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Microsoft built two datacenters west of Phoenix, with plans for seven more (serving, among other companies, OpenAI). “Microsoft has been adding data centers at a stupendous rate, spending more than $10 billion on cloud-computing capacity in every quarter of late,” writes the Atlantic. “One semiconductor analyst called this “the largest infrastructure buildout that humanity has ever seen.”

But is this part of a concerning trend?
Microsoft plans to absorb its excess heat with a steady flow of air and, as needed, evaporated drinking water. Use of the latter is projected to reach more than 50 million gallons every year. That might be a burden in the best of times. As of 2023, it seemed absurd. Phoenix had just endured its hottest summer ever, with 55 days of temperatures above 110 degrees. The weather strained electrical grids and compounded the effects of the worst drought the region has faced in more than a millennium. The Colorado River, which provides drinking water and hydropower throughout the region, has been dwindling. Farmers have already had to fallow fields, and a community on the eastern outskirts of Phoenix went without tap water for most of the year… [T]here were dozens of other facilities I could visit in the area, including those run by Apple, Amazon, Meta, and, soon, Google. Not too far from California, and with plenty of cheap land, Greater Phoenix is among the fastest-growing hubs in the U.S. for data centers….

Microsoft, the biggest tech firm on the planet, has made ambitious plans to tackle climate change. In 2020, it pledged to be carbon-negative (removing more carbon than it emits each year) and water-positive (replenishing more clean water than it consumes) by the end of the decade. But the company also made an all-encompassing commitment to OpenAI, the most important maker of large-scale AI models. In so doing, it helped kick off a global race to build and deploy one of the world’s most resource-intensive digital technologies. Microsoft operates more than 300 data centers around the world, and in 2021 declared itself “on pace to build between 50 and 100 new datacenters each year for the foreseeable future….”

Researchers at UC Riverside estimated last year… that global AI demand could cause data centers to suck up 1.1 trillion to 1.7 trillion gallons of freshwater by 2027. A separate study from a university in the Netherlands, this one peer-reviewed, found that AI servers’ electricity demand could grow, over the same period, to be on the order of 100 terawatt hours per year, about as much as the entire annual consumption of Argentina or Sweden… [T]ensions over data centers’ water use are cropping up not just in Arizona but also in Oregon, Uruguay, and England, among other places in the world.

The article points out that Microsoft “is transitioning some data centers, including those in Arizona, to designs that use less or no water, cooling themselves instead with giant fans.” And an analysis (commissioned by Microsoft) on the impact of one building said it would use about 56 million gallons of drinking water each year, equivalent to the amount used by 670 families, according to the article. “In other words, a campus of servers pumping out ChatGPT replies from the Arizona desert is not about to make anyone go thirsty.”

Few big tech companies that are building and hiring across America bring that wealth with them when they set up in new communities. Instead, they hire armies of low-paid contractors, many of whom are not guaranteed a job from one month to the next; some of the contracting companies have a history of alleged mistreatment of workers. Nor do local governments share in the companies’ wealth; instead, the tech giants negotiate deals — the details protected by non-disclosure agreements — that exempt them from paying taxes that would fund schools, roads and fire departments….

Globally, by the end of 2020, there were nearly 600 “hyperscale” data centers, where a single company runs thousands of servers and rents out cloud space to customers. That’s more than double the number from 2015. Amazon, Google and Microsoft account for more than half of those hyperscale centers, making data centers one more field dominated by America’s richest and biggest companies… Google in March said it was “investing in America” with a plan to spend $7 billion across 19 states to build more data centers and offices. Microsoft said in April that it plans to build 50 to 100 data centers each year for the foreseeable future. Amazon recently got approval to build 1.75 million square feet of data-center space in Northern Virginia, beyond the 50 data centers it already operates there. Facebook said this year it would spend billions to expand data centers in Iowa, Georgia and Utah; in March it said it was adding an 11th building to its largest data-center facility in rural Prineville, Oregon…

Facebook has spent more than $2 billion expanding its operations in Prineville, but because of the tax incentives it negotiated with local officials, the company paid a total of just $119,403.42 in taxes to Crook County last year, according to the County Assessor’s list of top taxpayers. That’s less than half the taxes paid by Brasada Ranch, a local resort. And according to the Oregon Bureau of Labor and Industries, the data center has been the subject of numerous labor complaints… “I’ve spent way too much of my life watching city councils say, ‘We need a big tech company to show that we’re future-focused,'” says Sebastian Moss, the editor of Data Center Dynamics, which tracks the industry. Towns will give away tax breaks worth hundreds of millions of dollars, his reporting has found, and then express gratitude toward tech companies that have donated a few thousand computers — worth a fraction of the tax breaks — to their cash-strapped school systems. “I sometimes wonder if they’re preying on desperation, going to places that are struggling.”

Communities give up more than tax breaks when they welcome tech companies. Data centers use huge amounts of water to cool computer equipment, yet they’re being built in the drought-stricken American West.

The article cites Bureau of Labor Statistics showing that 373,300 Americans were working in data processing, hosting, and related services in June — up 52% from 10 years ago.