To house the world’s computing power, governments have begun competing to build such facilities, raising the question of who benefits and who pays the price.
For years, it was easy to disregard data centres, which were seen as plain buildings with fully equipped servers, secluded in industrial zones. However, with artificial intelligence, cloud services, and streaming, their role has shifted from tech machines to powerhouses, a transition that is not easy for a country to achieve and requires planning and infrastructure.
The situation demands scrutiny rather than applause. The government’s narrative of investment, job opportunities, and digital independence does not align with the stories told by nearby communities, who describe problems with the power and water systems.
Infrastructure by Another Name
A large data centre requires many things to run smoothly and efficiently: a large, uninterrupted supply of electricity, a cooling system and water for the machines operating inside the data centre, a nearby substation, and high-speed fibre connections. Investors also require regular regulatory certainty, meaning they have confidence that spending millions will not result in unfavourable changes to rules, data, or taxes.
Every item on this list depends on public infrastructure. Grid stations take years to set up, and the water used by locals in their homes and on their farms is shared with these data centres. Land use is under the council’s control. This indicates that one facility can influence a region’s energy planning, making data centres significant projects in national infrastructure plans.
The International Energy Agency (IEA) reports that data centres used an estimated 1.5 per cent of electricity in 2024, a figure expected to double by 2030 due to the growth of AI. A single large AI campus can consume as much power as 1000 homes. This may be globally insignificant, but locally it is significant on a large scale. In Ireland, for example, data centres consumed 23 per cent of metered electricity in 2026, up from five per cent in 2015.
Why Governments Compete
Economic Strategy: governments must invest in computing power for finance, logistics, healthcare, defence and research. A country that lacks the capacity to build such power itself has to rent it from others on their terms. Earlier generations used to talk about energy security; officials do the same, but now they talk about ‘sovereign computing’.
Data rules: if governments require certain data not to leave the country, this turns local capacity into a legal necessity, not merely a commercial one.
Prestige: a headline may help a multi-billion dollar campus signal to the world that the country is ready to operate.
This race certainly comes at a high price. To win a project, a government may need to offer tax relief, low-cost land, swift permit approvals and an approved power supply. A company usually gains leverage when several bids are placed on the same project, resulting in public funds being used to build a private facility.
What communities gain and give up
The benefits are there, but they are hardly advertised. Construction work provides temporary employment and stimulates local spending. Depending on the deal, property taxes may also be held in value. One weakness of this arrangement is the lack of permanent jobs. Once the data centre is built, it may require several dozen employees, though this number can vary from facility to facility. This makes it difficult to justify large subsidies on the basis of jobs alone, meaning the burden falls on electricity, water, land, noise, and secrecy.
The Environmental Cost
As the digital economy emerges, its footprint is also growing rapidly. Data centres require more energy resources, and the IEA expects renewables and natural gas to meet this demand. Gas now plays an important role as well. While companies manage their renewable energy purchases, servers operate continuously throughout the day, whereas wind and solar power do not. This means that the clean power purchased and the clean power actually used are not the same. At each facility, efficiency is increasing, but demand continues to surpass supply. People often increase their use of computing when it becomes cheaper.
Some regions have shown resistance. In 2019, Amsterdam suspended the construction of data centres but lifted the ban a year later. Singapore did the same from 2019 to 2022, but then reopened after introducing stricter conditions. Ireland effectively banned new grid connections for years, then lifted the ban in 2025 after introducing tougher conditions. Such bans resulted from failing to plan before building the centres, and they offered a lesson.
Questions Worth Asking
It has now become clear that data centres will not shut down, as modern life has come to rely on them. However, it is worth highlighting that they should not be treated as an unqualified prize. Before approving any future projects, we should ask: who will pay for the water and electricity, and who will be prioritised if supplies fall short? What real jobs and tax revenue will be generated after the incentive has expired? Will additional energy or water supplies be required?
These data centres may be part of a national or international project, but they use real water and energy, and occupy real land. Ultimately, the people pay the price, and most of the time it is the local population.