A $165 billion proposal to develop an artificial intelligence data center campus in the border community of Santa Teresa took a step forward Friday when Doña Ana County commissioners voted to approve mammoth corporate tax breaks for the project amid fervent opposition from residents.
Known as Project Jupiter, the proposed development by Austin-based BorderPlex Digital Assets will include microgrid power generation and water treatment facilities, officials have said.
Doña Ana County’s five commissioners voted 4-1 after a raucous, hourslong meeting Friday, approving a stunning $165 billion in industrial revenue bonds for the project, which has the potential to radically change the economic landscape of the El Paso and Las Cruces region.
but it’s not clear whether the region’s infamously troubled water system will be able to support it, or if it will be able to generate its own energy in compliance with state law. Critics of the deal, including local residents and state lawmakers who represent the area, say the project’s proposal for a natural gas generating station appears to exploit a loophole in the state’s landmark Energy Transition Act.
Local pols don’t want to miss out on the AI rush. Even though it could have a negative environmental impact. I imagine some county commissioner’s pockets got filled with green.
We have been suckers in the past for outside consultants.
Around 1970 we blocked off downtown Main street creating a mall that killed all downtown businesses. It took 40 years for the town fathers to admit its mistake and reopen Main St and bring the farmers market to downtown to revitalize the area.
And outside consultants in 1997-98 convince city fathers that we could create our own electric utility and curb electric costs. After years of lawsuit and gawd knows how much money was spent; the city walk away in failure. But I’m sure the consultants got paid.
but also worth noting, the linked articles tracing the local outlines of bubble formation, also was loaded with unsurprising information about repetitive on the ground rolling of locals by shysters and idiots of all stripes (from “urban planner” gurus to shyster bankster “energy specialists”), and left me truly nauseous.
Here’s another notable sign of something weird in the economy writ-large. Data center developers are now approaching multiple utilities with proposals for the same project, leading to “phantom” forecasts of demand that isn’t actually there. Essentially, it’s hoarding.
Hoarding is what happen in overheated markets, such as the post-Covid moment when everyone was looking for chips. But this can lead to something called the “bullwhip effect.” Buyers overstate how much they want to buy in the hopes they’ll get something that is in shortage, and then when suppliers start making more of it, all of a sudden the demand evaporates because it was never real in the first place.
Are we seeing mass hoarding of data center capacity? Who knows? I mean, the immense build-out from blue chip firms continues. This week, Google announced it is investing $40 billion in data centers in Texas. And “Anthropic announced that it will invest $50 billion in data centers across the US, including in New York and Texas, which has an abundance of land and relatively cheap energy.” So the investment boom is continuing.
We have a one-legged economy, with the AI build-out serving as a driver of real estate values, the stock market, and GDP growth. It’s central planning, Silicon Valley-style.
Is the 2025 AI/data center expansion just today’s version of the California Gold Rush?
There’s gold in them thar hills fellers!
Selling out. Giving up 30 years of property taxes for investments that equal less than 1% of the bonds seems sketchy. As you mentioned, the water resources are already scarce in the area. No amount of investment is going to magically create water where there is none.
Just another example of how people who live in and around colonias get screwed. Good article on the topic -
Natural gas for power should not be a problem, being near West Texas and all. However, water is in short supply in New Mexico. Is the water used for cooling? If so, can it be recycled? Is air cooling feasible?
Feasible? Yes, depending on the climate of the location. Like many things, affordability eats feasibility’s lunch when it comes to data center cooling systems.
[Approximately 80% of the water] (typically freshwater) withdrawn by data centers evaporates, with the remaining water discharged to municipal wastewater facilities. The large volume of wastewater from [data centers may overwhelm existing] local facilities, which were not designed to handle such a high volume.
Here’s another:
* Large data centers can consume up to 5 million gallons *per day*, equivalent to the water use of a town populated by 10,000 to 50,000 people.
* With larger and new AI-focused data centers, water consumption is increasing alongside energy usage and carbon emissions.
Google, according to one source, recycles water at just 25% of its data centers. Amazon’s number is even lower. But even if you recycle, evaporation is a major issue so you need a constant source. And then you need more water for cleaning, as mineral deposits from the evaporated water (just like your Keurig or humidifier) need to be cleaned off using chemicals and more water.
That’s one of the reasons for the boom in research in more efficient chips which produce less heat. I read about one the other day testing something they call “chip-lets” which (supposedly) reduce the heat/power output by 50%. The article was maddeningly vague about what kind of processing power they contain, however.
Did they consider closed water cycle or only what has been in use in the past? If you have plenty free water you don’t mind evaporation but when water is scarce you need different technologies.
None. It doesn’t use water for cooling. It does use air, and moves it through the battery pack at up to 80mph as the car rolls along, and even has cooling vents that open and close as the temperature requires.
If you know of a data center moving around at 50mph, let me know. I can probably get an article published about it in a technical journal.
Open loop systems are less expensive to design and install. In some situations they are more efficient as well. But you would never run open-loop in a car because nobody would want to stop for more water more often than they stop for gasoline. In short, open loop makes no sense in a car, but quite a bit of sense in a data center.
Data centers are moving to closed loop systems, mostly because of public backlash. It’s an incredible waste of water. And many of these locations do not have water to waste like this.
Maybe overbuilding something isn’t always so bad. Back 30 years ago, companies overbuilt fiber (and other telecommunications) capacity and many companies went out of business. But the side effect of all those cheap bits contributed to a “data boom” and the internet/tech boom over the next 2 decades. Clearly a net economic positive. I wonder if overbuilding data center capacity, and more importantly, electricity production capacity might have a similar effect after a potential AI bust? Maybe there will be excess electric capacity and that will lead to lower prices for electricity and that might lead to some other sort of boom in the future?
Many of the legacy data centers use evaporative cooling. The cost of retrofitting them with closed-loop systems is high. This probably won’t happen unless water reaches peak scarcity in those locations.
Many new data centers will use liquid or some kind of hybrid cooling system. While water demand is quite a bit lower, there are other trade-offs.
True dat, but then again…last time I checked, there are serious water quantity and quality issues in Santa Teresa, NM. Makes one wonder why they’d use a cooling system that requires water. Liquid cooling is an option, why isn’t BorderPlex planning on using that technology? Because it’s $$$$$.
Traveling up I-25 to the Los Lunas data center -
“By comparison, the Meta data center in Los Lunas is permitted to use about 163 million gallons per year, an average of about 447,000 gallons per day.”
Meta has announced they will use far less water than what they’ve been allocated, but they’ll still own the rights. As drought conditions continue, water will become more expensive for everyone else. These communities are selling their souls to the Big Data Devil.
Oops, my bad. Yes, that’s a closed loop system where the water actually touches the heat generating component through channels in the engine block, and then is recirculated to a radiator (which required air circulation to run.) But mostly the car provides the air circulation, maybe aided by a fan when the air movement is insufficient. Hard to have the water actually touch the electrical components of a data center, no?
Again, if you’re going to have to move the air against a stationary radiator, why not just move the air and replace with ambient air in the first place? I’m sure you could build a closed loop system to handle the million+ gallons of water it would take, and in water starved climes they probably have, but absent that, it’s a lot more expensive than just flushing with “new” water or “air cooling” to start with. (where possible.)
There are lots of ways to cool stuff. The problem is data centers are constrained mostly by lack of power, not lack of water. A common way big buildings are cooled is water is chilled with a centrifugal or other type of chiller, and the waste heat is rejected by a cooling tower. Most of the water gets recycled.
But evaporative evaporative cooling uses much, much less electricity and is particularly suited to dry climates.
