Alaska's Data Center Rush: What's the Real Cost?

Alaska is in the spotlight as a potential hotspot for data centers, driven by the growing demand for artificial intelligence. The state's governor has been actively courting tech giants like Microsoft, Facebook, and Amazon, showcasing sites in Anchorage and Fairbanks. The idea is that these data centers could boost the economy, create jobs, and position Alaska as a tech leader. But before jumping on the bandwagon, it's crucial to consider the downsides. Data centers are essentially large facilities that house the infrastructure needed to support AI and other digital services. They come in two main types: massive hyperscale facilities and smaller microgrid data centers. The former can consume as much electricity as 100, 000 homes, which is a significant concern given Alaska's energy landscape. The Northern Alaska Environmental Center (NAEC) is urging caution. They point out that data centers have high energy demands, especially for cooling. While Alaska's cold climate is an advantage, cooling still requires a lot of water. The NAEC advocates for minimizing water use and reusing waste heat for local heating. Another major concern is the source of electricity. Most data centers still rely on fossil fuels, which contradicts global efforts to decarbonize. The NAEC suggests that any new data center should be required to build or contract for an equivalent amount of clean energy generation.There are also concerns about electronic waste, or e-waste. Data centers generate a lot of e-waste, which contains hazardous materials. Given Alaska's remote potential sites and limited recycling infrastructure, this is a significant issue. In their rush to attract data centers, some states have granted substantial tax breaks and subsidies, often with limited public benefit. Alaska should learn from these mistakes. Before approving any new data centers, legislation should ensure that corporations do not get discounted power rates or tax breaks that pass additional costs to ratepayers. Data centers may provide some economic diversification, but they are highly capital-intensive and employ few people for operation. Companies should be required to train and hire local residents. Beyond energy, economics, and the environment, there's a profound issue: data centers expand the compute available for increasingly capable AI systems. Some researchers argue this could accelerate progress toward AI that matches or exceeds human capabilities, along with new risks. Ultimately, the greatest cost of data centers and AI may be the changes wrought to our humanity and society.