The Land of Giants: Engines of Progress, or Too Steep a Price?

North Carolina has long been known for its natural beauty and the sounds that come with it: wind moving through Appalachian oaks, the rhythmic crash of Atlantic surf on the Outer Banks, quiet sun-draped mornings in the Blue Ridge Mountains. Today, those sounds have company. A distinct, modern addition is rising across the landscape: the hum of giants, in the form of data centers.

Every photo you back up to the cloud, every question a chatbot answers in seconds and every artificial intelligence (AI) tool we've covered in this newsletter runs inside one of these massive buildings. The largest can draw as much electricity as a small city, and a typical one uses about 300,000 gallons of water a day.

In Issue #2, we noted that electricity costs were rising near data centers. Last week, we looked at how Europe regulates AI. This week, we go to the ground, where these giants are being built, to see what they cost the communities around them and what they give back. As always, you decide whether the trade is worth it.

A data center is a building full of computers, called servers, that store information and run the online services we use every day on our smartphones, laptops, game consoles and other devices. The servers run around the clock and give off heat, which is removed with fans, chilled water or other cooling systems.

The newest centers are massive. Virginia's legislative audit commission found that even a small 18-megawatt data center uses about as much power as 4,500 homes, and the largest new centers draw from 100 to more than 200 megawatts. Worldwide, a large data center can use as much electricity as 100,000 households, according to the International Energy Agency (IEA).

AI is why they're multiplying. Global data center electricity use grew 17% in 2025, and use at data centers focused on AI grew 50%, the IEA reported in April 2026.

Power. Worldwide, data centers account for just over 1% of electricity demand and about 0.5% of carbon dioxide emissions. That share is small but climbing fast: the IEA projects data center electricity use will roughly double by 2030, to about 3% of global demand. In the United States, data centers used about 4.4% of electricity in 2023 and could use between 6.7% and 12% by 2028, according to Lawrence Berkeley National Laboratory.

Water. Many data centers cool their servers by evaporating water. A typical one uses about 300,000 gallons a day, roughly what 1,000 households use, and a large one can use up to 5 million. Nationally, that's still a small slice: all US data centers combined used about 0.14% of the country's water in 2021. The pressure is local. Loudoun County, Virginia, the world's largest data center hub, used about 1 billion gallons of mostly drinkable water for data centers in 2023, and a data center on a public water system could contribute to restrictions for residents during a drought. Design matters, too: a fully air-cooled data center uses almost no water.

Heat. An early study led by the University of Cambridge found that the ground around some AI data centers got about 3.6°F warmer on average after they opened, and up to 16°F warmer in extreme cases. Treat that carefully: the study hasn't been peer-reviewed, it measured ground temperature rather than the air people feel, and some researchers say new buildings replacing open land explain much of the change.

Noise and air. Neighbors' most common complaint isn't volume but constancy: the hum of cooling equipment that never stops. Backup diesel generators add to it, and to air pollution. Regulators recently approved more than 600 diesel generators for an Amazon data center campus in Richmond County, North Carolina. A study by researchers at the University of California, Riverside (UC Riverside) and Caltech estimated that air pollution tied to data centers, from both the power plants serving them and their backup generators, could cause about 1,300 premature deaths a year in the US by 2030. That's an estimate, with a range of 940 to 1,590.

The clearest cost shows up on power bills. PJM, the grid operator serving 13 states and Washington, D.C., runs auctions to secure enough power plant capacity for future years. Its independent market monitor found that data center demand raised costs for other customers by more than $23 billion across three of those auctions. One 2025 auction alone was expected to raise household bills across the region by 1.5% to 5% starting in June 2026.

It doesn't have to work that way. A Virginia study found that current rates appropriately charge data centers for the costs they cause, but warned that meeting unchecked demand could raise a typical Dominion Energy home bill by $14 to $37 a month by 2040. Some states are acting early: Ohio regulators approved a rule requiring large new data centers to pay for at least 85% of the power they reserve, even if they use less.

Taxes. Data centers hold expensive equipment, which can mean significant local tax revenue. In five mature Virginia communities, data centers supplied anywhere from under 1% to 31% of total local revenue. But states often give some of that back: Virginia's sales tax break saved the industry $928 million in a single year, and the state recovers only about 48 cents for every dollar it gives up.

Jobs. The jobs pay well, about $100,000 a year on average in Virginia. But there aren't many once construction ends: a typical facility employs about 50 workers, and roughly 80% of the jobs data centers support there are construction jobs.

Clean energy. Amazon, Meta, Google and Microsoft accounted for nearly half of all corporate clean power deals worldwide in 2025, according to BloombergNEF. In the Carolinas, Duke Energy signed agreements with Amazon, Google and Microsoft to develop rate plans that help pay for new clean energy there.

Heat for homes. In Odense, Denmark, waste heat from a Meta data center helps warm the equivalent of about 11,000 households. It works because the city already had a heating network that pipes hot water to homes, which most American towns don't have.

The hardest part of this story isn't any single number. It's that the benefits and the costs often land on different people. Tax revenue and jobs mostly stay in the town that hosts a data center. Higher power bills can spread across an entire grid region, and air pollution doesn't stop at county lines: the UC Riverside and Caltech researchers found that backup generators in Northern Virginia affect air quality in neighboring states. That's why these five questions matter:

The choices communities make now will last decades. Virginia's projections for household bills already run to 2040, and the power plants and transmission lines built for data centers today will still be operating when today's children are paying their own bills. Whether those plants burn gas or run on clean energy will shape the air those children breathe. The IEA expects renewables and natural gas to supply most of the new power data centers need, so the mix is still being decided, often in local hearings most people never hear about.

Hyperscale data center. A very large data center campus, typically built and run by the biggest tech companies, such as Amazon, Google, Microsoft and Meta.

Megawatt (MW). A unit of electric power. In Virginia's estimate, a small 18-megawatt data center uses about as much power as 4,500 homes.

Capacity market. An auction where a grid operator pays power plants to be available in future years. When demand jumps, prices rise, and those costs flow into household bills.

Ratepayer. Anyone who pays a utility bill, including you.

Waste heat recovery. Capturing the heat that servers give off and using it to warm buildings or water instead of releasing it into the air.

Worth noticing: a data center can be small on the national map and huge in its own neighborhood. Both can be true at once.

Keep this one. This week's Make It Make Sense card puts five terms and the five questions every community should ask on one page you can save, print or share.

Data centers power the tools many of us now use on a daily basis. If one were proposed in your city or town, what would it need to give back for the trade to feel fair? And who should get a say?

Engines of progress, or too steep a price? Reply and tell us.

POLL: Would you support a data center being built in your community?
→ Yes / Only with conditions / No / Not sure

Next time: When an algorithm turns down your loan, your apartment or your insurance claim, what are you owed?

Sourcing: the International Energy Agency, Lawrence Berkeley National Laboratory, Virginia's Joint Legislative Audit and Review Commission, PJM's independent market monitor, the Environmental and Energy Study Institute, BloombergNEF, UC Riverside, the University of Cambridge and local news reports. Contested claims and early studies are noted. Disclosure: Anthropic, which depends on data centers to run its AI models, makes the AI tool used to help research this newsletter.

— Ezekiel Sage, Editor-in-Chief

THE CLOUDED TRUTH — no jargon, no hype, no panic