Microsoft is working to roll back a host of tax incentives it obtained for three Metro Atlanta data center projects, months after the company vowed to pay its own way for its build-outs.

The tech giant is working with Fulton and Douglas counties to “unwind the local tax incentive agreements” for data center projects in East Point, Palmetto and Douglasville, a Microsoft spokesperson confirmed to The Atlanta Journal-Constitution.

The development authorities of Fulton — the county seat for the city of Atlanta — and Douglas counties approved the property tax break incentives in recent years. Develop Fulton told the AJC it is coordinating with Microsoft on unwinding the existing transactions.

It wasn't immediately clear how those incentives would be rolled back.

The move comes as Microsoft attempts to stave off mounting criticism from local governments, residents and other tech companies as it expands its data center footprint across the country.

Data center inventory in the U.S. grew 11% in the second quarter, compared to the same period in 2025, and 80% year-over-year, according to an Avison Young report. While new supply deluged the market, demand, driven in large part by the boom in artificial intelligence, outpaced new supply. The national vacancy rate fell below 1% for the first time last quarter as occupancy growth was 20 times faster than five years ago, according to Avison Young.

At least 38 states offer a variety of data center incentive programs, from rebates to sales and use tax exemptions, according to Thomson Reuters.

But national pushback has spurred states like Maine, Nebraska and Washington to rescind some incentives, according to Thomson Reuters.

In July, New York became the first state to issue a yearlong moratorium on data center construction as state officials develop new standards for future projects.

The Fulton County Board of Commissioners — which is home to two of the Microsoft data center projects subject to a tax incentive — this week approved a nonbinding resolution to oppose development authorities from issuing further tax breaks and financial incentives for data centers, the Atlanta Business Chronicle reported. 

Republican Commissioner Bridget Thorne, who introduced the resolution, said property tax breaks shift revenue away from public safety, infrastructure and other services and shift more of the tax burden onto existing businesses. 

"Fulton County taxpayers shouldn't be subsidizing some of the wealthiest companies in the world that are building these data centers," Thorne said, according to the ABC.