Listen to the audio version >>The startling growth of hyperscale data centers for processing artificial intelligence threatens to exacerbate the climate crisis, the jobs crisis, and the affordability crisis. This commentary presents an overview of the data center explosion and its likely effects. The next commentary in this series will examine the emerging “Data Center Rebellion” and how it can become a major force promoting a Greentech New Deal.

 

 

Data centers are large warehouse-like structures filled with digital electronics that process artificial intelligence (AI). According to the International Energy Agency, “conventional” data centers can use between 10 and 25 megawatts of electricity while “a hyperscale, AI-focused” data center can use 100 megawatts or more. Hyperscale data centers can encompass more than a million square feet. Today there are 4,149 data centers in the US, with 2,788 more under construction or planned. Data center construction rose more than 34 percent between March 2025 and March 2026.

The explosive growth of data centers is already having a significant impact on the energy system. It will have an even greater impact on the transition from climate-destroying fossil fuel energy to climate-protecting Greentech energy in the future. So far, those effects are overwhelmingly negative.

The future of data centers, and AI more broadly, is filled with unknown unknowns. AI is pretty clearly both a technological revolution that will change the way we do things in many spheres of life – but also a technological bubble based on extreme claims that are unproven hype at best. Google CEO Sundar Pichai says artificial intelligence is “more profound than, I dunno, electricity or fire.”

Decisions and investments based on such dubious claims are speculative at best. For example, Chinese AI, with its far cheaper energy system and its cheaper and less energy-intensive strategy, is widely seen as less than a year behind the AI frontier. The AI boom depends on a debt bubble similar to many in the past marked by colossal overinvestment followed by collapse. Tech giants are using other people’s money to make huge investments in hyperscale data centers that have not yet shown they can be even marginally profitable. All of this is developing in the context of Polycrisis 2.0, with its unlimited warfare, unlimited arms races, energy crises, climate crises, galloping inequality, destruction of democracy, and overall prevalence of folly. Finally, the AI bubble is largely driven by the colossal egos of “hyperscalers” like Elon Musk whose megalomania and struggles with each other for dominance will have unpredictable ramifications.

Data centers and jobs

 

 

AI is clearly affecting employment, but estimates of its employment impact vary wildly. S&P Global’s recent executive survey showed that 42 per cent of organizations abandoned most of their AI initiatives in 2025, compared with 17 per cent in 2024. And a 2024 RAND report indicated that more than 80 per cent of industrial AI projects fail, mainly due to process complexity, poor data quality, and lack of real-world context. The vice president of vehicle hardware engineering at Ford, Charles Poon, explained, “Mistakenly, we thought that by just introducing artificial intelligence and adjusting the design requirements that we had, that that would produce a high-quality product.” Ford recently brought back 350 experienced engineers it had fired and tried to replace with AI.

The building of data centers will undoubtedly create jobs for a sector of construction workers. Nobody knows how many. Like most construction jobs, these jobs are temporary. In a Cologix data center in Columbus, Ohio, construction lasted on average six and a half weeks, with about 146 workers on site at a time. Jobs building data centers often are taken not by local workers but by workers from all over the country who come in temporarily to take the temporary jobs. The Industrial Development Agency in Genessee County, New York anticipates that 60% of the construction workforce at a proposed Stream US Data Centers Project will be from outside of the 14-county region.

Data centers create few permanent jobs. According to Kartik Hosanagar, codirector of the Wharton Business School’s AI research center, “Most data centers employ about one hundred to 200 people. In fact, when Apple created a $1 billion data center in North Carolina, the news stories reported that there were less than a hundred permanent jobs created as a result.”

A study of data centers in Texas found, not surprisingly, that when a data center opens there is a gross increase in data center jobs in a county. But, more surprisingly, these job increases are “offset by job losses in other sectors.” In other words, “though there are gross job flow changes, there is no discernable net change in jobs associated with the data centers in Texas.”

How many jobs will be destroyed by the AI that data centers power? The answer is, nobody knows. Some of the claims made by the AI industry seem extravagant.

“Dario Amodei, the head of Anthropic, has warned that A.I. could eliminate 50 percent of entry-level white-collar jobs within years. The tech investor Vinod Khosla predicted last year that A.I. would replace 80 percent of jobs by 2030. Elon Musk has said the technology will render work ‘optional.’”

Non-industry accounts indicate that the impact of AI on workers will be extensive. For example, researchers at Boston Consulting Group estimated that more than half of the jobs in the United States would be “reshaped” by artificial intelligence over the next two to three years, though far fewer would be replaced entirely. Amazon delivery driver Jonathan Rosenblum gives a vivid description of what that reshaping can mean:

“When I’m in the Amazon truck, every movement I make is tracked with technology and evaluated by AI programs — where I am, which packages I’ve delivered, and whether it’s keeping pace with the algorithm that Amazon has determined I must meet. Readouts at the end of every shift show how each of my deliveries compared to the timing prescribed by Amazon’s algorithmic standard. We are evaluated every week on whether we took accurate photos on delivery, delivered the packages exactly where the customer requested, and got good or bad customer feedback. Through the system, drivers who don’t “make rate” or who don’t meet Amazon’s prescribed standards don’t stay employed.

