Data Centers
Worries over data centers causing of grid drain, water exhaustion, and soaring costs have fueled moratorium calls—yet they have modest footprints, drive efficiency innovations, and boost jobs and GDP.
What are data centers?
Data centers are physical facilities that provide the infrastructure for data storage, compute, and inference.1
Large data centers have been around for decades, powering the era of cloud infrastructure—AI is just a portion of data center usage.2
With the rise of AI, companies are building out more data centers to train models and power user queries.
How much water do data centers really use?
Data centers can use millions of gallons of water per day, put in perspective:
Many data centers use non-water cooling systems and are developing more efficient methods.
The major hyperscalers—Amazon, Google, Microsoft, and Meta—all plan to be water positive by 2030.5
Are data centers increasing electricity costs?
Data centers account for approximately 1.5% of global electricity consumption (2024).6
When data centers enter a new market, massive investments in new energy supply reduces overall electricity costs for consumers.7
Virginia, “the data center capitol of the world,” saw only a 3% rise in electricity rates compared to the 6.5% national average.8
North Dakota has had a 40% increase in electricity demand due to new data centers, yet their inflation-adjusted electricity prices have fallen.9
Green energy mandates are a leading culprit for rising electricity prices, as states with stricter renewable energy policies have higher electricity rates.10
How do data centers affect the economy?
Data center investment exceeds $50B annually in the U.S.11
Between 2017 and 2023, direct employment through data centers grew five times more quickly than general employment in the U.S.12
Over that same period, data centers have contributed $209 to $404 billion in annual labor income to American workers13
Charts
Additional Resources
“What is a Data Center?” from Amazon.
Overview of what a data center is from Amazon.
“There’s a reason electricity prices have been rising. And it’s not data centers.” from The Washington Post.
The article from The Washington Post shows that data centers are not the culprit for rising electricity prices.
“Energy and AI” from the International Energy Agency.
Report on AI data center energy use across the world.
“From Tokens to Burgers: A Water Footprint Face-Off” from Semianalysis.
A study from Semianalysis found that the xAI Colossus 2 data center uses the water equivalent of two and a half In-n-Out joints.
Build American AI tweet on AI data center usage.
One piece of paper uses the same amount of water as 2,550 prompts, one pot of water uses the equivalent of 5,000 prompts, and one pair of jeans uses the equivalent of 5.4 million prompts.
“Virginia’s electricity costs rise amid data center boom” from Axios.
The chart from Axios shows how Virginia, with some of the most data centers, had one of the smallest increases in electricity prices.
Decreasing property tax rates in Loudon County, Virginia from John Arnold.
In Loudon County, Virginia, the data center buildout has helped the county decrease property tax rates. The average savings for homeowners is about $3,400 per year.
”The Rise of AI: A Reality Check on Energy and Economic Impacts” from the National Center for Energy Analytics.
This thorough report from the National Center for Energy Analytics discusses the energy needs and potential benefits of data centers.
“Economic Contributions of Data Centers in the United States” from PWC.
A report from PWC highlights the economic benefits from data centers in the US.