SIOUX FALLS, S.D. (KELO/AP) — Artificial intelligence is ubiquitous in the United States. The technology requires data centers to operate, and the possibility of such facilities finding a home in South Dakota is now part of the race for the governor’s office in 2026.
Republican Dusty Johnson, who is seeking to change jobs from South Dakota’s lone member of the U.S. House to its governor in Pierre, envisions data centers coming to the state and providing property and sales taxes.
Phase 2 of Minnesota Ave. project starting next spring
“This would be a huge opportunity for us to lower that tax burden on South Dakotans,” Johnson said Thursday. “But right now, we are simply not going to build any data centers in this state because our laws are not a good fit for them.”
Data centers utilize considerable quantities of power and water; some could actually demand more electricity than a community the size of New Orleans or Pittsburgh. Toby Doeden and Jon Hansen, who are also vying for the Republican nomination in South Dakota’s 2026 gubernatorial race, are clear on how they view AI.
“I think the United States should be at the forefront of AI,” Doeden said Thursday. “I think the United States should dominate the development of AI and data centers. I generally do. I have said from the beginning of my campaign that my focus is putting South Dakota first.”
“I absolutely welcome new business and innovation that brings jobs and growth to our communities and provides opportunities for our kids to find good work and stay in South Dakota, and the president is right when he says that AI is going to change the world,” Hansen said Thursday.
Johnson wants companies interested in building a data center in South Dakota to pay less in state taxes, or no state taxes, on electronic equipment. But he says a company intending to build a data center would have to prove a few things within his plan.
“They’re not going to have any negative impact on electric users: existing South Dakota electric rate payers,” Johnson said. “Number two, they’re not going to any negative impact on water users in the area. Number three, that they are going to pay substantial taxes, and then number four, they are going to create good jobs.”
But on the question of how data centers could come to South Dakota, Hansen and Doeden have similar thoughts.
“These data centers, by the way, are owned by some of the world’s richest tech billionaires,” Hansen said. “They’re coming here and they’re pushing for these massive state tax breaks, and I’m not for that.”
“We ought not be using taxpayer subsidies to fund these data centers in South Dakota on the backs of hardworking, taxpaying South Dakotans that are already struggling to pay their bills,” Doeden said.
Also running for governor of South Dakota in 2026 are Democrat Robert Arnold and independent Terry Gleason. Arnold told KELOLAND News via email Thursday that he opposes “making it easier for data centers to come to South Dakota in any way.” KELOLAND News spoke with Gleason over the phone; he says he would support Johnson’s plan for bringing data centers to South Dakota.
