As I understand, data centers from hyperscalers (Microsoft, Google, Amazon, Apple, Meta, Oracle, IBM, Alibaba, etc.) don't create many long-term jobs. Mostly they create short term jobs in the construction industry. Data centers from non-hyperscalers, like Equinix, probably create more long-term jobs because companies rent space, then need (near constant) changes to their hardware that requires "remote hands". I think hyperscalers mostly install monolithic hardware that requires almost no regular changes, except for break-fix.
Having worked in a hyper scaler on a system to orchestrate hw breakfix, it requires a lot of hands.
We replaced thousands of hard drives alone per day...
And racks are constantly coming and going. Hyperscaler DCs are busy places.
I really don’t understand why data centers get such special treatment.
Somewhere gives Google etc a tax break for a data center. In exchange Google destroys a huge swath of land, Hoovers up electricity and water, and provides some temporary construction jobs.
In exchange the local residents get nothing… at least if it was a power plant or something they could get some cheaper electricity. Maybe they get slightly better internet connectivity? But from what I’ve read this doesn’t really seem to be the case.
> A firm announces a plan to build a new facility, but where? Local and state development officials compete to attract the firm with ever-more-generous tax breaks and subsidies. This scene plays out again and again – even though research shows that incentives do not substantially influence firm behavior, even in the face of media exposes about wasteful giveaways. Why? Governments hope to encourage jobs and business profits, and hubris leads officials to believe “this time will be different,” even if incentives have not worked before.
> But something more pervasive is also at work. My research with Stephen Ellis demonstrates the role of “business climate” in driving economic development professionals and government officials to engage in an incentives arms race. Officials feel they must offer incentives, because failing to compete to attract businesses will be interpreted as evidence that their locality is not business-friendly. States and localities will therefore continue to compete, to the point of giving away more than the value of the new firm or facility. Can American citizens find ways to prevent the negative effects of this no-win arms race?
> Officials feel they must offer incentives, because failing to compete to attract businesses will be interpreted as evidence that their locality is not business-friendly.
I guess this is the crux but who really wants a data center? It’s a big flashy number but what does it really do for the community at the end of the day?
Because cities felt the devastating effects when industrial factories staffed with good union jobs went away, and yearn for their carbon copy replacement. These factories had ripple regional advantage effects beyond the factory workers. Armies of teamsters have to drive in and out of town to deliver inputs and outputs for industrial factories, and they all need to eat. Corporate and R&D types used to need to spend more time at the industrial factory. Put a factory in a region and a corporate office often follows. Put enough of them in the same region and you start to get an innovation hub as they all hang out and see each other at third spaces. Universities and innovation hubs mutually benefit and expand when distance matters.
So the industrial factory tax break model often did pay off. Data centers are selling the same story: give us tax breaks for big expensive capital investment and regional prosperity is yours. They often lie about even the direct number of jobs. But the implied regional advantage is definitely dead when it is all cloud and zoom, rather than widgets and happy hours.
Yeah, something like that happened nearby. They set up this bike repair store near my place and started repairing bikes. No one asked me if I even wanted this store nearby. I've been living here for like a decade and they gave me nothing. They offered to repair my bike for a fee, but I can already do that at home for free. We should ban businesses if they won't pay everyone within the vicinity the fee they demand.
I think there was some kind of corruption as to how they get to just repair bikes without giving me anything. I've been a local for way longer than these people.
EDIT: And yes, they do get government money. SF has a city program to encourage local businesses or something so they get grants. Besides all businesses are eligible for SBA loans and no one asked me if they should be.
A bike shop or other small retail business brings jobs and benefits to the local community. A data center brings pollution and practically no new permenant jobs or benefits specifically to that community, only to the cloud.
But don't worry about it, this is something an $850/hr consultant is paid to not understand.
The same thing happened here in NZ with AWS. The job creation stories is almost always bullshit.
Down here in NZ the govt subsidizes an aluminium smelter which uses 13% of the national electricity just to provide 3,000 jobs. In the media headlines 3,000 jobs seems quite measurable and impactful compared to many customers overpaying for electricity by an mysterious undetermined amount. It's obvious which way the politicians are going to lean.
It looks like a maximum security prison so the locals cannot revolt against "AI".
Of course no jobs are created. The data centers are there for cheaper energy, laxer environmental regulations and for the ability to process U.S. citizens' data and build files on them where it would be illegal to do that on U.S. soil.
So these companies receive subsidies like in the U.S. How does the government shutdown affect these subsidies in the U.S.? Are SNAP benefits for corporations being halted as well or does it only affect poor people?
As I understand, data centers from hyperscalers (Microsoft, Google, Amazon, Apple, Meta, Oracle, IBM, Alibaba, etc.) don't create many long-term jobs. Mostly they create short term jobs in the construction industry. Data centers from non-hyperscalers, like Equinix, probably create more long-term jobs because companies rent space, then need (near constant) changes to their hardware that requires "remote hands". I think hyperscalers mostly install monolithic hardware that requires almost no regular changes, except for break-fix.
