Tech giants are now looking to Canada to build new data centres to power their fancy new AI products, but the energy-hungry facilities are already attracting political controversy.
Driving the news: OpenAI says it’s considering locating new data centres in Canada, and Meta is reportedly planning a massive new project in Alberta. That may be welcome news for governments hoping to attract AI investment, but it may also prompt backlash from voters who could end up paying higher electricity bills.
- Wholesale electricity prices have surged by as much as 267% in areas located near significant data centre activity in the U.S., according to a new analysis by Bloomberg.
Catch-up: Data centres used for AI systems consume a massive amount of energy. That typically causes electricity bills for all customers to increase: either demand outstrips supply, or new projects must be built and utility companies pass the cost onto ratepayers.
- The International Energy Agency expects that by 2030 data centres worldwide will consume slightly more electricity than all of Japan, so this dynamic is just going to intensify.
Why it matters: Data centres are quickly turning into a political lightning rod. Households and small businesses — already feeling the pinch of higher prices — are starting to turn against them, while governments try to lure the investment dollars that come with these projects.
- According to one research group, US$64 billion worth of data centre projects have either been blocked or delayed by local opposition in the U.S.
What’s next: The data centre buildout in Canada is still in an earlier stage, but some projects are already facing stiff local opposition — one plan for six data centres in rural Alberta was recently rejected by the local government after it sparked backlash among residents.—TS