US Senate: AI Data Centers Consume a Lot of Energy but Create Few Jobs

A 1-year US Senate investigation has raised serious questions about the impact on local communities of data centers that provide the vast computing power needed to run artificial intelligence (AI) systems. According to the investigation, some companies gave the public misleading information about the costs and benefits of the projects. Although the companies highlighted the jobs created during construction, most did not disclose how many permanent jobs would remain once the facility opened.

At the few companies that disclosed figures, there was just 1 permanent job for every megawatt of capacity. In other words, once a 100-megawatt data center begins operating, it may provide permanent employment for only 100 people. Such a facility consumes about as much electricity as 100,000 homes. The investigation revealed a wide disparity between energy demand and the number of permanent jobs created.

The investigation also examined tax breaks given to data centers. Although property tax breaks attract more attention, exemptions from sales tax on computer equipment benefit companies more because this equipment is frequently upgraded and replaced. According to the estimate, 39% of expenditures go toward expensive GPUs. GPUs are powerful processors used for artificial intelligence computations. When the promised economic benefits fail to materialize, states lose substantial tax revenue.

The investigation covered Amazon, Google, Meta, Microsoft, CoreWeave, Digital Realty, and Equinix. These companies do not want to pay all the costs of the additional infrastructure needed to serve data centers. They are prepared to cover the cost of connecting the facilities directly to the power grid. However, they generally believe they are not responsible for the cost of new power plants and transmission lines built primarily to meet demand from data centers.

Earlier this year, data center operators signed a pledge intended to protect electricity customers from additional costs. An effort to turn it into law failed because senators considered the document ineffective. In their view, large technology companies should pay their share of the costs and operate more transparently. The investigation indicates that broader rules concerning energy consumption and other impacts opposed by local residents will remain on the agenda.