Power, People and Community Trust in Data Center Development | ITC Tax

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The primary solutions to address the growing power challenges in the data center industry involve shifting operations to rural areas and gas fields where energy resources are more accessible. Instead of relying solely on the existing grid, companies are increasingly constructing behind-the-meter generation facilities that allow them to produce their own dispatchable power. This shift not only provides a reliable energy source but also transforms the narrative around data centers; by generating their own power and potentially selling it back to the grid when needed, these facilities become beneficial assets rather than burdens. Consequently, this approach helps rural communities avoid the need for massive new power lines while simultaneously creating construction jobs, bringing in tax revenue, and fostering greater acceptance from local residents and state governments. Building long-term trust with the communities they serve requires digital infrastructure companies to adopt a strategy of honesty, authenticity, and what is increasingly termed "social permitting." This involves proactively engaging with locals to explain complex technologies, such as water cooling systems and computer efficiency measures, ensuring that the community understands how these projects operate and benefit them. To be viewed similarly to traditional manufacturing industries, data centers must not only communicate effectively but also strictly adhere to their commitments regarding green spaces and local amenities like parks. True partnership is established when companies follow through on these promises, demonstrating that their presence brings tangible improvements to the area rather than just economic metrics or wealth generation. Looking toward the future of digital infrastructure, the defining factor will be people, as technology must ultimately serve to benefit society and its inhabitants. While advancements in AI and data center capacity offer vast opportunities for wealth creation, these tools should always be directed toward improving lives rather than merely pursuing economic gains. Additionally, global dynamics, particularly the influence of China, are expected to accelerate technological development and investment efficiency. The competitive pressure from international markets encourages faster innovation and increased capital flow back into domestic regions like the United States. Ultimately, the industry's success will depend on balancing rapid technological progress with a steadfast focus on creating jobs, enhancing community communication, and ensuring that all developments serve the well-being of the people who live in those communities.

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[music] >> Welcome to JSA TV, where we're live on the floor at Data Cloud USA in beautiful Austin, Texas. With me today, we have Mark De Zeita and Adam Glatt from ITC Tax. Hi guys, how are you? >> Well, how are you? >> Great. Glad to be here in Austin. >> Wonderful. Has it been good for you? >> Ex- excellent. >> All right. So, we'll start with you. What solutions will have the greatest impact of the industry's growing power challenges? >> I'd say the greatest solutions of the industry's power challenges are the migration to the rural areas, to the gas fields, to where the gas is more readily available. And then the construction of the behind the meter is now very important rather than taking power from the grid. Generating your own power behind the meter as well as taking advantage of some of the incentives and funds that are available to actually build dispatchable power. It's amazing when companies can generate their own power, how they're much more, I say, welcome in the community and by the states. And that also removes one of the issues or arguments that a lot of the anti-data anti-data center, not in my backyard folks have is to say, "We're generating our own power. We can actually have dispatchable power that we can sell back to the grid as needed." >> Wow, so then that becomes a benefit for the community. >> It becomes a benefit for the community. It also helps generate a lot of jobs during construction. It also helps some of these rural communities have access to power so they don't have to have these large power lines coming in. Like I said, they can bring in jobs. It also brings a lot of tax dollars and investment to these communities. >> Yeah, absolutely. So, that's a good segue to our next question. So, how can digital infrastructure companies build trust to become better long-term partners in the communities that they serve? >> Yeah, so the trust is important. I think the a beautiful thing I've heard in this in this conference that's becoming more prevalent is just being honest and authentic as we talk to the community. That's incredibly important. You know, people people understand what's going on when you give them the correct information. I think we have to all take the approach of you know, I think we've I've heard the term thrown around now quite a few times of social permitting. So, you know, we have to get in front of the community and really let them know what's going on with the projects. Let them know how the water cooling systems work. Let them know how the technology works. I think there's additional technology that will help with the power as far as you know, computer efficiency will help with power needs. Cooling technology will help with reducing power needs as we look to power those cooling systems. And so, just communicating all of that in an authentic and honest way with the community is going to be incredibly important. I'd like to see data centers become what we're seeing now with as we do site selection work and incentive work. The the traditional industries are incredibly well received by the communities at this at this time because they're not data centers. So, what we need to get to is a point where the community really embraces and and welcomes the data centers into the community because they they've transformed into those traditional manufacturing types of those types of jobs. And so, with that also comes the follow through on the back end of all those commitments. You have if you make a commitment to maintain green space or add parks in the community, you really have to meet those commitments and follow through on those. So, that's one thing that as we do our site selection work and community involvement work, make sure that our clients know that hey, this isn't just saying something on the front end. We have to actually all carry through and meet those needs and exceed those expectations with the community. >> Yeah, and I think you're really going to start to see community engagement start at that site selection time frame, right? And we need to see it there. >> Yes. >> Awesome. All right, great. So, our last question I'm going to give it to both of you, all right? And so, that is in one word, what factor will define the future of digital infrastructure? Start with you. >> Uh people. >> People. I like that. >> we focus a lot on the technology when it comes to data centers, and there's great advancements in the technology. Um there's there's uh endless opportunity for what that will create for society, create for us. But, the focus has to be on people. Um and it has to be something that benefits people, benefits the community ultimately. We can't just focus on uh you know, how much wealth will be generated and the economics of the projects, which are vast, but it has to focus on people because ultimately even all that wealth generation and all the tools that we are creating with AI and creating with data center capacity, they should be here to benefit people. So, it has to always come back to people. >> Yeah, and end users are the people, right? >> Yeah. >> And how about you? What one word do you think? >> I would say China. >> Okay. >> reason why I'm saying China is China is going to make a lot of these companies become a lot more efficient. It's going to speed up the technology development. It's also going to increase the investment. I mean, when Deep Sea came out, you know, a few years ago, everybody was stunned what happened, but you know, the companies all recovered. We moved forward. We We have We're back in the lead now, but you know, them, meaning China, putting pressure on us will encourage development. It will encourage investment. And you know, and they you know, there's equipment being manufactured over there, but now, you know, because of China, we've decided to put a lot of our investment over here, and back in the US. So, I think China's going to increase the speed of the change in technology. It's going to increase investment, and I think it's also going to increase investment in the like, you know, Adam was saying, investment in our people. And create the jobs, create the technology, make us a much more efficient and better communicating community or country. >> I love it. All right, two new ones that we've heard today, people in China, okay. All right, so thank you for joining us today, and to our viewers, stay curious, stay connected, and as always, happy networking.