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The University of Michigan-Flint School of Management and the student Entrepreneurs Society used a townhall format on March 18 to tackle what has become a hot button issue in Michigan and nationwide: increased demand for data centers.
Michael D. Witt, a faculty member in the School of Management, moderated a discussion that included Rep. David Martin, a Republican representing parts of Genesee and Oakland counties; Genesee County Drain Commissioner Jeff Wright; Lindsey McGuirk from Consumers Energy; and Tyler Theile of Anderson Economic Group. Reading material related to data centers is compiled on the Entrepreneurs Society website.
The issue hasn’t bubbled up much in the city of Flint yet, but it has certainly been controversial in some neighboring communities. Data centers themselves aren’t new – the first ones date back to the 1940s. They are essentially secure facilities that house things like servers, networking equipment, data storage systems, and other infrastructure. They’re a necessity for everything from cloud computing services to websites to business applications.
Obviously, as technology has advanced and become an inescapable part of our lives during virtually every waking moment of our days, the need for more data centers, and more complex ones, has steadily and rapidly increased.
There isn’t really much disagreement over the need itself – few people function without at least some connectivity to devices or applications that serve vital roles in our lives. But the recent volume and scale and need for more centers has been hastened by the rapid and often reckless growth of artificial intelligence technology. In short, A.I. requires massive amounts of computing power and storage, so as that technology has expanded so have requests to build new centers.
Controversies and confusion over the environmental impact, water usage, energy costs to consumers, unclear economic value, secretive agreements or non-disclosure pacts with local government officials, and other issues have caused massive friction in some communities. Interestingly, the growing opposition to data centers has also been pretty bipartisan, as has those favoring the developments – Martin, a Republican, is an advocate for them as is Gov. Gretchen Whitmer, a Democrat.
I tend to fall mostly in line with environmentalists who advocate for clean water supplies, good air quality, and renewable energy. But I also understand the economic development needs and implications for elected officials. Like it or not, regardless of party, most elected officials are judged harshest on the perceived impact they have on the economy and jobs. Michigan has a long history as a manufacturing powerhouse, and if that is going to continue, companies who are based here will need access to larger data centers.
But within that scope, there are significant regulations and limitations that communities, legislators, and others can and should put on their development. For someone like me, who is vaguely aware of the issue with a desire to become more informed, I gained some good insights from the panel, but I also found myself frustrated with some of the discussion. Here’s my breakdown on the good and bad that stood out.
The Good: Context, Transparency, and Technical Information
Martin did a good job during the discussion of calling out the overuse of nondisclosure agreements between companies developing data centers and local governments. He rightly suggested that those types of agreements immediately get developments off on the wrong foot and make community members distrustful.
“As elected officials, we need to be able to talk to our constituents,” Martin said, noting that occasionally NDAs are a necessary part of developments if there is proprietary information or national security implications that can’t be disclosed publicly. But he said that he believes NDAs have been overused and unnecessary at times too.
There seems to be a growing understanding of that notion. Microsoft recently announced it is working with local governments to end its existing NDA agreements as a way to rebuild public trust.
I also thought some of the technical details McGuirk shared about energy consumption were enlightening. She also discussed the process Consumers goes through to make sure the grid isn’t stretched beyond its limits when major energy-heavy developments come online and the state and federal regulations they and the developers have to follow.
Theile, a supporter of data center developments, also expressed some support for some level of rigor when it comes to regulations because Michigan has “precious natural resources.”
The Lacking: No Thought Diversity and Economic Models That Don’t Make Sense
Here’s where the discussion got frustrating for me: I think every person on the panel could be described as a supporter of building more data centers. Wright noted that he doesn’t really have an opinion one way or the other on them, but he certainly wasn’t against the developments.
A business department of a college put on the event, so the clear pro-business slant wasn’t a surprise. But there are dissenting voices, environmentalists, and others who have insight on the issue – there’s even a University of Michigan faculty member who has spoken out repeatedly about his belief that the state is moving too quickly on data center development. That perspective would’ve been informative too.
Even the questions from the audience that were selected could mostly be described as supportive of data centers. Too many were submitted to all receive answers, but Witt called on fellow UM-Flint faculty members, a former Republican state senator, and a Chamber of Commerce representative to ask questions. The Q and A portion could’ve been an opportunity to even out the discussion, since the panel included only individuals who are supportive of data center expansion. Instead, it just reinforced that only one type of viewpoint was worth considering.
