Data-center debate has one winning argument: sheer panic and it will backfire

When New York Gov.Kathy Hochul signed a one-year moratorium on new large-scale data centers via executive order, it became the nation’s first statewide ban.It will likely be popular: Polls find widespread opposition to data centers, and the objections seem to be growing.Around 70% oppose the construction of a new AI data center in their area, with 48% strongly opposed.

Only 27% favor it.Even in Texas, the energy-rich state with the most data centers, Republican Gov.Greg Abbott has called for a ban on new developments in rural areas.The panic surrounding data centers is highly reminiscent of the panic surrounding hydraulic fracturing.And like the fracking ban in New York, also based on junk science and scaremongering — not to mention, initially a “moratorium” — the policy will backfire.The economic case for data centers is indisputable: A single hyperscale facility brings in billions in capital investment, creates a slew of high-paying jobs from construction to engineering and ensures local governments are flush with tax revenue.Big Tech bogeymen such as Microsoft, Google, Amazon and Meta upgrade local infrastructure and create secondary economies, often in struggling areas.Long term, these companies offer self-sustaining economic activity that the magical “green” industry never did or could.In Loudoun County, Va., home of the largest concentration of data centers in the country, studies found the tax revenue from AI infrastructure accounted for 95% of the county’s operating budget.That revenue has funded a $100 million plan for new schools in the county of 455,000 residents.Because energy price spikes have coincided with the data-center debate, one of the major concerns you hear from people is that their utility bills will go up.But the data don’t bear this out.States with fast-growing electricity rates, such as California, have few data centers, while states like Virginia, which leads the country in data-center energy consumption, have seen elec...