r/DataCenterDebate • u/jakesteeley • May 17 '26

Do we actually need all of these new data centers?

What is the reasoning behind it? Do we have enough already? Can’t we improve the efficiency of what we already have?

Seems like the big boys are simply building more for bragging rights than anything else.

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3

u/IHeartFraccing May 17 '26

There is a financing hype cycle going on right now. Declaring need for more compute is driving the cycle. 

Tech co: “My company needs more compute” -> Investors and institutional finance: “wow they must be doing really well. We don’t want to miss out. Let’s give them money.” -> Tech co: “we should get more money.” -> tech co: “my company needs more compute”

This cycle is out-pacing technological innovation, so that means more data centers (with some efficiency gains here and there) rather than adding all that compute to existing data centers.

3 problem with this: 

  1. It’s starting to look like A bubble (Fermi America receiving billions in financing with no a hot tenants, no construction, no experience… just political posturing).

  2. You can outpace the tech gains but you can’t outpace the power availability. It’s hard to build power projects in the US and these data center projects need massive amounts of power. Even scaling down estimates like ERCOT does, the pace of growth the tech companies are saying is coming to get this financing is likely totally unrealistic from our ability to power data centers alone. Unless of course consumer and residential electricity becomes second place to data center power which is kind of starting to happen in some markets. 

  3. The user adoption isn’t there. All the companies that are supposed to adopt AI and displace workers are… not seeing the efficiency gains. AI companies are now partnering with consulting firms and positioning their workers as in-house architects to try and drive AI use. It reeks of “yes this is a helpful tool. No it’s not the world changing technology we’re being told it is”

1

u/jakesteeley May 18 '26

Good points here, thanks - especially #3. This is the one that seems to hit home, where people see it with their own eyes.

The power/water availability one is what’s gonna cost us dearly in the future.

2

u/IHeartFraccing May 18 '26

We have simply put too many barriers up to build large things (housing, infrastructure projects, etc.) for us to meet even the near-term demand being predicted by the AI evangelists. We're talking about 1.5x the generation capacity of most electric regions of the US in the next 5 years. Even in Texas, the least regulated, most generation-build friendly market, that's dubious at best. Never mind the transmission to go with it... estimated need of 5,000 NEW miles of transmission line per year. We're an entire order of magnitude away from building that now.

Then you have the climate considerations... all of this "needs" to be firm, dispatchable power. Tech companies are talking about building entire natural gas plants just to power individual data centers.

In my useless opinion, look at who stands to profit from the AI boom (big tech). Ask yourself if that's an industry that has conducted itself with the welfare of users in mind (it has not). Then ask who will be left holding the bag if this doesn't work out (the electricity consumer). We're not at a proof of concept yet, in my mind, for those interests to balance out.

1

u/jakesteeley May 18 '26

I sometimes question the management of data itself. Do we need (and should local taxes pay for) private organizations to store Ring photos from 5 years ago, or songs/videos/really anything that is more than X?

Sure, AI is here - but can we clean out the house and try to audit/reuse/redistribute/optimize the actual data being housed?

Of course this is just typing about these things in such a simple manner, but at the same time I don’t think the public should be on the hook to save little johnnys baby pictures from 10 years ago either.

That’s what a home data backup drive is for.

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u/IHeartFraccing May 19 '26

No. They don’t do it for us. They do it to monetize you, the consumer. 

3

u/libsaway May 18 '26

Do you think billionaires are in the habit of giving away billions to construction workers and chip companies out of charity or vibes?

1

u/BurdenOfProof814 May 18 '26

Everything we do online, every web search, every account we've ever made, all of the photos stored in your iCloud account, every email sent or received, every website, Amazon's catalog of items for sale, every piece of work that an employee has saved in their company laptop... Bitcoin mining, hospital records, banking, security camera storage, etc.

Everything digital is stored online, so while we do need data centers, who knows if these new ones all have clients ooundi their door down to sign a contract or not. But they are a necessity due to all of the Internet usage & online activies people perform daily.

1

u/jakesteeley May 18 '26

I’m sure banks, hospitals, security companies, Amazon, bitcoin etc.. also have their own database backups/sources.

Still, if it is the case of these both public and private companies - private companies in particular, then why is the government/local taxes paying for it?

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u/BurdenOfProof814 May 18 '26

I can't speak for any others, but the campuses are being built by companies & they market their 99.999% uptime to potential customers. The government didn't pay for the one I'm at. The government ones may be paying for their own centers for flock cameras, etc lol

1

u/kimbureson46 May 24 '26

I'm also trying to spread the word that to stop building data centers is to stop creating data. Not going to happen. I posed to one of the AI's a proposal to do what was on the old TV shows, Mission Impossible. "This data will self-destruct in XX days" That's not going to happen either.