Increased demand drives up prices under a fixed supply regime. Power is, in many places of the US, something approaching a fixed supply regime. This is not a physical requirement of the universe. It is a policy choice that we have made. I would argue that it is not the data centers driving up power prices, it is our policies around how difficult it is to provision new power (or build almost anything at all) in the US.
Congress could fix this problem tomorrow. And in fact there is a bipartisan bill (BAAJA) that would go a long ways (although not all the way) towards fixing it. Now yes even if we fix these policies there would be a time lag on new generation being connected, but there is no reason to leave this problem in place.
Thank you for doing the work of keeping in the know on this sort of topic and notifying us all of the bill. I'll check it out and send a letter to my congressmen if it checks out.
I struggle to understand why data centers are seen as a problem rather than an opportunity. Cities and counties can charge a high property tax to data centers and the residents can benefit. They might even give residents a dividend from the data center property tax. What's wrong with that plan?
The article discussed this... data centers don't pay for the infrastructure upgrades they need to operate - the majority of that cost gets foisted on the public. They also drive up the wholesale cost of electricity, which means we all pay more for it.
Both are solvable with politicians who can be held accountable. But, in many locations, they aren't accountable and can only be trusted to do what's in the interest of their largest donors.
That's all ignoring the various other externalities... aesthetics, noise, pollution.
But, 100%, if a county/town has an underutilized industrial zone, they should build data centers there. But, it also appears data center developers prefer undeveloped plots. Again, also solvable, but somebody needs to do so.
USA appears to have weird inversion from how things could be done, so obvious logical benefits of building datacenters are flipped into negatives - through tax breaks, incoherent infrastructure spending (industrial clients should be effectively subsidizing the infrastructure!) on top of electrical grid that might benefit from being taken behind the barn.
Once you get rid of "USA is a specially broken place", you're truly left only with noise pollution, which is workable to deal with and its costs can in fact be taken by developer. Hell, existing industrial zones or ex-factory land is normally preferred elsewhere.
> USA appears to have weird inversion from how things could be done
The US has a corruption problem, which is not exceptional - I don't know what place you're comparing the US to that doesn't give the rich money and the right of way where and when they want.
People say it's a "race to the bottom" without realizing what that implies. It implies that data centers will simply get deals in localities that will not benefit from data centers if other places demand that they at least pay for themselves. Why would that happen? It happens because it will personally benefit the people who have been charged with making the decision.
> Once you get rid of "USA is a specially broken place"
Again, compared to who? You think they'll have an easier time in Europe? You think if they want to build them in Peru that the residents will benefit?
Any municipality that tries to do this will not get a DC built, and the one next door will promise a 3 year tax abatement or other special privileges to get it instead. It's a race to the bottom thing.
You need a coordinated policy to encourage everyone to tax them extra, or to require them to put down money for new electrical infrastructure or so on before they break ground. It would be good to have federal action on that.
Why wouldn’t they search for communities that would charge them the least?
And in doing so, we have messed up incentives on both sides of the aisle.
Edge compute should be a federal build out IMO. It is considered a matter of national security, right? I could be wrong, so I'm open to discussion.
We build data centers everywhere of all sizes and shapes, they’re part of US Dept of Energy. Companies and individuals can operate them, plug into them like self-storage unit business model.
It might open up a lot of opportunities to have that level of localized edge compute, and historically our computing requirements have only ever grown. Give as many people (and communities) a stake into the future of computing!
Yes it's a huge job creation/economics boon as well. The data centers are injecting a lot of money into local economies (many of which have been shrinking) and providing skilled jobs.
The actual issue is that they don't. A 100 MW steel mill might employ ~1000 people and contribute ~$1 billion/year to the economy. A 100 MW data center doesn't need that many people even during construction, and its economic contributions are attributed to the location of corporate offices. As far as local people are concerned, any other use for the electricity would be more valuable than a remotely owned data center.
