Front Burner - The true cost of AI data centres

Episode Date: March 24, 2026

This spring, just outside Regina, construction is set to begin on Canada's largest data centre. Many of these massive server farms, that train and power AI, are being built or proposed across the country.They’re all part of a global infrastructure supercycle. In the U.S. alone, data centres have nearly quadrupled since 2010. Amazon, Microsoft, Google, and Meta plan to spend more than $600 billion on their expansion in 2026.But as they grow – so does resistance to them, as communities begin to ask what they’re giving up to power the world’s chatbots.Ellen Thomas is an investigative reporter with Business Insider. She’s been covering the AI data centre boom in the U.S. for years.Ellen spoke to host Jayme Poisson about the true cost of building data centres, and what it takes to keep them open.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

This ascent isn't for everyone. You need grit to climb this high this often. You've got to be an underdog that always overdelivers. You've got to be 6,500 hospital staff, 1,000 doctors all doing so much with so little. You've got to be Scarborough. Defined by our uphill battle and always striving towards new heights. And you can help us keep climbing. Donate at lovescarbro.cairro.ca.

This is a CBC podcast. Hey everyone, I'm Jamie Poisson. This spring, just outside Regina, construction is set to begin on Canada's largest data center so far. Saskatchewan Premier Scott Moe says it is a huge economic boon for his province and a big win for Canadian data sovereignty. Bell Canada has chosen Saskatchewan is a place to construct an estimated $12 billion data center. One of the most significant-sized data centers on.

on Earth, an investment that means hundreds of new jobs, resulting in a significant contribution to national Canadian data sovereignty, which I think... We're seeing lots of these data centers being built or proposed. Bell has at least six at various stages in BC, including at least one that is already operational. There's a slew of them set to open this year in rural parts of Alberta. Of course, this is all part of a global infrastructure super cycle. In the U.S. alone, data centers have nearly quadrupled since 2010. Amazon, Microsoft, Google, Meta plan to spend more than $600 billion on their expansion in 26. Just to put that into context, that is the GDP of some nations.

These massive server farms are the backbone of training and powering AI. But as they grow, so does resistance to them as communities begin to ask, what are we giving up to power the world's chatbots? Ellen Thomas is an investigative reporter with business insider. She's been covering the AI Data Center boom for years. We're going to the U.S. to see what happens when an AI data center opens up in your town and discuss the true cost of building them and keeping them open. Ellen, hey, thanks so much for coming on the show.

Thanks for having me. So let's start with the scale of this one center that's going to be built in Saskatchewan, Canada. This is going to be built on 160-acre. piece of land. So that's 120 football fields. And it'll be a 300 megawatt facility. That sounds pretty big to me, but how does that compare to most AI data centers that are up and running in the U.S. right now? 300 megawatts is a very big data center. Roughly speaking, 300 megawatts is enough electricity to power two to 300,000 homes. So about the size of Detroit.

Granted, in the U.S., we're seeing much bigger data centers being built, like three, four times the size, but we shouldn't downplay how big 300 megawatts still is. The company behind this project Bell is promising 80 full-time jobs at this facility, on top of around 800 temporary construction jobs. And just what are these full-time jobs likely to be? It doesn't, it didn't sound like a lot to me. Yeah. So the boom and data center jobs really comes at the beginning

because you, of course, need a lot of workers, construction workers, electricians to get the data centers up and running. And in the U.S., there's so much data center development that you have these professionals kind of, going from site to site. Once the data center is done in Ohio, they might move on to another project in Indiana or some other state. However, once the data center is built, it's pretty self-sufficient and you don't need a lot of workers to maintain it. That being said, the 80 jobs that are on offer are likely to be kind of a mix of technicians. They do need people who are around

to manage the physical infrastructure, whether that's the racks of servers, the computers, the HVAC systems, electricity wiring, they'll need security personnel. That's what's going to comprise the 80 jobs. And data centers will say, and this is true, that they often, you know, these jobs are higher paying than, you know, they're not minimum wage jobs,

but, you know, there's a limited amount of them to go around. We're still waiting at a lot of details about this particular data center and how it will work. But one of the big concerns in the lead-up has been about the possible impact on municipal water and electricity. And I know that's come up quite a bit in your reporting about U.S. data centers, like in Virginia, home to the largest concentration of data centers in the world, interestingly. And what was it like in the state when different communities were debating the pros and cons of data centers, moving in. Data center developers will come in with the reasoning that data centers are great neighbors. They're these big, giant buildings that sit relatively empty. They don't use a ton of resources, and they contribute to the tax base. What we have business insider found is that that isn't

necessarily always the case. We did an investigation called the true cost of data centers. And one of our findings was, you know, data centers are guzzling millions of gallons of fresh water a day. 40% of U.S. data centers are in water stressed areas of the country. So water is a big concern. Electricity is another concern, straining the local power grid with the amount of electricity that data centers need. They need to be on 24-7. They're constantly using electricity. And that raises questions like who's going to pay for that electricity.

