Rapid construction of data centers across the US to meet the increasing demand for AI tools has become the subject of debate, with the laws of the land are emerging reduce their construction, too cities again individuals trying to stop them.
As tech giants rush to build these massive AI data centers, critics have asked i land, water and energy outrage, including protesters taking part in Microsoft’s AI-focused Build software conference in San Francisco this week.
One of the people standing at the entrance to the Fort Mason event center, handing out flyers detailing the results of the data centers being built, was Amy Herman. I talked to him about his concerns.
“I would say it’s a very controversial idea,” he clarified when I asked about the protest. “It’s not that we’re against technology, or any kind of monetization of innovation.”
He said it’s a big challenge to balance limited natural resources with big tech companies that don’t want to be responsible for managing climate change while chasing technological advances.
“What we’re doing to our world and all the impacts that are happening, not just here in San Francisco but across the United States,” Herman said, adding that “the ramifications of that will be felt.”
Protests took place outside the Microsoft Build conference at Fort Mason in San Francisco.
During the Microsoft Build event on Tuesday morning, CEO Satya Nadella said that Microsoft will seek public approval to build data centers in the future.
It aims to gain consent from local residents by improving cooling systems and reducing water consumption by data centers; to ensure that data centers do not increase electricity prices for local people; adding to the “tax base that funds local hospitals, schools, parks and libraries,” and investing in AI training and nonprofits in those areas.
Nadella called the rapid construction of data centers “extraordinary” during a live podcast Tuesday with Sarah Guo and Elad Gil of No Priors and Swyx of Latent Space.
“Right now, it’s clear that … we as an industry are very focused on making sure that the benefits of all the things we’re talking about are felt in a real way at the community level,” Nadella said. “It has to be real, when people say, ‘It doesn’t change electricity prices for me, in fact, if anything, it’s lowering prices because the longer the grid will be better, the more energy there will be… the water is filled.’
He emphasized the importance of getting communities to buy into AI technology and the data centers that run it.
“All this must be real. And if so, we will have permission,” he said. “Otherwise, you won’t have permission; it’s as simple as that.”
He added that Microsoft wants to add jobs during and after the construction of these large data centers — but he said people are right to question everything.
“We have to take it as an industry very seriously,” said Nadella. “I think it’s good for communities to be skeptical, to ask hard questions.”
Some of the people asking those questions were outside Microsoft Build next to Herman, holding colorful posters depicting scenes of corporate greed, pollution and poverty, eager to talk to conference attendees.
Herman said that one of the biggest problems is that electricity prices in rural areas are much higher than before the construction of data centers in those communities, forcing people to choose between paying for health care or their electricity bills.
Microsoft has more than 500 data centers in 80 regions, and the tech giant added more data center capacity in the past 18 months than in the first decade of its Azure cloud services. And they’re not just in the US, but all over the world — Australia, New Zealand, Asia, Africa, the Middle East, Europe and South America.
Nadella explained that the design of the Microsoft data center will change and consume only the amount of water that the restaurant produces in a year.
Speaking during a keynote speech about the Fairwater data center — “our first large AI factory” — Nadella broke down the major workflows of such factories into AI training, indexing and agent runtime.
“The whole system is designed for AI from the ground up,” Nadella said. “And we are rethinking even the delivery of energy … how do we deliver hundreds of kilowatts per line while reducing … the conversion losses that occur from the grid to the silicon?”
Fairwater went live ahead of schedule in April, when Nadella called it “the world’s most powerful AI data center” in a post on social media site X.
He says there was a new way of using water in the cooling system of the Fairwater AI data center, which is filled only once and can run “with no water at all” after that.
“The daily water use over the course of an entire year is roughly equivalent to what a single restaurant would use,” Nadella said on Tuesday.
Some data centers currently under construction “will use more energy than large cities,” according to Harvard Law School’s Ari Peskoe.
Microsoft says Fairwater has “cost-effective, reliable power,” using approximately 140kW per rack, 1,360kW per line, as well as software and hardware solutions to reduce power during off-peak periods and use “an on-site energy storage solution to drive energy flexibility without using excess power.” In comparison, the energy consumption of a US residential utility customer is about 1.2kW.
Data center protesters outside the Build conference brought signs colored like the Windows logo.
During a keynote speech Tuesday morning, Nadella said Microsoft’s new goals for building data centers include making sure they “don’t raise electricity prices, making sure we refill all the water we use, creating jobs in local communities for local residents, adding to the tax base, making sure we strengthen communities by investing in local training and local non-profit organizations.”
“Only if we live by these principles, do hard work with them, that’s when we get permission to continue to innovate and build,” said the CEO.
When I asked Herman about Microsoft’s promises to give back to local communities after asking for permission to build data centers there, he expressed dubious optimism.
“If they are actually invested in this way, I would like to see them develop a way to develop businesses in partnership that includes democratic principles at the core of their operations,” he said. “I have never seen what is done internally as a business, so why would I trust it at the local management level?”
