As tech giants navigate the backlash over massive data-center expansions, Amazon is responding with a financial commitment of $1 billion for communities where the facilities are located.
The company is also pushing back against data-center critics and arguing the build-out must continue or the U.S. will risk falling behind in the AI race.
Amazon Web Services CEO Matt Garman wrote in a corporate blog post Friday that the company will invest the $1 billion over the next five years in places where it has data centers and those it plans to expand into. Garman said the money will go toward job training, free community college and energy upgrades for residential and commercial properties.
Garman said the investment is on top of $1 billion the company has poured into communities with data centers over the past three years.
Across the tech industry, companies like Amazon, Microsoft and Meta are spending unprecedented sums — hundreds of billions of dollars — on the data center infrastructure needed to power AI.
Running parallel is fervent opposition and growing polarization over AI and especially over data centers. Critics say data centers jack up energy prices for other ratepayers, guzzle water and cause pollution. A Gallup poll earlier this year found 7 in 10 Americans oppose constructing data centers for artificial intelligence in their local area.
Some local governments and states have gone as far as blocking data-center construction.
Seattle approved a yearlong moratorium recently. A bill in the Washington state Legislature that would have imposed comprehensive regulations on the facilities failed earlier this year amid staunch opposition from tech companies. That legislation did not include a moratorium. Further discussion about data centers is expected in Olympia when lawmakers reconvene next year.
Amazon is comparing the AI infrastructure build-out to mass public works projects like the interstate highway system. The company is on track to spend $220 billion this year on data centers and high-powered computer chips, an amount that exceeds the company’s annual reported profit.
“Right now there are over 100 data center moratoriums being considered across the country. If these measures are enacted, the U.S. could be writing its own losing ticket to this race, and the consequences would last generations,” Garman wrote. “As a country, we can’t afford to find ourselves in that position.”
In addition to the $1 billion pledge and a handful of commitments to how Amazon would handle its data-center build-out, Garman tried to dispel what he called “myths” surrounding the debate.
He said most of the usual talking points from data-center opponents were either misleading or false.
The company says its data centers are more efficient with water usage than the industry average. And Garman blamed the occasions where there are energy price spikes on aging power grids.
As data centers expand, they're expected to eat up a larger share of the country's electricity.
A June federal report on data-center energy consumption from the Lawrence Berkeley National Laboratory estimated that data centers could account for anywhere between 9.5% and 15.3% of total U.S. electricity usage by 2030. That estimated range increased by about 3% from a similar report last year.
A United Nations report from June said by 2030, data centers could account for nearly triple the combined annual electricity use of Pakistan, Bangladesh and Nigeria, which are collectively home to 650 million people.
A leading issue Amazon and other tech companies must contend with is how utilities' costs to meet this increased electricity demand could spill onto other customers.
Even as Amazon rebutted criticism from data-center opponents, the company said in its announcement that it will continue to adhere to a set of principles — now made public — when building the facilities.
The company said it works with utilities to pay for the upgrades needed to handle the extra power demand and that it is moving toward making its data centers “water positive” by 2030.
Amazon said it will also abstain from future nondisclosure agreements with local governments on data-center projects, taking away a layer of secrecy.
Amazon’s announcement is similar to others made by major tech companies recently. Meta committed $1 billion to communities that host data centers and Microsoft made a list of pledges on how it will handle future development.
But the Amazon and Microsoft commitments differ slightly.
A highlight of Microsoft President Brad Smith’s plan that he presented at the White House in January was how the company will approach tax breaks. Microsoft swore off local tax subsidies, another key issue in the debate over data centers. Microsoft and other companies received enormous state tax breaks as they were building data centers during the 2010s.
Amazon does not currently operate data centers in Washington.
In a bid to combat the narrative over tax subsidies, Amazon’s Garman said Friday in his blog post that the property tax revenue from data centers outweighs what the land would have yielded otherwise. He said that a project in Missouri will generate more than $1.8 billion in taxes over 25 years, compared with roughly $200,000 through the prior use.
Microsoft has pointed to this as well, especially in Quincy, Grant County. where the company has a large cluster of data centers.
The Seattle Times reported in 2024 that Washington’s tax subsidy program has reduced the tax bill collectively for companies by $474 million since 2018, with little transparency into how many sustained jobs were created. State lawmakers and Gov. Bob Ferguson earlier this year approved a rollback of some data-center tax breaks.
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