>Yes it's a huge job creation/economics boon as well
Is it though? Maybe the construction itself but after that running a data center doesn't need that many on-premise people, like it can be in the two digit range which is not a lot at all. And even then on-premise people won't be the highest paid engineer jobs but rather security and technicians.
It is actually terrible at job creation. Data centers don't create many jobs at all, and you could argue through second and third order effects that they are job destroyers.
Data centers simply don't require very many people to operate.
tax breaks on top of subsidized infrastructure as the utility companies now invest more in infrastructure and raise the prices for all preexisting clients to pay for it.
Actually, yes, I do. That would be very convenient. Then again, I'm a city dweller. My grocery store is one block over, I literally just walk there with a fold-up wagon.
Yes, absolutely. What do local residents get out of the data centers?
I remember earlier this year somebody posted the results of a large survey that concluded most people would rather have a nuclear power plant in their backyard than a data center. Of course everybody would rather have nuclear power plant in their backyard because then they get cheap, clean, reliable electricity. They get nothing from the data center except competition for basic utilities.
I also remember how the person couldn't believe the results and found them astonishing. WTF. This just reinforced for me how so many people in technology are either narcissistic, short sighted (exceptionally naive), or have some sort of qualified mental health defect.
>Yes, absolutely. What do local residents get out of the data centers?
Jobs in places where there usually aren't any. Some of these places are nearly dead or dying towns/communities and they're getting a huge jolt of new economic activity. Once the data centers are built there will be a steady base of new workers/jobs to maintain them.
How many long term jobs for locals do they create after construction? My experience with similar booms in fracking is that you get a lot of out of town workers and some local jobs catering to them for 2-3 years and then it's pretty quiet and the money slows to a trickle once they've built up infrastructure.
DCs need some guards, some highly trained technicians, and that's mostly it, right? maybe 20-30 jobs per? That's not exactly opening up a new major employer like a factory or steel mill.
If you're facing local protests, my suggestion is offer to fund their schools for 5 years with a bond or something like that. Put the company name on a new power plant. It won't take up most of the cost of building and it'll probably get town hall to approve the zoning for you.
> Jobs in places where there usually aren't any ... a huge jolt of new economic activity.
This is the incorrect analysis because it is not what is happening. If you can understand this, you can start to understand the resistance. Data centers are a tangible proxy to Ai and the Oligarchy. They look like the globalization, financialization, and deregulation that wrecked the economies they had prior - on steroids.
How many jobs vs how much does the price of power go up? And are they good paying jobs or are they the equivalent of being a 3PL order packer but for swapping drives?
What they get out of not having the nuclear power plant is not getting unexplained cancer in 10 or 20 years.
You can tell them as much as you want how safe nuclear power is. You may even be right. But after Fukushima, and Three Mile Island, and Chernobyl, they don't believe you that it will reliably stay safe forever.
There's a reason lots of data centers are built around airports (already noisy) or in places that can't support other types of development for some reason.
Many local governments have failed in their responsibility to constituents in approving placement of DCs that should or could have better local projects like housing or retail.
Datacenters are getting sweetheart tax deals, and likely will pay way less in taxes than the people do because in the great US of A corporations can simply not pay taxes.
Do you have another argument that doesn't rely on trickle-down economics?
Yes, the whole point of giving them a reduction in future taxes is to encourage development in otherwise undesirable land.
You would never build residential development at the threshold of an airport for obvious reasons. So the remaining options are either leave the land undeveloped and get nothing, or build something that doesn't need quiet to generate tax revenue.
I'm not advocating for or against specific tax agreements because that is between the company and local government, who represent the people.
The trouble w/ nuclear power plants isn't that the public hates them, it's that the bond market hates them. Even the sticker price is a little bit too expensive but it usually seems to take several times more money and time to build one than anticipated.
Wind is a thing, batteries are a thing, hydro is a thing...
