Why on Earth are so many data centers being built?

Data centers are proliferating nationally — over 2,000 planned or under construction, nearly 1,300 already operating — at construction costs often exceeding $1 billion apiece, with servers and AI chips adding billions more; a single approved Michigan facility for DTE is estimated at $7 billion. Operating costs run around $120 million a year for a typical 100-megawatt facility, mostly electricity, while permanent staffing costs are a comparatively tiny $5-10 million annually.

The piece argues that despite widespread coverage of environmental costs, water use, noise, and rising utility bills, almost nobody has asked what products or services these facilities will actually sell to justify the spending. Searching for an answer reportedly turns up only vague terms like cloud computing and edge services rather than concrete revenue models.

The author notes competition among Amazon, Google, and Microsoft as one explanation, alongside circular financing between the tech giants and comparisons to speculative bubbles, and flags that some capacity may serve AI surveillance ambitions from companies like Palantir rather than pure economic return. Congressional moratorium proposals from Sanders and Ocasio-Cortez are mentioned as one response already underway.

The full dispatch is available from the source below.