Executives at Microsoft Corp and Alphabet Inc’s Google countered criticism of the rapid expansion of data centres at this week’s climate meetings in New York.
They sought to ease the concerns by discussing steps they’re taking to shield consumers from the cost of new facilities, backing the workforce and highlighting efforts related to water usage.
The questions "we’re hearing communities asking are really important,” said Melanie Nakagawa, Microsoft’s chief sustainability officer, speaking on Sept 23 at a Bloomberg Green event in New York. It’s led to discussions about "what communities should expect when it comes to electricity.”
Amanda Peterson Corio, global head of data-centre energy at Alphabet’s Google, said one of the biggest obstacles facing data centres is that they’re "politically hated on the left and the right, and we’re going into elections, and a lot more money is going to be spent.”
The resistance is already disrupting projects. Roughly 45 developments worth US$68bil (RM276.8bil) were blocked or delayed by local pushback in the second quarter of this year, according to a report from research group Data Center Watch. Thirty statehouses also introduced measures addressing issues such as data-centre siting, electricity and water, with many adopting them.
Microsoft, Google and Amazon.com Inc, along with Meta Platforms Inc, are leading developers and consumers of data-centre capacity.
Microsoft is focused on initiatives such as making sure data centre-related costs are "ring-fenced,” supporting workers and focusing on water efficiency, Nakagawa said.
"It is so critical right now, particularly in America, that we are investing in the workforce,” she said.
As for water, "one of the things we wanted to be was really transparent,” Nakagawa said. "So earlier this year in our sustainability report, we actually released the data of what is the water usage out of our data centre campuses.”
Water shortages have emerged as a prime concern amid the boom in data-centre construction.
Kara Hurst, Amazon’s chief sustainability officer, said that 90% of the time the company isn’t using water to cool its data centres.
"That’s an important statistic because there’s a lot of misinformation out there about water,” she said.
Hurst also called for renewed attention to grid stability, saying that requires sound policies to spur investment. That should include clean energy such as wind, solar and nuclear power, she said on Sept 23 at the Bloomberg event.
"The best thing we can do to make sure we recognise all this economic benefit is all work together to help change the political narrative on this and unlock the bottleneck because the upside is huge,” Google’s Corio said on Sept 22 during a presentation at the Dynamo Energy Transition Summit in New York.
At a climate event on Sept 22, Illinois Governor JB Pritzker said the concerns about data centres are appropriate, citing not only their enormous electricity demand but also water use, noise and zoning issues. But he stopped short of calling for a ban.
"Just saying we’re going to have a moratorium, I don’t think by itself is the answer,” he said.
Instead, Pritzker said states should impose conditions on new facilities: "If we are going to allow them anywhere, we have to make sure they’re bringing their own clean energy and that they’re using closed-loop water systems. We’ve got to require that.”
While data-centre backlash is widespread, it’s "a bit irrational,” said Brook Porter, a partner at G2 Venture Partners, an early backer of Crusoe, the startup building OpenAI’s massive Stargate project in Abilene, Texas.
He views the opposition as a sign that people don’t yet understand how AI can help them. "I think the honest answer is most people haven’t yet experienced the benefits of AI,” he said. "Right now it’s just this noisy, scary threat of like, ‘it’s going to take my job.’”
To avoid backlash, data centre developers will need to build far away from sensitive grids and population centres, as well as reframe data centres as job creators and industry enablers, Porter said in an interview at a climate event in New York.
In the emerging markets, there’s little prospect of data centres proliferating where the notion of sharing precious energy resources with AI would be out of place, according to World Bank Group President Ajay Banga.
"Emerging markets don’t have a lot of those data centres, and it’s not coming, trust me,” Banga said at the Bloomberg event. "You need computing power. Lots of it. You need electricity. Lots of it. More than what the developed world also has in some cases, let alone these developing countries.”
Meanwhile, the world’s biggest banks are using this week’s meetings to position themselves for business from the massive upgrade of the US grid, which is being pushed to its limits by an unprecedented surge in power demand, largely from data centres.
Heather Zichal, JPMorgan Chase & Co’s global head of sustainability, said the bank plans to meet with more than 100 clients at the event, with financing for grid modernisation a key focus of the discussions.
"We’re entering an era where access to power increasingly shapes where companies invest, grow and compete,” Zichal said on Sept 22 in an interview. – Bloomberg