And, you know, if there's new infrastructure that needs to be built, who pays for that? There are questions over the amount of taxes that data centers use in northern Virginia, which is kind of the most mature data center market in the U.S. There is a debate right now. The local state legislature is stalled currently over the state budget for the next couple of years. because they are unsure as to whether to continue giving data centers these really generous tax breaks that the state found has been costing Virginia a billion dollars a year. They could be getting a billion more dollars in taxes, if not for the data center tax incentive.

And just to be clear, they were given the tax breaks in the first place. Why? Because Virginia thought that it would be a boon to the local economy to have these data centers there being built. and even though they don't employ a lot of people in the end. Yes. 10, 15 years ago, when data centers, not much was known about them, it was relatively easy for a tech company or a data center company to come in and tout all of the opportunities that could come with this kind of economic development. But now that we're seeing that start to play out, it brings up some questions. I have kind of an obvious question for you

that might sound a bit silly, but why do they use so much water? Electricity, you know, makes sense, but why so much water? Yeah, no, not silly at all. So when you think about a data center, it is literally a room filled with servers. It's just racks and racks of computers. And those computers get really hot. And the AI data centers specifically get really, really hot because they're working extra hard. The general rule of thumb is that an AI workload takes like 10 times the amount of energy

to process as, you know, like a traditional cloud computing function, you know, like data storage. So AI data centers are just super energy intensive. And with that comes, you know, the generation of heat. And they need these really intense cooling systems to maintain the data center. And those often take up a lot of water. So increasing. we're seeing more and more pushback to these projects, right? Our producer Elaine was doing a quick survey from just the last few months,

and there are communities trying to shut down these projects in rural New York, Alabama, California. Here in Canada, the proposal for a natural gas power plant in Olds, Alberta, meant to supply power for a one-gigawatt data center development was just rejected by provincial regulators. And residents raise a lot of concerns about air pollution. and noise pollution that is going to be guaranteed to happen, but to what level we don't know. I don't know if we quite understand the full scale of what we're getting into. My main concern is the emissions, the water use, the land use.

You were talking about before, I think it's worth me mentioning. Alberta has challenges with water supply and consumption without any of this. And three quarters of the data centers planned in Alberta in areas with high water stress, according to a recent analysis by the National Observer in Lorneville, New Brunswick. Residents are also worried about how a data center will affect drinking water and also old growth forests nearby. But it's really hard for us to believe in the word you say. Tension filled the packed Lorneville Community Center.

You can't replace these weapons. You can't replace our quality of life. For nearly two hours, Beacon AI Center's co-founder Joseph Shovelyn and VoltaGrid CEO Nathan O took questions from the community about building an AI data center at the recently expanded Spruce Lake Industrial Park. We still feel like there's a lot of details that we're missing. Can you tell me more about some of the pushback that you have witnessed and how much it has grown? You know, I guess it's a chicken or the egg question, but all of a sudden, as data centers became a bigger news story, we started seeing more local coverage crop up.

And all of a sudden, it became the story. You know, these movements are often very grassroots. Sometimes they're started by the people who, like, literally live next door to the data center, like a neighborhood association will get together. Sometimes they're citizens' actions groups or, you know, in Memphis, Tennessee, where Elon Musk has a big, what's called a super cluster of computers. for his company, XAI. A recent health department hearing turned into a shouting match. Eat a lot of me. An executive from XAI ducking out a side door.

There's a lot of local organizing there on the ground to begin with. And the Memphis community organized really quickly around Elon Musk's data center. It starts at a very local level. And I mean, but having quite a bit of success or at least some success, right? I was looking at some stats from Data Center Watch, which is this nonpartisan group that's tracking opposition to data center projects in the U.S. only. And they're reporting that local communities delayed or canceled $98 billion worth of projects between March to June 2025 alone, just like a couple of months. Yes. You know, the one really powerful tool that communities have when they're engaging in these pushback campaigns is, They can exert pressure.

