without evil datacenters that are hosted elsewhere. Cloud compute plays a key role in UAB’s very important research.
SpaceX is our only hope around our present terrestrial datacenter arrangement, and I am skeptical about their ability to host data centers in space anytime in the near future. Until that happens, we’re left with data centers being scattered across the country, and in truth don’t we all prefer that to the alternative?
I won’t address where the EU’s policies have it headed in the world economy, etc. (though I do think the EU is starting to smell the coffee).
Steve,
I appreciate your perspective, but the economics work very differently than you’re describing. The reason we don’t pay a fee to access our medical records, banking, GPS, streaming, or AI tools is not because the internet is free — it’s because the companies operating these systems are already monetizing our data. That’s the business model. Our search history, location data, purchasing behavior, preferences, and digital exhaust are the revenue stream that pays for the infrastructure. In other words, we already pay — just not in dollars. We pay in data.
A simple example:
When you use Google Maps for “free,” Google collects your location, your route, your speed, the places you visit, the stores you linger in, and even the times of day you travel. That data is then sold, analyzed, and fed into advertising, retail site‑selection models, insurance risk scoring, and countless other commercial uses. The service feels free because the cost is hidden — but it’s not free. We are the product.
And that’s exactly why the incentive question matters. If Birmingham gives a 30‑year tax abatement to a foreign company for a data center, we’re effectively paying twice: once through the value extracted from our data, and again through the public revenue we forfeit. That’s not freeloading — that’s subsidizing an industry that is already extracting enormous value from us.
None of this has anything to do with whether people use the internet. Of course we all do. That’s not hypocrisy; that’s modern life. The question isn’t whether data centers should exist — they’re essential. The question is whether this particular deal produces a public return that justifies the public investment. Wealthier cities are getting these same facilities without incentives. That’s the point I’m raising.
I agree with you that cloud compute is indispensable and that UAB’s research depends on it. But necessity doesn’t automatically make every incentive package a good one. The issue is governance, not gratitude. The public is already paying for the internet through the value of its data. The question is whether Birmingham should also pay for it through its tax base
Thanks, Randy. My apology for the delay in getting back with you.
My point is that we in Alabama aren’t subsidizing anything relating to the internet; if anything, it is we who are being subsidized. Nor are we “paying twice” when we aren’t actually “paying” anything. There are no cash grants, upfront payments, or taxpayer obligations relating to the data center. Instead, Nebius pays reduced taxes if—and only if—it builds and invests as promised. That is tax money we wouldn’t have received otherwise.
You mentioned the value of our monetized data. The $6,563 national average comes from those wishing to sell us stuff. Alabama, being among the poorest states, has citizens whose per capita income is well below the national average, and therefore the contribution of our monetized digital data to the fixed cost of providing internet access is less than average.
Alabama also has fewer data centers per capita than most other states despite our being a rural state with a solid energy supply. One could say that our compute is being “subsidized” by those states (like your home state of Texas, thank you!) that host more than their “fair share” of data compute. But they aren’t doing this for altruistic reasons…more on that later.
I point all of that out due to the NIMBYism and anti-big tech that is inherent (whether openly acknowledged or not) in most every discussion opposing a data center.
You say that we didn’t have to offer incentives to attract a data center, but how do you know this? And how do you know what the past financial and logistical factors were behind the decision to locate earlier data centers elsewhere? As I understand it, there was a time when there was little competition for data centers, but that has changed due to the economic benefit that having these centers has proven to be. I know Tennessee and Chattanooga offer incentives, as it appears that Ohio does, and your home state of Texas aggressively competes for data centers using incentives like the one Bham did with Nebius.
Given the assumed current competitive environment, I doubt that Nebius would disregard incentives offered elsewhere and choose a location without them. And surely our local leaders negotiating with Nebius aren’t so completely inept as to offer incentives were none needed, but I’ll admit that is a possibility. And I can understand suspicion that graft might be involved, given Birmingham’s history. I’m hoping not, though.
If Nebius builds all that it is projecting to, then this is clearly a big financial win for Bham; and if Nebius doesn’t perform and generate sufficient revenues, then we have some clawback protection. I’m not sure what other purpose would be a better use of the Regions property – it wasn’t selling and mostly sitting empty, losing value and not generating any tax revenue to speak of.
The more legitimate concern in my book is whether the additional revenues will be well-spent on the most productive causes and not sending administrators on professional improvement junkets, private boxes at football games for public officials, and such.
Based on the information that I have seen, and not seeing compelling reasons otherwise, I support our local official’s decision to compete against other municipalities for this data center.