Last year, a data center proposal surfaced in a Texas county, promising economic benefits but lacking specific details, according to a local county commissioner. Most existing data centers are found in urban locations. However, 67% of future centers are planned for rural areas like Hood County, Texas. Dave Eagle, an attorney and one of the five county commissioners, shared his perspective on how these proposals were presented.
“They approached us promising jobs and community upgrades without specific details,” Eagle remarked. The proposal from Amazon Web Services requested up to 90% in property tax rebates for 30 years. Although Eagle voted against it, AWS found approval in a neighboring county where they received the tax incentives they wanted.
Amazon evaluates numerous potential sites and ultimately decided not to build in Hood County. We work with local leaders to create jobs and support public services where we do invest.
Data Center Expansion
Eagle’s concerns reflect a broader apprehension about the burgeoning number of data centers. The U.S. hosts over 3,000 such centers, with another 1,500 proposed. The increase in Artificial Intelligence (AI) applications correlates with this demand, requiring facilities equipped with high-capacity computing power.
New data centers dwarf their predecessors in size and energy use. A large center two years ago might have used five megawatts, whereas AI centers today may demand around 1,000 megawatts, says Michael Webber, a University of Texas professor. Wall Street estimates compiled by FactSet indicate Hyperscalers like Meta, Amazon, Google, and Microsoft will spend $1.5 trillion on data centers through next year.
Webber notes that some experts foresee the U.S. reaching a limit in data center construction while others anticipate unending demand for more intelligence capacity. AI’s potential extends to self-driving cars and robotics, and the quest for artificial general intelligence could unlock advances in medical research.
Concerns Over Data Centers
Despite the positives, data centers face bipartisan critique. Texas resident and Marine veteran, Jazmin Villegas, voiced her concerns when a data center was proposed near her rural home. Villegas seeks information on possible impacts, especially regarding environmental health.
In Chandler, Arizona, residents concerned about water supply previously scrutinized the water use to cool data centers. Loudoun County, Virginia, known for its high concentration of data centers, has seen increased electricity costs partly driven by expanded data center operations. “The community worries are justified,” Webber noted.
Political Repercussions
Texas Governor Greg Abbott has historically supported tech investments in the state, celebrating Google’s $40 billion investment. Nonetheless, his stance shifted. Recently, Abbott halted new data center connections to Texas’ power grid until they pass an audit.
His opponent in the gubernatorial race, Gina Hinojosa, campaigns for a moratorium on data center development. This issue brings together diverse political viewpoints, with more than 60% of Americans across party lines opposing local data center developments, according to Gallup polling.
In Red Oak, Texas, resident Dave Lowe reflects a growing sentiment. Typically a conservative voter, Lowe feels data centers threaten his community enough to reconsider his voting strategy. Several dozen local residents meet regularly to discuss strategies against a proposed campus encompassing roughly 800-acres of their rural neighborhood.
Both Amazon and Compass Datacenters have engaged with local communities in their development plans. In an emailed statement, Compass stated that they consider community feedback in their operations, employing closed-loop water systems and power grid investments without raising local costs.