Metro Phoenix is one of the biggest markets in the country for data centers. Tech firms cite the lack of natural disasters as one of the factors that leads them to build data centers here. As computing power, including AI, increases, many experts expect the number of data centers both here and elsewhere to expand.
Phil Boas, opinion columnist with The Arizona Republic, and Elvia Díaz, the paper’s editorial page editor, joined The Show to talk about some of the challenges and opportunities.
Full conversation
MARK BRODIE: Phil, you wrote a piece about this, so let me start with you … what is the significance of the quantity of data centers in the Valley?
PHIL BOAS: Yeah, what really got my attention was the State of the City address. Mayor Kate Gallego was talking about all the economic winds that Phoenix has had, you know, things like the $165 billion investment in microchip production and the bioscience sector and the United Food International has just put their headquarters in Phoenix. And she was talking about their advanced robotics.
And then she got to data centers and really started to knock down data centers. She said they produce a lot of heat and noise. They produce paltry numbers of jobs, and they're a big drain on power and other resources.
And the reason I got my attention is that Phoenix is one of the world leaders in data centers, and data centers are pretty essential to everything we do. In fact, the State of the City address, I could probably come up with a 100 ways in which data centers were used to hat event and make that happen.
BRODIE: Elvia, data centers are obviously a very big part of the Valley's economy and, you know, making the Valley’s, you know, a lot of leaders want to make it sort of a tech hub. But they do tend to, as Phil pointed out, they do tend to use up a lot of resources, namely power and water.
ELVIA DÍAZ: And that's the most important thing that I'm paying attention here. In the same column, Phil is quoting Gallego saying that, you know, more than 90% of utilities perspective of new industrial electricity use is made up of one kind of user: data centers.
In other, in other words, they are taking so much, so much of our resources, of electricity. And to do that we need, or the data centers need, a lot of water. I'm looking at the, the fact that, that Arizona doesn't have a lot of water and we had been, you know, writing about that and paying attention to.
That's so yes, we one of the industrial revolution here in the, in that sense, you know, in the tech sector right now, but we have to be careful with how we manage our water. And I think the mayor is making, is making sense to me anyway.
Why, why does Phoenix needs to be the one carrying the burden of all those data centers or Arizona for that matter.
BRODIE: So Phil, does it seem as though there needs to be some kind of balance, do you think here between having the kind of economic development and other benefits that data centers bring while also maybe being mindful of the natural resources that they use?
BOAS: Yeah, well, I, I think the, the people that are building data centers care a lot about green energy and renewables, and a point that Sandra Watson, who is the president and CEO of the state Commerce Authority, has made is that they are putting in the kinds of investments that can help build renewable infrastructure for the future, things like solar.
In Mesa, for instance, they're creating a water system where they hope to be contributing by 2030 more water to the system than they're taking in. So, there, there is that sense within the tech industry that they're gonna have to be sustainable in the future.
But here's what we have to understand in Arizona. In our past, we have faced far greater scarcity when it comes to water, when it comes to electricity, and we had to do things about it in order to grow. And so we pushed for and got built things like Roosevelt Dam and the, the Central Arizona project, things like that, and, and made it possible.
The, the, we're looking at an industrial revolution in the United States and across the world even that's on par with what happened after World War II. There's gonna be a massive need for much, much more electricity, and data centers are only a part of that. We're gonna have to be building the infrastructure for that, to make it happen.
In fact, Ted Geisler, who's the president of APS, said in a GPEC roundtable about a year and a half ago that the Arizona electric grid is gonna need to double in size over the next 15 years. That's an amazing number and we, there are so many things that are contributing to that and they're just very quickly, electric vehicles, the computing demands such as data centers, but also artificial intelligence is gonna push that, and then industrial reshoring and just Arizona's population growth.
BRODIE: So Phil, do you think that there's maybe a chance here that data centers could in some way be a catalyst for change, a catalyst for innovation in terms of maybe using more renewable energy or more sustainable water practices?
BOAS: Yeah, I, I mean, I think that is Sandra Watson's point is that, that these firms and the investments they're making it are going to help us build the infrastructure for renewables into the future. The other point she made that is important is that the, the companies that are building these, you may have heard of them. Amazon, American Express, Apple, Google, Meta, Microsoft, Oracle, PayPal.
These are the titans of high tech, and by, you know, doing this and partnering with them, we're building a relationship with the people that are building the modern economy, and that has real benefits for Arizona moving forward.
BRODIE: Elvia, let me ask you about that because as Phil points out, there are a lot of big tech companies that are looking to have a relationship with Arizona. Is this a way that maybe the state could be pushing for more renewable energy or different, maybe more innovative water use practices using data centers as a way to achieve that?
DÍAZ: Yes, absolutely. I mean, Phil is talking about the Roosevelt Dam. I mean, when was the last time we built one of those? And when was the last time that we built the Central Arizona Project? We're talking many, many, many years ago, so, yes, and we need to be building that kind of infrastructure.
That's what the mayor is talking about, like not totally against data centers but let's build the infrastructure that that Phil is talking about before they come, you know, sort of what developers do right now if you're gonna build a bunch of homes, you have to prove that you have enough water to do it well that should be applied to data centers as well and yes maybe people are gonna be very creative and in doing so, but we need to do it.
We can just let them do whatever they want and take our energy for not just for Arizona, this is for the rest of the nation.
