Data center industry uses propaganda to suppress opposition

Study authors accuse data center industry of manipulation

How the industry persuades residents

When companies began promoting data centers, they focused on promises of jobs and tax revenue. They spread these messages through mailers, text messages, television ads and targeted online advertising.

The authors write that a substantial share of campaign spending went through opaque nonprofits and anonymously funded organizations linked to the technology industry. For example, Elevate New Mexico presented itself as a local initiative without disclosing its ties to companies in the data center business.

As concerns about environmental effects grew, the industry began using terms that, the researchers say, can obscure the impact on water supplies and the power grid. Developers talk about closed-loop cooling and power supplied by on-site sources.

These measures can indeed reduce resource use, but the authors argue that their effects are often overstated. Closed-loop cooling can shift water use to earlier stages of the supply chain, such as power generation. On-site generators still rely on the shared grid for backup and stability, while competing with it for equipment.

What the numbers leave out

The authors cite an ad from Build American AI, an organization linked to the industry group Lead the Future. OpenAI and Andreessen Horowitz fund Lead the Future. The ad says data centers created 57,785 jobs in Texas.

But that figure does not show how many jobs are permanent and remain after construction ends. It may include cafeteria workers, gardeners and cleaners, who are often contractors without benefits. The researchers also ask whether contractors are included when average wages are calculated.

A similar issue arises with taxes: companies rarely mention the tax exemptions and other incentives they receive when they discuss revenue for local budgets. The authors say these incentives are often unnecessary to attract a project and reduce the funds available to schools and social services. Some local governments even calculate exactly how much money they lose because of the incentives.

Even when an agreement allows a government to recover funds if a project fails to meet its promises, local leaders often hesitate to do so: they do not want to admit the project failed. The authors conclude that accountability is therefore rare.

Little data means little oversight

Companies try to withhold important information about projects, sometimes with the involvement of local governments. In The Dalles, Oregon, Google paid the city’s legal costs after it withheld records on a data center’s water consumption. Under an agreement with the newspaper The Oregonian, the city agreed to release the information.

Most data centers do not report how much water they use, making it harder to make decisions. Nondisclosure agreements also limit the public’s ability to monitor the process.

The authors say local and state officials initially welcomed these facilities: they lacked information and resources, partly because of anti-tax policies. Residents were more skeptical, and some officials joined them over time.

Local activists and organizers told the researchers they believe decisions about their communities’ economic futures have already been made by big business and opaque governments. They criticized the lack of openness, late consultations with residents and community benefit agreements that did not match the expected costs. Those costs include higher electricity bills, air pollution, noise, depleted water resources and changes to local communities.

Response to opposition

The authors note that major industrialists have long sought favorable decisions from business leaders and government officials. But, in their assessment, opposition to data centers has been strong.

In May, Kevin O’Leary — a millionaire and Shark Tank personality who is building one of the world’s largest data centers — called two activists “representatives of the Chinese government.” He later acknowledged that he had no evidence. Nevertheless, the authors say similar claims have spread among technology company executives and officials in Washington. Activists and organizers also say they face such accusations and other online attacks.

The researchers find it ironic that data center supporters themselves use disinformation and other ways of manipulating information to advance their position. They urge officials not to accept, without evidence, claims that local opposition is organized by China.

Instead, the authors call for mandatory transparency requirements and other rules that would make companies keep their promises and disclose data on resource use, job creation and other matters of public interest. In their view, the requirements should also cover the conditions for advertising and campaign funding, where disinformation and coordinated campaigns disguised as local initiatives can take hold.

The study’s authors are Samuel Woolley, Dietrich Chair of Disinformation Studies and director of the Center for Research in Communication and Technology (CTRL) at the University of Pittsburgh; Dean Jackson, a senior research fellow at CTRL and editor of Tech Policy Press; and Maya Voluchek, director of the Trusted Infrastructure program at Data & Society and a research fellow at CTRL.

Dataist’s take: The data center debate is about more than promises of jobs and tax revenue. Without open data, residents and officials cannot verify who benefits and who bears the costs. The transparency requirements proposed by the authors are one way to strengthen that scrutiny, but they do not guarantee that projects will keep their promises.