Microsoft Points to Quincy to Cope with Data Center Backlash—But Can It Repeat?
As the data center backlash builds across the country, Microsoft is pointing to Quincy, Wash., as Exhibit A in making the case that the company’s communities can trust. But it’s unclear whether the conditions that made things work 20 years ago in a rural town still apply today.
On Thursday, Microsoft celebrated the community as the home of its first data center, hosted a community party and awarded $210,000 in grants to local organizations. In its two decades in Quincy, the company has created jobs and contributed property taxes that help fund infrastructure including a high school and police station. The local poverty rate has more than halved in 10 years, falling to 13% by 2023.
“The story of Quincy, Washington, and Grant County is a story of data centers gone right,” said Microsoft President Brad Smith in an interview with GeekWire.
However, a lot has changed since Microsoft flipped the switch on its first server there. In the mid-2000s, the region enjoyed abundant, accessible and affordable energy from hydropower, and a nationwide drought was a problem. That is no longer true.
Communities across the country are growing concerned about the rapid proliferation of power-hungry data centers driving up utility bills and draining local water, which the centers use for cooling. Seattle is considering a one-year freeze on computer infrastructure, while Denver; St. Charles, Mo.; a county near Dallas and one in Arkansas recently approved a ban.
A March Gallup survey found that seven out of 10 Americans oppose the construction of data centers for AI applications in their area, with nearly half strongly opposed.
So does Quincy’s model still work?
Smith says yes – with caveats.
The formula for success “might have to be a little different,” he said. To that end, the company launched its AI Community Infrastructure Program in January, promising to be a good neighbor wherever it builds. That includes paying for your own electricity and generous local incentives like property tax breaks.
In fact, it’s more complicated.
Quincy has become the data center of Washington, Microsoft as the largest company and other technology companies continue to build there. To meet the growing demand, the district wants to add six new transmission lines – a project involving private buildings and estimated at $260 million, reported the Seattle Times. It is not clear who will bear those costs and to what extent. Microsoft made more than $2.6 million, according to the Times.
Earlier this year, state lawmakers pushed for legislation that would require data center operators to cover costs related to power distribution and generation — a measure that would have eased public concerns about the facilities. The bill passed the House, but died in the Senate after Microsoft publicly opposed it.
The company expects to spend $190 billion on capital expenditures this year, mostly on AI infrastructure.
Smith said Microsoft supports the state-level legislation in general, but stressed the need to ensure that the benefits of data center development flow to local communities and that ratepayers are protected. He cited ongoing efforts in La Porte, Ind., and Cheyenne, Wyo., as promising new projects.
“People are smart,” he said. “They have a way of sniffing out whether or not a data center developer is going to be responsible, and they’re insisting that people be responsible – and I don’t think that’s fair at all.”
