Why are tax systems so complicated? | The Economist

From the populist right. in America. to the environmentalist left, a lot of people. really hate. data centres. The backlash. is so fierce. that the building of data centres. has become. one of the defining issues. of this year’s. midterm elections. Politicians are racing. to outdo one another. —promising restrictions, moratoriums and bans on. building AI infrastructure. But a lot. of the animosity. towards data centres. is based on misinformation.

Take water. One popular myth. is that data centres. guzzle huge amounts of it. In reality, a mid-sized. data centre uses roughly. as much water. as two golf courses. and considerably less if it. recycles its water. as many do now. Google has. calculated that. the medium Gemini text prompt. consumes about five drops, meaning even tens of. thousands of AI queries. would consume less water. than a minute in the shower. While they might not.

need that much water, data centres do. need a lot of power. But there is little. evidence so far that they. have raised energy prices. In fact, by increasing demand, they are spreading. the fixed costs. of energy infrastructure. among all the customers on. the grid at any one time. There are also. worries about noise. Constant whining. Kind of like a jet engine. But many viral videos. of supposed loud. AI data centres. are really Bitcoin mines, not the state of the art.

facilities AI bosses. want to build. Data centres can. bring tangible benefits. The companies. that run them. pay huge local tax bills, helping fund schools. libraries and. police stations. In Loudoun County, Virginia, a tax on computer equipment. inside its 250 or so. data centres. is expected to supply. 40% of the county's total. tax revenue next year. The windfall has. allowed the county. to cut residents’.

property taxes by about 30%. Despite all this the public. backlash against data centres. is understandable. The rise of AI. will be transformative, but it is also. scary and uncertain. Data centres are the only part. of the AI supply chain. that the public. can have a say in. That fear is. inflamed by tech bosses. when they warn about: ...dangerous... ...bad actors... ...existential risk... ...could lead to ruin... But America has. been building data centres.

for 80 years. It currently has. over 5,000 of them, supporting all sorts. of digital industries. —not just AI. If the backlash. stems from a desire for safer, more regulated AI, then data centres are. the wrong target. Americans’ anger. might be better. directed elsewhere.