by Ken Fody

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Data centers are wrongly getting a bad rap based on out-of-date information. United States Senators, like Elizabeth Warren and Bernie Sanders, want them put on hold.  The State of New York is moving a bill to impose a one-year moratorium on the construction of data centers.  If word goes out that one is coming to your community, the “Not In My Backyard” types immediately start objecting.  Opponents don’t care that data centers provide good jobs and tax revenue for communities.  Nor do they care that data centers are important technological centers supporting the next big thing, Artificial Intelligence (AI).  Worst of all, the fears expressed by opponents are outdated and don’t apply. 

Data centers are specialized facilities designed to house large-scale IT infrastructure – primarily servers, storage systems, and networking equipment.  These devices generate a lot of heat and require cooling to prevent overheating and damage to the machinery.  The energy and water required to provide that cooling is the nub of the issue. 

When people hear a data center is coming to their area, they think their community will suffer brownouts, electric prices will skyrocket, and the water supply will be sucked dry.  But that’s how old data centers worked; it’s not the way modern data centers operate.  

The power consumption of data centers is still extreme, often requiring tens of megawatts – enough to power small cities.  In the past, data centers generally just plugged into the power grid and competed for electricity.  That’s not what is happening today.  President Trump negotiated with major technology companies to build, bring, or buy new power generation sources when they build a data center.  The companies are to pay the full cost of all new power-delivery infrastructure and will negotiate separate rate structures with utilities and state governments to ensure the data center costs are not passed on to consumers. 

Major technology companies like Amazon, Google, and Microsoft, as well as AI companies like OpenAI and xAI, all signed the pledge in support of President Trump.  Granted, the pledge is not binding, but it’s very public, and State utility agencies are aware of it and have the ability to enforce it through their regulation of power companies.  Also, Trump has called on Congress to enact a law similar to the pledge. 

The other concern – water consumption – is particularly important for many areas of the company where water usage is already straining supplies.  If data centers worked as older centers do, that would be a valid concern.  But today’s data centers aren’t your grandfather’s data centers.  The water consumption of a modern data center is far, far below that of older data centers. 

Older data centers used evaporative cooling towers, chillers, and open-loop systems.  These are extremely water-intensive.  But those are older data centers.  Modern data centers have significantly reduced water consumption.  For example, a large older data center could use 1 to 5 million gallons of water per day.  Thanks to improvements in technology, modern data centers today use 300,000 to 500,000 gallons per day, which is equivalent to what a golf course uses each day.  But the industry is not stopping there – very advanced data centers are approaching near-zero daily water usage.  

Rather than opposing data centers, people could petition their local and state governments to require data centers constructed in their areas to use newer technology to reduce water use and to bring their own power, so as not to impact consumers. That leaves the question: why do people oppose good-paying jobs with bad information?  

Kevin O’Leary, known as Mr. Wonderful on Shark Tank, has identified the Chinese Communist Party (CCP) as being the ultimate culprit behind the anti-data center protests.  O’Leary was involved in financing the construction of a large data center in Utah, and the project faced intense opposition.  O’Leary had technology experts on his team investigate the IP addresses of various threats and opposition to the data center his company was building, and the roads led back to China.  O’Leary argues this is not surprising since China is competing with the United States for AI supremacy, and that hobbling US development of data centers, necessary for providing the computing power to support AI, would be to China’s advantage.   

That’s not to suggest the local people in Utah raising their hands in opposition to O’Leary’s data center are Chinese agents.  It is very likely they are well-intentioned individuals who are acting on outdated or incorrect information.  Their community, and all communities, would be better served if people negotiated with data centers, rather than opposed them.  People can ask for the bonus of good jobs without the onus of impacts on water and power.  Given the money data center operators stand to make once operational, they’d be willing to meet those requests in return for completing construction faster and at lower legal costs.

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