The Question of Data Centers

Data centers have become indispensable to modern life and business. Everything from financial transactions, email, and data storage to social media, streaming, and AI requires a data center, and they’re proliferating across the country. 

Traditionally, data centers have been viewed as valuable economic development projects, generating local tax revenue and creating well-paying jobs without the downsides of traffic or air quality impacts. For years, incentivizing a data center was a clear win for a community and its economic developers. 

The landscape is different today. For the first time in a generation, our electrical infrastructure is straining under rising demand—largely driven by the rapid growth of data centers. Water capacity is also facing increasing pressure in many regions. Now, the ability to provide enough power and water to support both existing residents and businesses, including new economic growth like data centers, has become just as critical as managing traffic, air quality, and other concerns. 

Data centers are here to stay. They’re a fact of modern business and life. The question now is which communities will take the lead in recruiting and hosting them, and how they’ll balance the necessary infrastructure with the potential economic rewards.

Check out our new policy brief for more details about data centers.