Data Centers 101

AI data centers have been discussed in Stokes, Forsyth, Davidson and Alamance counties recently. It is a matter that arouses passions.

Here is a good interview on the topic that provides context and dispels misconceptions, at least to some extent:

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6 thoughts on “Data Centers 101”

  1. The State govt. of North Carolina is subsidizing data centers, and the subsidies are very large.
    The state does this primarily through sales & use tax exemptions and property tax exemptions targeted specifically at data‑center operators. These incentives have grown into one of the largest corporate subsidy categories in the state.

    This was wrong (in the sense that it is economic fascism rather than free market), even before the issues the dangers of AI and the destruction of the environment these AI factories constitute. A good example of “democratic” govt doing the opposite of what voters want. The diametric opposite.

    1. Even if the decision-makers decided that incentives would be extended to job creators, J. Sobran, these data centers would not qualify nearly as much because they don’t employ that many people considering the negative aspects.

      It would be good to get rid of these incentives. Not needed for data centers. Who are the beneficiaries? As the video suggests, Big Tech– already enormously profitable– and real estate investors.

  2. FROM NATIONAL REVIEW:

    American companies are at present engaged in a building spree that puts all prior building sprees to shame. In scale and in speed, the current investment in artificial intelligence eclipses the construction of the railroads, the development of the interstate highway system, the Apollo program, the electrification of the United States, and the Manhattan Project. Per CBRE, “hyperscaler” tech companies are set to spend nearly $4 trillion on AI infrastructure over the next five years.

    Unless, of course, we screw it up.

    And, at this rate, we might. All of a sudden, “data center” has become a dirty word. The environmentalists say that they use too much water. The Luddites point to short-term shifts in electricity prices as a reason to turn back the clock. The NIMBYs say that they hum, vibrate, and cause unspecified psychic damage to animals and humans alike. In consequence, some states have even gone so far as to try to ban data centers completely — without explaining, of course, why the more than 5,000 installations that already exist in this country are exempt from their newfound opprobrium.

    To halt the AI project would be a profound mistake — not least because most of the opposition to data centers is born of superstition, short-termism, and, in some quarters, good old-fashioned mendacity.

    It is true that AI data centers consume enormous amounts of electricity, and that this can lead to brief spikes in the cost of that electricity. It is not true, however, that this problem tends to last for a long time. Historically, electricity markets have responded to sustained and predictable demand by expanding generation and transmission capacity, improving efficiency, and, ultimately, lowering prices for everyone. We saw such a pattern accompany earlier waves of industrial expansion — including electrification, suburbanization, air conditioning, telecommunications, and the growth of the internet — and there is no reason to assume that it will not obtain here.

    It is not true that AI data centers consume enormous amounts of water. This is a pernicious myth that has been spread by left-wing activists who have confused the amount of water that data centers push through their closed-loop cooling systems — systems, that is, in which the same water is circulated and reused repeatedly — with the amount of water that would be needed by a factory that required a constant fresh supply. Despite the specific scaremongering of such activists, it is indisputably the case that a whole host of other ordinary and typically unquestioned activities consume far more water than AI data centers, including the maintenance of golf courses, the irrigation of suburban lawns, the farming of cattle, the cultivation of almonds, and the running of breweries. Yes, data centers use water. All industrial activity does. But, relative to the economic value they produce, this usage is tiny.

    As for the bizarre claims about data centers “humming” in ways that distress nearby residents or livestock? Insofar as this is true, it is a zoning problem similar to any other. Large industrial facilities generate noise — especially if they are badly designed or improperly buffered — but there is no evidence that data centers pose any more of a threat in this regard than highways, factories, airports, substations, rail lines, or any other of the facilities that make a modern nation work. For the last couple of decades, American voters have insisted that they wish to bring manufacturing back to the United States. How peculiar it would be for those same voters to reject it when it arrived because, in the flesh, it looked insufficiently Ruritanian.