They, I think communities are in a bigger position of power than they realize these companies, the data centers, the tech companies, they want to get these data centers up and running fast. They do not want to deal with local opposition, any kind of delays, push back, and they can go other places. And when we're talking about the impacts here, I mean, electricity, for example, what? impact does the level of demand that we're seeing from these data centers actually have on like the price of electricity, you know, in an area? There are so many factors that go into determining the cost of electricity for consumers. I will say that the general consensus of all the power grid experts I've spoken with is that just the fact that data centers are driving so much demand is,

making the cost of electricity go up for everyone, just as kind of like a general supply and demand economics thing. On a more local level, utilities are spending a lot of money to build new infrastructure to serve the data centers. And that cost is usually born by a utility's entire rate payer base. Yeah. Give me an example of that. Okay. So a not- nonprofit group here in the U.S. Power Lines did a study that came out recently, and they found that utilities last year asked for $31 billion more in rate increases than they had the year before. And they found that this was the case across, you know, multiple states, multiple utilities. One big example, of course, is Dominion Energy. They supply energy to about 75 per

of the state of Virginia, even though data centers are really clustered in the northern part of the state, that cost is being borne by Dominion's entire rate base, no matter where they live, because of the way that costs are spread out and allocated. Scent isn't for everyone. You need grit to climb this high. this often. You've got to be an underdog that always over delivers. You've got to be 6,500 hospital staff, 1,000 doctors all doing so much

with so little. You've got to be Scarborough. Defined by our uphill battle and always striving towards new heights. And you can help us keep climbing. Donate at lovescarbro.cabrough.ca. Who's your favorite writer of all time? And if you could sit down and have dinner with them, What would you ask?

It might be tough to get a dinner date, but I can try to give you the next best thing. I'm Matea Roach. On my podcast bookends, I sit down for honest conversations with some of today's literary stars. People like Zadie Smith, Ken Follett, R.F. Kwong, and Louise Penny. Whether you love books or just want a new perspective on your every day, check out bookends with Matea Roach wherever you get your podcasts. This year in the State of the Union, Trump introduced. a mandate for data centers to build their own power plants, essentially?

Tonight I'm pleased to announce that I have negotiated the new rate payer protection pledge. You know what that is? We're telling the major tech companies that they have the obligation to provide for their own power needs. They can build their own power plants as part of their factory so that no one's prices will go up. And in many cases, prices of electricity will go down for the community and very substantial. And is that something that companies are actually doing, building their own power plants?

There's still a lot we don't know about the ratepayer protection pledge and what that might entail. But even, you know, before the state of the union, companies here were already building their own power plants. In Texas, in particular, which has a very strained power grid, data centers have been building, you know, since last summer. big natural gas plants. Sometimes they're called behind the meter projects. Sometimes they're called off the grid. They're basically just private on-site power plants that connect directly to the data center and give them power. There's been so much demand for these kinds of plants that some data center companies are getting really creative with what they're using. We're seeing you know, jet engine turbines being installed to power data centers.

That data center that we talked about earlier, the big one, well, big for here in Saskatchewan, they're building next to an electrical substation, but the province is also looking into nuclear power from large-scale reactors. And is that something that we're seeing in the U.S. too? What are some of the alternative sources of power that are being looked at right now? We see that a lot in the U.S. We see a lot. We see a lot of announcements about data centers and, you know, localities, researching, funding, looking into small modular nuclear reactors. And the thing that I have heard experts say over and over again is that this technology is years away from being deployed at scale. And, you know, the fact the data centers have this enormous electricity demand now does create the opportunity to, you know, put money towards studying new ways to generate power.

The reality is that most of these facilities are going to be powered by natural gas, which is what all of the utilities are building to serve the new infrastructure. sure. And this, I guess, also feeds into the environmental concerns here that this will be kind of a continued reliance on fossil fuels to keep this industry going, right? Yes. Just to keep going a little bit more with the environmental stuff, I know in Virginia, an environmental impact report dead in 2024 by the government concluded that an 11 building Amazon Data Center campus would permanently affect nearly six acres of wetlands. You know, I wonder if you could just elaborate for me a little bit more on some of the other environmental impacts that you're coming up against in your reporting. In 2024, an independent legislative committee put out a study in Virginia, just looking at all of the different effects that the data center industry has had on the state. And one thing that was interesting was one of the local water companies that has a reservoir that gets a lot of the data center running. off said that, you know, there was a higher than normal concentration of forever chemicals or PFOAs in the water. And, you know, that should be looked at. So that, that to me was one thing