Having worked in a hyper scaler on a system to orchestrate hw breakfix, it requires a lot of hands. We replaced thousands of hard drives alone per day... And racks are constantly coming and going. Hyperscaler DCs are busy places.
I really don’t understand why data centers get such special treatment.
Somewhere gives Google etc a tax break for a data center. In exchange Google destroys a huge swath of land, Hoovers up electricity and water, and provides some temporary construction jobs.
In exchange the local residents get nothing… at least if it was a power plant or something they could get some cheaper electricity. Maybe they get slightly better internet connectivity? But from what I’ve read this doesn’t really seem to be the case.
https://scholars.org/contribution/how-competition-attract-bu...
> A firm announces a plan to build a new facility, but where? Local and state development officials compete to attract the firm with ever-more-generous tax breaks and subsidies. This scene plays out again and again – even though research shows that incentives do not substantially influence firm behavior, even in the face of media exposes about wasteful giveaways. Why? Governments hope to encourage jobs and business profits, and hubris leads officials to believe “this time will be different,” even if incentives have not worked before.
> But something more pervasive is also at work. My research with Stephen Ellis demonstrates the role of “business climate” in driving economic development professionals and government officials to engage in an incentives arms race. Officials feel they must offer incentives, because failing to compete to attract businesses will be interpreted as evidence that their locality is not business-friendly. States and localities will therefore continue to compete, to the point of giving away more than the value of the new firm or facility. Can American citizens find ways to prevent the negative effects of this no-win arms race?
> Officials feel they must offer incentives, because failing to compete to attract businesses will be interpreted as evidence that their locality is not business-friendly.
I guess this is the crux but who really wants a data center? It’s a big flashy number but what does it really do for the community at the end of the day?
The obvious conclusion to me is that corruption is involved
Agreed. Difficult to prove but it's the obvious explanation.
Because cities felt the devastating effects when industrial factories staffed with good union jobs went away, and yearn for their carbon copy replacement. These factories had ripple regional advantage effects beyond the factory workers. Armies of teamsters have to drive in and out of town to deliver inputs and outputs for industrial factories, and they all need to eat. Corporate and R&D types used to need to spend more time at the industrial factory. Put a factory in a region and a corporate office often follows. Put enough of them in the same region and you start to get an innovation hub as they all hang out and see each other at third spaces. Universities and innovation hubs mutually benefit and expand when distance matters.
So the industrial factory tax break model often did pay off. Data centers are selling the same story: give us tax breaks for big expensive capital investment and regional prosperity is yours. They often lie about even the direct number of jobs. But the implied regional advantage is definitely dead when it is all cloud and zoom, rather than widgets and happy hours.
> In exchange the local residents get nothing
Isn't that the case for a lot of these corporate welfare programs?
I think so yeah. They generally seem to be pretty disingenuous. Which is a shame because these corps have more than enough resources.
Yeah, something like that happened nearby. They set up this bike repair store near my place and started repairing bikes. No one asked me if I even wanted this store nearby. I've been living here for like a decade and they gave me nothing. They offered to repair my bike for a fee, but I can already do that at home for free. We should ban businesses if they won't pay everyone within the vicinity the fee they demand.
I think there was some kind of corruption as to how they get to just repair bikes without giving me anything. I've been a local for way longer than these people.
EDIT: And yes, they do get government money. SF has a city program to encourage local businesses or something so they get grants. Besides all businesses are eligible for SBA loans and no one asked me if they should be.
Okay. Did the bike shop get a tax break to be set up? If not then your ironic analogy has failed.
O wow I didn’t realize bike repair shops were 1M+ sq ft!
You could fit every bike in your city in there lol.
A bike shop or other small retail business brings jobs and benefits to the local community. A data center brings pollution and practically no new permenant jobs or benefits specifically to that community, only to the cloud.
But don't worry about it, this is something an $850/hr consultant is paid to not understand.
The same thing happened here in NZ with AWS. The job creation stories is almost always bullshit. Down here in NZ the govt subsidizes an aluminium smelter which uses 13% of the national electricity just to provide 3,000 jobs. In the media headlines 3,000 jobs seems quite measurable and impactful compared to many customers overpaying for electricity by an mysterious undetermined amount. It's obvious which way the politicians are going to lean.
It looks like a maximum security prison so the locals cannot revolt against "AI".
Of course no jobs are created. The data centers are there for cheaper energy, laxer environmental regulations and for the ability to process U.S. citizens' data and build files on them where it would be illegal to do that on U.S. soil.
So these companies receive subsidies like in the U.S. How does the government shutdown affect these subsidies in the U.S.? Are SNAP benefits for corporations being halted as well or does it only affect poor people?