The Data-Center Panic Is Overblown - The Atlantic

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Data centers are allegedly an unmitigated disaster: They guzzle water, strain electric grids, and raise prices, all while offering almost nothing in return. Little wonder that according to a recent Gallup poll, 71 percent of Americans oppose the construction of new AI data centers in their area. Politicians of both parties are proposing moratoriums on new builds, and local officials who have approved construction in the past are losing reelection because of it.<br>Florida Governor Ron DeSantis recently captured a popular feeling about the pointlessness of building new data centers for the purpose of powering AI: “Oh, we’ve got to build a data center and charge you more because we want to do videos where I can put your head on Marlon Brando’s body and you can be Don Corleone.”<br>But the data-center panic is overblown. Most of the complaints inflate the costs of data centers and overlook the fact that, in some contexts at least, they can bring real benefits. If saying no is good politics, it isn’t always good policy.<br>Let’s start with the claim that data centers do not create good jobs. As Tucker Carlson put it on his show last month, they are “vinyl-clad warehouses in which sit not people making things, but computers computing things.” Sure, data centers produce a brief construction boom—but “that’s not permanent labor,” Greg LeRoy, the founder of an anti-data-center policy group, told Grist.<br>From the April 2026 issue: Inside the dirty, dystopian world of AI data centers<br>Data centers may not be the employment equivalent of 1950s-style assembly plants—and their promoters frequently exaggerate the possibilities—but new research shows that they do bring good jobs at attractive wages. Comparing counties that opened data centers with similar ones that did not, the economists Dany Bahar and Greg Wright found that the developments increased overall local employment by 4 to 5 percent. Construction employment rose 11 percent, and information-sector employment rose by 22 percent. Many of the jobs that data centers provide—opportunities for electricians, engineers, and plumbers—are of precisely the sort that AI can’t replace (yet). And the people who fill them, Bahar told me, tend to be locals, not new residents drawn from afar. Bahar and Wright found that the employment gains outlasted the construction phase by at least five to six years; average wages in the counties studied ticked up 3 to 4 percent after data-center construction.<br>The complaints about job creation may also be out of date. Much of the existing data is from co-location facilities, whose owners are essentially landlords renting out space for various companies’ computers and hardware. But data centers in the AI age are generally “hyperscale” facilities, larger projects that are owned and operated by individual companies such as Google and Amazon. Bahar and Wright found that hyperscale centers create far more information-sector jobs than the co-location centers of the past.<br>Michael Mandel, the chief economist for the Progressive Policy Institute, told me that employment gains are likely to grow as new data centers attract businesses that use AI. Companies using the technology for advanced applications—such as for autonomous vehicles and medical research—may benefit from proximity to these centers, because information can travel faster from source to user. The margin is imperceptible to most people using Claude or ChatGPT, but for companies that depend on real-time AI-powered decision making at scale, tiny differences in latency matter. The kinds of businesses that will drive the AI economy are thus likely to set up in communities that invest in data centers.<br>Another popular complaint about data centers concerns their water use. Critics argue that AI wastes billions of liters of water every year and that this is an “environmental justice crisis.” Food and Water Watch cites AI’s “enormous thirst for water” as a reason to ban new data-center construction, which it and 200 other environmental organizations urged Congress to do last year. Some tech companies have fueled these complaints by refusing to disclose the amount of water they’re using. In a recent congressional hearing, Representative Alexandria Ocasio-Cortez alleged that a Meta data center in Georgia had degraded the local water supply so much that citizens were left with undrinkable water—she held up jars of their brown, sediment-filled water as props.<br>Data centers certainly do use water. They are basically warehouses of tightly packed, high-powered computers, and when computers run, they get hot. Most data centers—though not all—use water for cooling. But many of them use a “closed loop,” which doesn’t actually waste much, because the water is recycled repeatedly for the same purpose. And many statistics about data centers’ water use are misleading in that they include “indirect” water use too. The Substack writer Andy Masley...