Data centers are taking over the world, and the chances are high that someone is, at this very minute, planning to build one in (or near) your backyard. That’s because the AI boom is ongoing, and to produce AI, you need cloud, and to make cloud, you need rows upon rows of servers. There is apparently one location in the U.S. where you may be safe from these friendly little server farms, and that place is Minnesota.
The Minnesota Star Tribune reports that, despite the fact that companies are champing at the bit to build over a dozen new data centers in the state, several such projects have recently stalled. For example, the company Oppidan, a real estate firm involved in data center development, recently paused work on two of its three data center projects in the state. Why? The newspaper notes that companies may be concerned that “Minnesota’s regulatory climate will slow” a business that is “poised for explosive growth.”
What’s so bad about Minnesota’s “regulatory climate”? Maybe it’s the fact that it involves…you know, regulations. Indeed, the Minnesota legislature recently passed a bevy of laws aimed at introducing potential guardrails for the data center industry, including new rules on “energy and water consumption” and regulations that are “meant to shield utility customers from paying for the costs of supplying power to data centers,” the Star Tribune writes.
Data center construction has seen a boom all over the country. As companies rush to stand up these new hubs of “AI infrastructure,” they are also stirring controversy and political backlash. One of the more common complaints to have popped up is that they may be raising everybody’s electricity bills. While the impact of data centers on regional energy consumption can be hard to track, NBC recently reported that in “at least three states with high concentrations of data centers, electric bills climbed much faster than the national average during that period.” Data centers have also been accused of draining vast amounts of water from the small, resource-strapped communities in which they’re located.
Despite these concerns, in many places, data centers seem to be gliding through the necessary regulatory processes with ease. Not quite so in Minnesota, where the Star Tribune notes that Big Tech firms have been trying (and failing) to bully the state legislature into relaxing regulations around their various projects. In addition to the whole thing with Oppidan, the newspaper notes a recent back-and-forth with Amazon that ultimately didn’t go the tech giant’s way:
Late last year, Amazon told the Minnesota Public Utilities Commission (PUC) that its fleet of diesel generators should not require a state permit that would make the company prove the infrastructure is necessary and that there is no cheaper, cleaner alternative. After the PUC ruled against Amazon, the company and others in the industry failed to persuade the Legislature to relax regulations for backup generators because they would run infrequently and emit little carbon pollution. Diesel is not the only option for emergency power, but it’s the most common in the industry.
Tech companies like to claim that such projects “bring jobs” to the small (usually rural) communities in which they touch down. However, recent reporting from NPR suggests that, while such projects may create a flurry of temporary construction worker positions while the center is being built, once they are completed, the centers typically bring “few permanent” positions. “The thing to remember about data centers is that they just don’t hire many people,” journalist Stephen Bisaha said on a recent NPR segment. Bisaha added that most data centers only employ 100-200 people, and that, for some communities, “keeping up with the power demand just isn’t worth the few jobs that come with it.”
Earlier this year, the Wall Street Journal also reported on what it called the “job-creation bust” that is the data center industry. The newspaper interviewed John Johnson, chief executive of data center operator Patmos Hosting, who candidly admitted that his business was not very good at employing large numbers of people: “Data centers have rightly earned a dismal reputation of creating the lowest number of jobs per square foot in their facilities,” Johnson said.
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