AI -- Politics of Technology, Port Washington, WI

Well the politics of technology around Tech's data center push, or is it putsch, continue to bubble-up across the country. The latest action occurring in Port Washington, WI, a town of 12,000 on Lake Michigan, just south of Milwaukee. Seems the citizenry discovered the Mayor and Council rushed a decision on a data center and there’s growing citizen concern it was a bad deal with “the project's potential impact on the environment, energy prices, water use and purpose of advancing AI.”

Monday night, the police cuffed and escorted out of the council meeting multiple people for what seems to be the crime of talking out of order. In the last two months, more and more people began showing up at council meetings, “with over 150 people showing up to the city meeting on Oct. 21 at a nearby Holiday Inn Express to accommodate the swell of interest.” Now, there’s no doubt if the citizenry actually starting showing up at local government meetings, this will create great consternation, especially among local government officials. But not to worry, it can be worked it out, it needs to be welcomed.

According to the Milwaukee Journal Sentinel* the data center will be utilized by OpenAI and Oracle with costs of $15 billion largely debt funded led by JP Morgan Chase and Mitsubishi UFJ. The point man in the deal is Vantage Data Centers who will build and operate the data center and take the lead on the initial infrastructure needs to a tune of $458 million.

The following numbers, it appears, were all provided by Vantage, so take with a very large grain salt. It will require 2 gigawatts of new electricity generation, as they say in the electric industry, that’s a lot, but good news, the center will only use 70%, the rest will be available to the good people of WI. A “roughly-100-mile power line project” will also be built. Best,“Vantage will pay for electricity in a separate rate category from We Energies, designed to shield other customers from energy utility price hikes.” Sure, over a 100 years all the electric industry has been about is shielding customers from rate hikes.

Water wise it gets better. “Vantage claims the campus will be a ‘water positive’ facility, meaning it would clean and improve more water than it uses, an estimated average of 22,000 gallons a day — the equivalent usage of 65 houses. At the same time, the city has agreed to supply Vantage with as much as 1.2 million gallons of Lake Michigan water a day from its water plant, city officials have said.” 22,000 and 1.2 million, something doesn't add up.

And, wait for it... “to minimize impacts on water resources, Vantage says it will invest in local water restoration projects.” Minimize impacts? I thought they just said it was going to be “water positive.”

OpenAI’s Vice President of Industrial Compute Peter Hoeschele said, “This project will create good jobs, advance zero-emission energy and boost the local economy — all while expanding capacity without raising rates for local consumers."

Speaking of jobs and data centers, the WSJ themselves recently wrote, “The AI Data-Center Boom Is a Job-Creation Bust. Tech and political leaders tout them as an employment bonanza, but data centers need very few workers in very large spaces.” Again, that's the WSJ. No doubt OpenAI and Oracle didn’t provide any numbers on the jobs the functional data center would replace either. These are the numbers and marketing BS the council and Mayor based their votes on.

Citizens objected "how the council could move forward with such a massive project without examining its long-term environmental impact and criticized city officials for asking residents to simply trust Vantage studies.” Ya think?

But those by far are not the worst numbers. In order to insure the project, they voted to create a Tax Increment Financing (TIF) district. Get a load of these numbers, “The city's Joint Review Board unanimously passed TIF district (No. 5), which will reimburse Denver-based data center operations company Vantage for fronting infrastructure improvements, along with interest, consulting fees and other costs associated with the project that total $458 million.” That’s right reimburse. I guess OpenAI and Oracle don't have the money pay to their contractor.

"When Vantage is repaid and the TIF closes after a projected 18 years or maximum of 20 years, the expanded tax base would return to the city's general tax rolls." Phew, 20 years before the city sees any tax revenue. What's the expected lifespan of one of those Nvidia chips?

As one citizen said, "That's not economic development. That's corporate welfare." In a community of 12,000 people, a thousand signatures were gathered in a week calling to place the TIF on a ballot for voter approval.

Stay tuned, the politics of technology begins its birthing process.

*This whole article if from reporting by the MJS, local journalism is essential.