Data Center' Sweet Talk Aims to Con You

A quick lesson on how the electric grid works: At all times, 24/7, the amount of electricity used must equal the amount of electricity produced. Too little supply results in brownouts and blackouts. Too much supply results in blown transformers and other line issues, unless the excess is being stored - which falls under usage. It’s a physical supply and demand that’s easy to see via wind turbines that aren’t turning even when it’s windy.

In addition, electric generation capacity is only so large based on existing infrastructure. If there is more demand than infrastructure can put out, prices will need to increase with the goal of reducing usage in order to avoid the aforementioned brownouts and blackouts.

That was an over-simplification, but a good starting point for this blog.

With public backlash against data centers occurring, often due to local electricity prices doubling for nearby residents, Microsoft announced what it calls a “community-first” approach to AI Infrastructure. Microsoft promised to take the “steps needed to be a good neighbor in the communities where we build, own, and operate our data centers.” According to the company, its plans to “pay its own way” to ensure that local electricity bills don’t go through the roof in the places where it builds.

The company says it will work with local utility companies to ensure that the rates it pays cover its full share of its burden on the local grid. “We will work closely with utility companies that set electricity prices and state commissions that approve these prices… Our goal is straightforward: to ensure that the electricity cost of serving our data centers is not passed on to residential customers.”

That’s all nice and wonderful as a statement aimed at making nearby residents feel more comfortable about having an obnoxious data center in their neighborhood. The problem is… it’s an economical lie. As long as data centers continue to be built, creating more electricity demand, there will be more pressure on the grid. The economic rule of supply and demand will not change.

Microsoft, as well as all other AI wannabees, could pay 10x the rate that residents do per watts used, but it won’t cut demand on the grid. In fact, it could even increase demand further should Microsoft crazily offer to pay everyone’s rate increases. As a consumer, you’re not going to cut your usage if costs don’t increase. Neither will Microsoft.

Water usage by data centers is another contentious topic, with data centers often creating substantial issues for local water supplies. While water output and consumption isn’t as technical as that of electricity, it still falls under the same supply and demand equation. Too much demand puts pressure on the ability to supply it. Demand is usually only cut when prices go up to deter its usage.

Microsoft has already given up on some data centers due to backlash. Good! Let’s keep the backlash train rolling against all data centers. Any authority figure who votes for these should be shunned and ostracized into oblivion… and that’s me being nice.

Source used: TechCrunch