Despite growing public and political opposition to AI data centers, new research suggests these facilities provide significant local economic benefits, including increased employment and substantial tax revenue.

Key Points

• Economists Dany Bahar and Greg Wright found that data centers increase local employment by 4 to 5 percent and boost average wages by 3 to 4 percent.
• Data centers account for less than 0.5 percent of total U.S. freshwater use, significantly less than the water consumed by golf courses or almond farming.
• Loudoun County, Virginia, generates nearly half of its property-tax revenue from data centers, allowing the local government to fund schools and lower residential tax rates.
• While critics cite energy strain, data centers can drive infrastructure investment, and their impact on electricity prices varies significantly based on regional grid capacity.
• Modern "hyperscale" facilities owned by companies like Google and Amazon create more information-sector jobs than older co-location data centers.

Why it Matters

The debate over data centers often conflates legitimate logistical challenges with broader anxieties regarding the rapid expansion of artificial intelligence. Evaluating these projects based on specific regional needs rather than blanket opposition allows communities to better leverage the economic growth and infrastructure funding that these facilities can provide.