AI data centers explained: Pros, cons, costs and impacts

A building full of computers isn't a major job creator, as servers may need only a few people each to operate them. Constructing the facility is where the biggest boost in jobs comes from, involving hundreds to as many as 1,000 on-site workers.

The AI boom has pushed up demand for project managers, electricians, HVAC technicians, pipefitters and welders. Wages in the industry have skyrocketed in tandem, per The Wall Street Journal.

Once construction crews complete the project and a data center is up and running, it needs very few people. Hyperscale facilities generally employ somewhere between a dozen and a few hundred workers internally. A 2026 analysis in Virginia, home to more data centers than any other state, found they create one permanent job per $13 million invested. Across all other sectors, the figure is one job per $137,000.

“Initially, there is job growth,” said Robert Gordon, senior strategic leader for AI and digital innovation at DSS Inc., during MidwestCon.  “That job growth usually isn’t sustained. There may be thousands of jobs that come in initially, but to run a data center requires far less people.”

That gap splits opinion. Construction and skilled trades workers see immediate benefits. Many others see much less in return.

AI is increasingly central to the economy, global security and even social life. The U.S. and other countries treat AI leadership and continued investment as essential to staying relevant on the world stage.

The Center for Strategic and International Studies, a nonpartisan research organization, says that “as AI becomes a strategic technology, expanding secure supportive domestic infrastructure is increasingly a prerequisite for U.S. technological leadership, economic competitiveness and national security.” Its report continues, “The global race for AI leadership is, in many respects, a competition to build and sustain the infrastructure that sustains innovation.”

Put simply, a country's computing capacity largely determines how well it can innovate in the years ahead. The U.S. has by far the world's largest computing capacity and level of investment, but China, Japan, European countries and states along the Persian Gulf are racing to catch up, and in many cases winning on energy infrastructure and public support.

Gordon mentioned how experts argue that AI data centers will be an inevitable piece of the future. “We do need these data centers across the country to be able to power up the kind of artificial intelligence that we will be using, and that our communities will be using as well,” he said.

Hyperscale data centers consume enormous amounts of electricity, and their rapid growth is straining both the power grid and household budgets. A June 2026 report by the Lawrence Berkeley National Laboratory found that data centers across the U.S. used a combined 192 terawatt-hours of electricity in 2024, or 4.7% of the nation's overall consumption.

The grid hasn't grown at the same pace, putting heavy pressure on the American energy infrastructure. Consumers are feeling it. A 2026 report by the Natural Resources Defense Council estimates that the spread of data centers over the next few years could make the average Ohio household pay $70 more per month on their energy bills.

The backlash has been intense, and it's pressuring lawmakers and tech companies to find a fix. Many Americans believe data centers and the companies that run them are driving up electricity rates while providing few jobs. U.S. President Donald Trump said in August that AI data centers “could use a little public relations help,” and plenty of Americans seem to agree.

“Who bears the cost?” asked Manimala Kumar, senior technical program manager at Nvidia, during a MidwestCon panel session. “Is it the community? Is it the ratepayer? My stance will be to make it balanced. ‘Hey data center company: You want some benefits, you also have to bear the risk of the business.’”

Lawmakers across much of the country are still scrambling to keep up with data centers, but some places have come out well ahead. Loudoun County, Virginia, which holds the world's largest concentration of data centers, has put measures in place to make sure residents benefit.

According to The New York Times, Loudoun expects to collect $1.3 billion in property tax revenue from data centers in 2027, about 40% its entire budget. Over the past decade, that money helped the county cut homeowners' property taxes by 30%, which offsets some of the potential rise in energy rates.

“There can be a great tax benefit for communities as well when data centers do come in,” Gordon stated. Tax credits and breaks have reduced or eliminated that gain in many locations, however.

States such as Georgia, Ohio, Texas and Virginia initially offered tech firms generous tax breaks to open in their states, costing them billions in revenue. Many are now rethinking those incentives or pulling them entirely as they look for better deals for residents.

Meanwhile, the energy sector is gaining from the boom. S&P Global forecasts that U.S. utilities will invest $1.3 trillion in capital projects over the next five years. The firm says, “U.S. electric and gas utilities are significantly ramping up planned infrastructure investments for the 2026-2030 period, driven by a forecast surge in energy demand from the rapid expansion of data centers.” That investment could help keep America competitive for decades.

Hyperscale data centers use enormous amounts of resources and can cause serious pollution when poorly managed. A few examples:

• Data centers could account for 11.8% of America's total electricity usage by 2030
• As of 2023, data centers consumed 66 billion liters of water per year, approximately equal to the indoor water use of all people living in Wyoming
• The GW Ranch hyperscale data center, under construction in West Texas, has been permitted by the state to emit up to 33 million metric tons of carbon dioxide per year, equivalent to the CO2 emissions of over 7 million cars or 4 million homes
• The constant hum of industrial-grade HVAC systems and generators often creates significant noise pollution in formerly quiet, rural areas

“What happens when a data center is [present] there?” Kumar asked. “There is a power consequence, there is a water consequence, because data centers consume these resources. To run the data center we need power, and to cool the data center water comes into the picture. There are environmental consequences.”

The potential harm to the environment and to people who live nearby is considerable. Many states are tightening standards for energy use, water consumption and air pollution, while the federal government remains largely on the sidelines, at least for now.