US Senate questions benefits of AI data centers — TIME
A US Senate investigation alleges that major technology companies may be misleading the public about the real costs and benefits of building data centers for artificial intelligence development. The year-long review was conducted by the offices of Democratic Senators Elizabeth Warren, Chris Van Hollen, and Richard Blumenthal, TIME reports.
Investigators examined the activities of Amazon, Google, Meta, Microsoft, CoreWeave, Digital Realty, and Equinix. They requested information from the companies and interviewed employees. According to the report, data center developers emphasize construction jobs when seeking incentives. At the same time, several companies declined to provide comprehensive data on the number of permanent employees.
Energy consumption and jobs
Some companies said that a data center’s permanent staff amounts to roughly one employee for every megawatt of electricity demand. Thus, a 100-megawatt facility may consume about as much electricity as 100,000 households while providing around 100 permanent jobs after construction is completed.
The report also notes that developers may benefit more from sales-tax exemptions on computer equipment than from property-tax incentives. According to the document’s authors, graphics processing units account for about 39% of the cost of an average one-gigawatt AI data center.
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Costs for consumers
Senate investigators found that none of the seven companies agreed with the principle that it should pay for new energy infrastructure that would not be needed without its data centers. The companies said they were prepared to cover direct costs for servicing their facilities, but believed that new power plants and transmission lines could also benefit other consumers.
The report mentions a power plant in Richland Parish, Louisiana, which local electricity provider Entergy is seeking to acquire. Analysts believe the deal was primarily driven by Meta’s planned $50 billion data center, which is expected to consume 4,500 megawatts of electricity — roughly four times the peak demand of all of New Orleans. Estimates suggest the acquisition could raise the average Entergy customer’s monthly bills by $8 to $13. Meta denied that its project is responsible for these costs.
Transparency of agreements
The report also alleges that Amazon, Google, Meta, and Microsoft regularly sought nondisclosure agreements while implementing data center projects. According to the investigation’s authors, such agreements limited public oversight of arrangements concerning taxes, electricity rates, and public infrastructure. Microsoft told investigators that it would stop requiring such agreements from local authorities, and Amazon announced a similar policy. Google and Meta did not agree to abandon this practice at the local level.
In September, the US House of Representatives approved the bipartisan Ratepayer Protection Act by 417 votes to three. It provides that states must consider standards under which large electricity consumers, including data centers, would pay additional costs for electricity generation, transmission, and distribution. In the US Senate, the bill failed a procedural vote: 57 senators voted against advancing it, while 43 voted in favor.