Maybe all that's still not going to cover you in all cases, but...I'm not anti-nuclear by any means, but my understanding is that the upfront costs are very high and take a long time to recoup even in the best of cases. If it's only used as a backup for when cheaper renewable energy can't be generated or bought I'm not sure if the economics will ever work out anymore.
... People don't pay directly for either nuclear power plants or datacenters. The closest they come to affecting this is by passing and enforcing zoning regulations.
In any case, most of us would rather have one beating than six, but that doesn't mean we want one beating.
Unfortunately, american idiocies in building datacenters are exported world wide as "memes" resulting in people thinking it's truth about datacenters, instead of being truth about broken politics and tax policies of USA
Here's an interesting coincidence. During 2010-2023, data centers growth was all in crypto farms, a truly ridiculous massive waste of energy. However, that growth played against the West. It diverted capital into ruinous tulip bubbles. It created an alternative to the Western-led financial system and trivialized bypassing sanctions. Yet it got fairly little mainstream coverage.
Now there's a tech race. Data centers are a necessary evil for the West to win it. And suddenly they're getting massive negative coverage. Just today I saw articles about both the far left and far right prioritizing the issue.
At first blush I'd say the difference in data center growth is significant between the two events, plus there's a much more massive capital inflow to AI datacenters, plus crypto has obvious other things to rail against before you get to noise and water impact.
I'd want to see a lot more evidence for an actual conspiracy than this.
The fact that made up issues like water use or waste heat, complete with faked research papers, are being used to push the issue? It does make one suspicious.
There is a lot of the broader anti-AI sentiment, so it's possible that the entire thing is just "people want to hear AI bad, so there's market in saying AI bad" - with media and politicians both recognizing the opportunity. But it wouldn't surprise me at all if some of it turned out to be coordinated influence campaigns.
Congress could fix this problem tomorrow. And in fact there is a bipartisan bill (BAAJA) that would go a long ways (although not all the way) towards fixing it. Now yes even if we fix these policies there would be a time lag on new generation being connected, but there is no reason to leave this problem in place.
Both are solvable with politicians who can be held accountable. But, in many locations, they aren't accountable and can only be trusted to do what's in the interest of their largest donors.
That's all ignoring the various other externalities... aesthetics, noise, pollution.
But, 100%, if a county/town has an underutilized industrial zone, they should build data centers there. But, it also appears data center developers prefer undeveloped plots. Again, also solvable, but somebody needs to do so.
Once you get rid of "USA is a specially broken place", you're truly left only with noise pollution, which is workable to deal with and its costs can in fact be taken by developer. Hell, existing industrial zones or ex-factory land is normally preferred elsewhere.
The US has a corruption problem, which is not exceptional - I don't know what place you're comparing the US to that doesn't give the rich money and the right of way where and when they want.
People say it's a "race to the bottom" without realizing what that implies. It implies that data centers will simply get deals in localities that will not benefit from data centers if other places demand that they at least pay for themselves. Why would that happen? It happens because it will personally benefit the people who have been charged with making the decision.
> Once you get rid of "USA is a specially broken place"
Again, compared to who? You think they'll have an easier time in Europe? You think if they want to build them in Peru that the residents will benefit?
You need a coordinated policy to encourage everyone to tax them extra, or to require them to put down money for new electrical infrastructure or so on before they break ground. It would be good to have federal action on that.
And in doing so, we have messed up incentives on both sides of the aisle.
Edge compute should be a federal build out IMO. It is considered a matter of national security, right? I could be wrong, so I'm open to discussion.
We build data centers everywhere of all sizes and shapes, they’re part of US Dept of Energy. Companies and individuals can operate them, plug into them like self-storage unit business model.
It might open up a lot of opportunities to have that level of localized edge compute, and historically our computing requirements have only ever grown. Give as many people (and communities) a stake into the future of computing!
Is it though? Maybe the construction itself but after that running a data center doesn't need that many on-premise people, like it can be in the two digit range which is not a lot at all. And even then on-premise people won't be the highest paid engineer jobs but rather security and technicians.
