DI25009 Growth of Datacenters V01 081025

 Invasion of the data centres pits Big Tech against Americans

Louisa Clarence-Smith

Sam Altman, chief executive of OpenAI, frames the need to build data centres around the risk of having to choose between curing cancer and improving public education.

In a blog post, the billionaire wrote: “If AI stays on the trajectory that we think it will, then amazing things will be possible. Maybe with 10 gigawatts of compute, AI can figure out how to cure cancer. Or with 10 gigawatts of compute, AI can figure out how to provide customised tutoring to every student on earth. If we are limited by compute, we’ll have to choose which one to prioritise; no one wants to make that choice, so let’s go build.”

Altman reiterated his argument that “the world needs much more compute” on Monday after the ChatGPT maker announced a multibillion-dollar deal to acquire AI infrastructure from the chip designer Advanced Micro Devices.

The deal came hot on the heels of Nvidia’s announcement last month that it would invest up to $100 billion in OpenAI to build AI infrastructure and new data centres with a capacity of at least 10 gigawatts of power, or the equivalent of peak electricity demand in New York.

‘I think most people just want to get on Google and get a search engine … And all of a sudden they are confronted with all this AI stuff’

Yet despite the bold claims of AI’s potential by tech bosses, the reality of building computing power in the present is being met with scepticism by communities facing a sharp rise in data centre proposals. In Indiana, where Google formally withdrew a $1.5 billion data centre proposal last week after fierce local opposition, Bryce Gustafson, an organiser at Citizens Action Coalition, which campaigns on energy issues, said data centres were largely seen as a “nuisance” built for non-essential generative AI, in what feels like an “invasion of Indiana”.

Gustafson said: “I think most people just want to get on Google and get a search engine … And all of a sudden they’re confronted with this AI stuff.” Gustafson said he had “never seen” such a large opposition, including from Republican city councillors, to a local issue as he did with Google’s data centre, which raised fears of utility bills hikes.

“People are extraordinarily sensitive to rate increases,” he said. “Why are they coming here? They want our water. They want our tax breaks.”

In the past 15 months, about ten data centre projects have been halted in Indiana. In some cases, the opposition has been to farmland being reclassified as industrial land.

Even in some instances when politicians have approved rezoning, residents have filed lawsuits to try to prevent the developments.

In Amarillo, Texas, Fermi America, co-founded in January by the former US energy secretary Rick Perry, is betting on the potential of Project Matador, a site of more than 5,000 acres. The developers hope to attract tenants such as xAI, OpenAI and Anthropic to occupy data centres. Fermi has yet to generate any revenue, sign any tenants or secure a licence for nuclear power generation. Yet, already protesters have expressed concerns about the burden of the project on the town’s already stressed water supply.

Meanwhile, in Memphis, Elon Musk is hoping to develop Colossus data centres for xAI, dividing the city over the huge power and water demands of the infrastructure.

Tech companies should be worried that protest groups, unconvinced by the benefits of data centres, are mobilising. Gustafson said he had been contacted by protesters seeking advice on how to block planning proposals in several states.

Will Rinehart, senior fellow at the American Enterprise Institute, said the tech giants would need to win support at a local level if they are to achieve their AI ambitions. “There are benefits that come with these [AI infrastructure] systems, but those are really diffuse and usually people don’t see them very clearly,” he said.

“The costs are very localised. People see it on their energy bill. So, those two things combined, you know, good luck to the tech companies.”

Louisa Clarence-Smith is US Business Editor of The Times

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