    Unless, of course, we screw it up.

    And, at this rate, we might. All of a sudden, “data center” has become a dirty word. The environmentalists say that they use too much water. The Luddites point to short-term shifts in electricity prices as a reason to turn back the clock. The NIMBYs say that they hum, vibrate, and cause unspecified psychic damage to animals and humans alike. In consequence, some states have even gone so far as to try to ban data centers completely — without explaining, of course, why the more than 5,000 installations that already exist in this country are exempt from their newfound opprobrium.

    To halt the AI project would be a profound mistake — not least because most of the opposition to data centers is born of superstition, short-termism, and, in some quarters, good old-fashioned mendacity.

    It is true that AI data centers consume enormous amounts of electricity, and that this can lead to brief spikes in the cost of that electricity. It is not true, however, that this problem tends to last for a long time. Historically, electricity markets have responded to sustained and predictable demand by expanding generation and transmission capacity, improving efficiency, and, ultimately, lowering prices for everyone. We saw such a pattern accompany earlier waves of industrial expansion — including electrification, suburbanization, air conditioning, telecommunications, and the growth of the internet — and there is no reason to assume that it will not obtain here.

    It is not true that AI data centers consume enormous amounts of water. This is a pernicious myth that has been spread by left-wing activists who have confused the amount of water that data centers push through their closed-loop cooling systems — systems, that is, in which the same water is circulated and reused repeatedly — with the amount of water that would be needed by a factory that required a constant fresh supply. Despite the specific scaremongering of such activists, it is indisputably the case that a whole host of other ordinary and typically unquestioned activities consume far more water than AI data centers, including the maintenance of golf courses, the irrigation of suburban lawns, the farming of cattle, the cultivation of almonds, and the running of breweries. Yes, data centers use water. All industrial activity does. But, relative to the economic value they produce, this usage is tiny.

    As for the bizarre claims about data centers “humming” in ways that distress nearby residents or livestock? Insofar as this is true, it is a zoning problem similar to any other. Large industrial facilities generate noise — especially if they are badly designed or improperly buffered — but there is no evidence that data centers pose any more of a threat in this regard than highways, factories, airports, substations, rail lines, or any other of the facilities that make a modern nation work. For the last couple of decades, American voters have insisted that they wish to bring manufacturing back to the United States. How peculiar it would be for those same voters to reject it when it arrived because, in the flesh, it looked insufficiently Ruritanian.

    Since at least the outset of the Cold War, the United States has maintained an unparalleled technological advantage over its geopolitical rivals that, in conjunction with its unique constitutional system, has helped turn it into the world’s preeminent economic and military power. Information technology is the currency of the future, and, if it wishes to control that future, the United States must stay ahead of the pack. To paraphrase Mrs. Thatcher, this is not the time to go wobbly.

    FINIS

  3. MORE FROM NATIONAL REVIEW:

    The governor of New York, Kathy Hochul, has issued a silly executive order that places a one-year moratorium on the construction of data centers that use more than 50 megawatts of power to operate. Signing the instrument — which is the first of its kind in the United States — Hochul said that it was her “responsibility to take action and lead.” Indeed, it is. But this, alas, is not leadership.

    The moratorium is a concession to Luddism and hysteria. It is one thing for a state to establish a set of working regulations or to insist that the cost of innovation must be borne by its beneficiaries. It is quite another to use government power to strangle a new market in its crib. Explaining her position on MS NOW, Governor Hochul made it sound as if the State of New York were a tiny island and she a dictator who had been charged with allocating its meager assets. “I have limited resources here in the state,” she said, “that I’m trying to preserve for the real innovation economy — the jobs like the Microns.”

    BS.

    1. Fred, most of us, if we were honest with ourselves, would concede there are certain unknowns with regard to the issue of AI and data centers. Hochul’s action suggests she thinks she has absolute certainty. And it was tyrannical.

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