that I think that we should continue to watch. I'll be interested to see what happens. We'll have to continue to watch and see if that eventually is studied. You know, other concerns are the diesel powered backup generators that data centers run on. You know, data centers, again, have to be powered 24-7. And so they have these diesel-powered backup generators that are ready to go at all times. In the U.S., some people in the data center industry are advocating to, because power is so constrained, they're advocating to, you know, have the data centers run their backup generators more, which, of course, would, you know, release more pollutants into the air. How are the big tech companies, Amazon, Google, et cetera, Open AI, kind of broadly responding to all of this pushback?

Microsoft, for one, has been pretty proactive about trying to change the narrative around data centers. You know, Microsoft has come out and said that it, you know, from now on it promises to be a better neighbor. It's going to ensure that it pays its own way for its electricity. It's going to, you know, I think they're going to stop using NDAs when they first come to town. And we've seen, you know, anthropic, open AI come out with similar, very similar statements. You know, they're getting a lot of negative attention. And they definitely want to flip that narrative. Yeah.

I mean, it's just really interesting listening to you talk about all of this, because the United States is just, you know, further ahead, really, than Canada. And, like, I'm looking at some polling that's literally just been released now from a polling from here, Abacus Data. And really kind of the headline is that Canadians don't really know what to think about these things right now, that they're still kind of forming their opinions on whether or not we should have them here, right? At a broad level, they're kind of divided on whether building more. would be a good idea or not.

And, you know, one of the arguments that you hear from people who are really pushing these centers here is that they are being pitched as models of data sovereignty, right, as a way of appealing to people's sense of patriotic duty to take ownership of our data, right? So that, frankly, you guys don't house it all and control it. And, you know, what would, what do you make of that argument? I mean, I don't mean you guys, you know, the United States. And our data center is really a way for Canadians to control our own data. I understand that one, you know, one way to ensure that that data is sovereign and not subject to any foreign laws or interference. You know, one argument for that is to just build all of the data centers. in the place where they're needed and have, you know, all of the Canadian data housed in the

Canadian data centers. The flip side of that is that there are people who say the idea of data sovereignty is really a legal and a compliance issue. And you can get around those issues by, you know, terms and contracts and, you know, new laws, new regulations and, you know, making sure that foreign governments, foreign adversaries can't access a country's data by law and not just because of where the data center is physically located. So that's something that we're still seeing really play out. You know, I was kind of looking up some of the local coverage. It's not something that I've heard a lot about in the U.S. But I can see how that would be kind of a compelling idea for Canadians. You're probably not hearing about it on your side as much because, you know, you have all the big companies there and we're quite reliant on those companies and sort of in the face of threats of annexation.

This has become like a much louder conversation. Could the United States, for example, use economic force or impose kind of controls on critical AI infrastructure disrupting our own. economy in order to extract something from us. You know, one of the other arguments I've heard around this important topic is that the push for sovereignty could mean kind of giving up stuff too, like the chief technology officer at IBM, Canada essentially argues that the more separated you are from the global cloud computing system, the more resources you have to pour into it and ultimately it will make your business model much less competitive. Like this is where

the United States is where all the biggest and most fast-moving companies are on this stuff. And they have like a lot of services that are kind of built around all of this. And it's complicated.

AI is developing at this exponential rate and the requirements for that development could be changing fast. You know, what do we know about how needed these data centers will be in the long term? even like a decade from now. Well, it's something that I'm starting to hear business leaders talk more and more about.

The short answer is we just don't know. The data center industry has not been around long enough for us to, you know, really see whether these data centers will be necessary in 20, 30, 40, 50 years. One thing that I like to point out is on an Amazon earnings. call sometime in the last couple of years. The CEO, Andy Jassy, said something to the effect of, you know, the useful life of a data center is 25 years. There are experts out there who say that, you know, hey, these big data centers that are being built for AI training, you know, once once the AI is trained, we won't need these big data centers anymore. You know, we'll move on

to another, another need. So we'll just have to see. Okay. That feels like a good place for us to end. Ellen, thank you so much for this. Thank you so much. All right. That's all for today. I'm Jamie Poisson. Thanks so much for listening. Talk to you tomorrow. For more CBC podcasts, go to cbc.ca.ca slash podcasts.