The economic impact portion in Theile’s presentation also didn’t resonate with me. A criticism about data center developments nationwide is that the job creation claims are dubious. Theile did outline well that the centers create construction jobs, and Martin’s assertion that even if the centers themselves don’t have large numbers of employees, they are needed by large automotive companies and manufacturers, healthcare facilities, tech companies, and other organizations that do employ large amounts of residents. I also do understand that the facilities bring in state and local tax revenue that benefits communities.
Those are parts of the equation that make sense and I understand, but the areas that fall flat for me are the projected economic impact through jobs allegedly created in other industries. It was reminiscent of professional sports owners who want taxpayer money to build stadiums, while touting potential economic benefits that never really materialize the way they’re supposed to (ask some Detroiters how they feel about District Detroit promises, for example). And, lo and behold, one of Theile’s slides even used pro sports analogies in her economic impact projections.
As someone trying to learn more about the issue, I’m much more interested in specific community success stories than projected numbers. Where are data centers that people love having in their communities? Where are data centers that have successfully employed a lot of people, or created jobs, been good corporate citizens or environmental stewards, or provided undeniable economic benefits? Hearing or seeing results directly from people on the ground is a lot more compelling than lofty numbers that don’t sound real.
Leaving A.I. Out of the Discussion Was a Big Oversight
I think the elephant in the room that wasn’t addressed is that opposition to data centers expanding is, in some cases, opposition to the expansion of artificial intelligence. Other than Martin mentioning in his comments that A.I. is “sometimes scary,” there wasn’t any wrestling with the fact that it’s not necessarily the data centers themselves, it’s A.I., that people are resistant to.
The technology could hasten further automation and losses of jobs. It has already caused the proliferation of deepfakes and there are very real and scary implications for how it spreads sexually exploitative material. There are ethical and cultural concerns for what it will do to artists, musicians, writers, and other creators. Elon Musk made one that decided to be super racist.
Convincing people that data centers are necessary to support technological advancements isn’t actually that difficult. Convincing people that expansion of A.I. is a public good rather than a serious societal harm is a much more difficult undertaking, and I don’t really think you can have the conversation about data centers without also having the conversation about the many new dangers and lack of regulation of A.I. as an industry.
A Word on Dismissiveness
Here’s the part that really lost me: near the end of the discussion, Witt posed a question: “How are we gonna convince young people this is a good idea?” Martin sort of derisively referenced people getting “TikTok” information, Wright suggested that young people should be asked if they’re willing to give up their phones/devices in order to prevent more data centers, and, in her closing statement, Theile suggested that opposition to data centers often relies on unsourced information.
Here’s one idea: if you care about young people buying in on whatever it is you’re trying to accomplish, being mocking or dismissive in how you talk about them is probably a poor start.
Further, the generation of people most likely to share misinformation or misleading sources are people 55 and older, according to research from the University of Colorado, so portraying relying on poor sources as some sort of a young person problem isn’t exactly fair considering we all surely have encountered an older family member who can’t stop sharing the worst A.I. slop on Facebook as if it’s news.
And why wouldn’t young people be concerned about this issue? They’re going to inherit whatever the long-term ramifications are, along with all of the other environmental problems we’ve created in the name of the “free market.”
The tone of those comments about young people, and the need to convince them, was also particularly galling in a room that actually did have a few community members who passed out information in opposition to data centers. They, and many other everyday people who are concerned about this issue, are around my age (I’m 45) or even older – I’ve seen footage from municipal meetings in Michigan with several senior citizens passionately speaking out against the developments. To frame this as some sort of youth-driven opposition is simply not true – skepticism around data centers includes people from all walks of life.
In Flint, we are living proof of what can happen when the government makes rash decisions without thinking about potential long-term negative outcomes. Residents are still, and will continue to, deal with the fallout of reckless governmental actions taken during the water crisis. We’re also still dealing with bending to the will of industry. The city is full of vacant GM and other manufacturing properties that have caused serious environmental and economic damage over multiple generations now. Those properties have released contaminants into the community, are difficult to redevelop, and are eyesores.
I appreciated the overall intent of the event, and the encouragement for people to read more sources. In that regard, I found these two pieces by Brookings helpful:
- Turning the data center boom into long-term, local prosperity
- Why community benefit agreements are necessary for data centers
I hope UM-Flint will consider revisiting the discussion in similar formats in the future, as the issue evolves. It’s valuable. I also hope they’ll consider a panel with more balance, and one more willing to engage with questions that differ from the sole viewpoint being expressed by the panel.
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