“Employers everywhere are seeking to imitate the behemoth’s labor model of exploitation, job instability, and — terrifyingly — the deployment of AI technologies to discipline and disempower workers. This workplace dystopia is being perfected at Amazon, then exported to other employers — in factories, grocery stores, hospitals, restaurants, hotels, construction sites, laboratories, and offices.”

AI-related layoff of tech workers at tech firms have made big headlines. But tens of millions of “back office” jobs are also threatened, such as customer service representatives, bookkeepers, payroll clerks, human resources specialists, and many others. These jobs are predominantly, or overwhelming held by women. Says Molly Kinder, a former researcher on AI at the Brookings Institution, “I worry that A.I. will be to high-school-educated women what deindustrialization was to high-school-educated men.

Whatever the future holds, AI is already destroying jobs right now. Researchers at Stanford University found that employment is already declining for entry-level workers in jobs that were highly exposed to A.I. “Early-career workers (ages 22-25) in AI-exposed occupations experienced 16% relative employment declines.”

Derailing the Greentech revolution?

 

 

Data centers use massive amounts of energy. They already used 448 terawatt hours globally in 2025, more electricity than all but 10 countries. That is on track to double within four years. Some data centers consume more energy than a mid-size city. According to Kartik Hosanagar of the Wharton Business School’s AI research center, in some US states data centers are already consuming up to 5% of all energy used in the state. In two to three years that is projected to be over 10% in most states. By 2030, data centers may consume enough electricity to increase the annual growth in electricity demand nearly five-fold. This July, BloombergNEF’s estimate of projected U.S. data centers’ power capacity by 2035 increased 83% compared to their estimate just half a year earlier. Data centers would account for about 20% of total US electricity consumption by 2035, up from less than 6% today.

US utilities are racing to build new fossil-fuel plants and are keeping ageing gas and coal plants open to meet the swelling requirements of data centers. But often the grid simply can’t keep up. Delays are holding up data centers’ connections to the electric grid by as much as 12 years. So big tech is investing massively to produce its own power by any means available. The biggest growth is in the gas industry, including fracking firms and pipeline companies. Gas companies are building new plants solely to supply data centers, leading to the largest ever construction boom of natural gas-fired power plants.

Some of the demand for electricity is being met by Greentech. For example, Google just developed the world’s largest grid-scale battery to power a data center in Minnesota, and purchased an energy company with which it is expanding renewable development, including a new “off the grid” center in Texas that will include wind, solar, batteries, and gas.

But the new energy for data centers is coming overwhelmingly from fossil fuels. Since 2023, some communities have seen a 48% increase in greenhouse gas emissions because of data centers. An example: Mississippi Power agreed to keep burning coal at one of its plants for roughly a decade longer than planned. In Michigan and other states, data centers have effectively derailed the grid’s planned transitions to renewable energy. Meta plans to build 10 gas power plants across Louisiana for its data centers.

The AI industry and data centers represent an extraordinary concentration of wealth and power.

According to the investment firm Jeffries, Amazon, Google, and Microsoft account for more than half of the country’s data center power capacity. Due to the data center boom, Microsoft consumes nearly four times as much electricity as it did before the pandemic; Google’s electricity use has more than doubled. Amazon’s emissions increased by 16% last year; Google’s increased by 18%; Microsoft’s grew by 25%.

Data centers are dramatically increasing electricity costs for utilities’ residential and business customers. Utilities requested $18.6 billion in electric and gas increases in the first six months of this year, according to a new report from the nonprofit PowerLines. More than $9 billion of those requests were filed in the second quarter of 2026 alone, up 26% from the same period in 2025. On July 14 the nation’s largest electrical grid operator said rising electricity costs would add $6.3 billion to the bills of millions of households and businesses within the next three years as a result of the power demands of data centers. Some reports estimate electricity bills may double by 2039 if data centers continue to be built at current rates.

Unconstrained, the rise of hyperscale data centers threatens to accelerate greenhouse gas emissions and thereby put climate change on steroids. It also threatens the jobs of millions of workers, local environments, neighboring communities, and the affordability of electricity, water, and other necessities of life.

The next commentary in this series will describe the “Data Center Rebellion” that is emerging from the grassroots around the country and presenting an unprecedented challenge to hyperscale data centers and the tech oligarchs who are attempting to impose them on American communities.