Just $400 Billion For Five Data Centers
A group of tech and financial firms plans to open five data centers for $400 billion. They will all almost certainly be in rural areas. Industry leader OpenAI is the lead company handling the installations. Japanese tech investor and tech giant Oracle will also be major participants.
The centers will be in Lordstown, Ohio; Shackelford County, Texas; Milam County, Texas; Doña Ana County, New Mexico; and location in the Midwest., There are news reports that a large data center will be built in central Michigan.
Two hurdles have arisen regarding these data centers. The first is how they will be funded. The other is where they will get their electricity.
Rural Areas
There appear to be ample numbers of institutional investors willing to offer debt, but probably not buy equity. Banks can negotiate favorable terms, including their position on the cap table.Â
A look at each of these locations does not reveal whether a significant amount of electricity is available. It is possible that OpenAI plans to develop renewable energy sources. They would either have to be close to the facilities or connect to the grid. Given the massive amount of electricity required, grids could be an issue.
Finally, electricity bills are rising nationwide. In some states, the increase last year was over 25%. The price of electricity will not just be an economic one. It will be thrown into the mix in the upcoming elections. Residents do not want to pay for massive data centers.
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