Data centers simply don't require very many people to operate.
Well, that's not the plan. The plan is massive tax cut, infrastructure built with public money and... that's it!
It's about more than money. People live in rural areas for reasons and data centers are rather antithetical to them.
If you want to know details, listen to those people
I remember earlier this year somebody posted the results of a large survey that concluded most people would rather have a nuclear power plant in their backyard than a data center. Of course everybody would rather have nuclear power plant in their backyard because then they get cheap, clean, reliable electricity. They get nothing from the data center except competition for basic utilities.
I also remember how the person couldn't believe the results and found them astonishing. WTF. This just reinforced for me how so many people in technology are either narcissistic, short sighted (exceptionally naive), or have some sort of qualified mental health defect.
Jobs in places where there usually aren't any. Some of these places are nearly dead or dying towns/communities and they're getting a huge jolt of new economic activity. Once the data centers are built there will be a steady base of new workers/jobs to maintain them.
DCs need some guards, some highly trained technicians, and that's mostly it, right? maybe 20-30 jobs per? That's not exactly opening up a new major employer like a factory or steel mill.
If you're facing local protests, my suggestion is offer to fund their schools for 5 years with a bond or something like that. Put the company name on a new power plant. It won't take up most of the cost of building and it'll probably get town hall to approve the zoning for you.
Do they even need the technicians on full time? I feel like those are flown out if something is wrong and otherwise can just monitor remotely?
This is the incorrect analysis because it is not what is happening. If you can understand this, you can start to understand the resistance. Data centers are a tangible proxy to Ai and the Oligarchy. They look like the globalization, financialization, and deregulation that wrecked the economies they had prior - on steroids.
You can tell them as much as you want how safe nuclear power is. You may even be right. But after Fukushima, and Three Mile Island, and Chernobyl, they don't believe you that it will reliably stay safe forever.
There's a reason lots of data centers are built around airports (already noisy) or in places that can't support other types of development for some reason.
Many local governments have failed in their responsibility to constituents in approving placement of DCs that should or could have better local projects like housing or retail.
Do you have another argument that doesn't rely on trickle-down economics?
You would never build residential development at the threshold of an airport for obvious reasons. So the remaining options are either leave the land undeveloped and get nothing, or build something that doesn't need quiet to generate tax revenue.
I'm not advocating for or against specific tax agreements because that is between the company and local government, who represent the people.
Oh, and by the way, not that you'd care given your aggressive tone, but US corporate tax rate is about in line with OECD rates: https://taxpolicycenter.org/briefing-book/how-do-us-corporat...
As a result, electricity prices set a new record. At peak my price per kw/h was 22 times higher than it was in the summer. Twenty two times.
Maybe all that's still not going to cover you in all cases, but...I'm not anti-nuclear by any means, but my understanding is that the upfront costs are very high and take a long time to recoup even in the best of cases. If it's only used as a backup for when cheaper renewable energy can't be generated or bought I'm not sure if the economics will ever work out anymore.
People (in the US anyway, ymmv elsewhere) really, really hate datacenters and just vaguely distrust nuclear power (without a lot of conviction).
In any case, most of us would rather have one beating than six, but that doesn't mean we want one beating.
Not all buildings are built or powered the same way in all countries based on the weather of their location.
American lenses about American Datacenters will be about whats happening in America, not other places.
Now there's a tech race. Data centers are a necessary evil for the West to win it. And suddenly they're getting massive negative coverage. Just today I saw articles about both the far left and far right prioritizing the issue.
I'd want to see a lot more evidence for an actual conspiracy than this.
There is a lot of the broader anti-AI sentiment, so it's possible that the entire thing is just "people want to hear AI bad, so there's market in saying AI bad" - with media and politicians both recognizing the opportunity. But it wouldn't surprise me at all if some of it turned out to be coordinated influence campaigns.