Arizona opinion: Stop demonizing data centers — Arizona needs them to grow

America has been great for a long time — 249 years and 10 months, to be exact.

And multitudes of great ideas were made in the USA. Nuclear power. The Marshall Plan. The Interstate Highway System. NASA and conquering the Moon. Reality TV — OK, maybe not that. Those amazing American creations gave us our modern way of life. We live in a truly visionary country.

Which is why we can’t lose that mindset.

That’s why it’s time to MAVA — Make America Visionary Again.

The best way of re-establishing that? Continue dominating on the artificial intelligence and data center fronts.

Yes, yes, light up the torches and grab the pitchforks, I know. There is negative noise around both, as people use their phone to complain about technology on X, then use that same phone to buy their next plane flight and deposit a check online and upload hundreds of photos to the cloud. All requiring — you guessed it — data centers to operate.

Data centers are easy to demonize.

It’s the big bad political monster of the moment, yet everyone continues to embrace the digital age like they’re allergic to going to a grocery store or bank. Then there’s the in-vogue demonization for cheap, short-term political gains while willingly sacrificing the long-term benefits.

As chairman of the Arizona House of Representatives Committee on Artificial Intelligence & Innovation, those attacks are extremely short-sighted. Here’s why.

In 2013, Arizona was reeling from the Great Recession and needed some visionary ideas to improve the economic climate. That vision for improvement resulted in the Computer Data Center Tax Relief Program, which qualified data centers to receive state sales tax and use tax incentives. Arizona’s economy needed to become more than just housing projects, tourism and agriculture. Since then, the state has seen an explosion in the presence of data centers, innovation hubs and semiconductor production. Arizona’s economy is booming, providing amazing jobs and flooding local and state coffers in the process.

This legislative session, Senate Bill 1463 was introduced, which would have repealed that program. The bill was a reactionary response to the sudden public outrage on data centers. While incentives were indeed put in place to attract new business, those incentives also pumped billions into our state as a result — a $25 billion contribution to the state GDP and $863 million in state and local tax revenue, both in 2023. Roughly 88,000 jobs are supported by the plan.

That’s why SB 1463 didn’t receive a hearing. It was bad policy. The state received far more on the back end than it sacrificed on the front.

Data centers are resolving the water use issue.

Water issues concern many, including me. The new data center builds are using closed-loop cooling systems, meaning the initial water draw is recycled over and over. For example, the massive TSMC project will feature a reclamation water plant, which aims to recycle upwards of 90% of its water usage. This, and next-generation cooling gels, is the future.

As for energy, there’s belief that consumption spikes by data centers are impacting rates. That’s false. Data centers do not impact residential user rates, as they are on an entirely different cost and payment structure. They’re parallel to each other, not intertwined.

I do understand the confusion, however, as the APS rate request case is ongoing, but it’s unrelated. The utility only makes requests for rate increases every six years or so and only asks for increases to cover capital expansion and infrastructure improvements. In addition, the new rate case also includes protections for residential customers: A 45% higher rate for extra high-load users; high-load users underwriting their own infrastructure development; and annual data center rate adjustments to cover their usage share. Those are just three components that will benefit you directly.

Data centers the focus of a new global “war.”

Lastly, the attack on data centers is a focal point in a second Cold War, this time with the Chinese Communist Party. The United States is far ahead in this sphere. China knows it — and wants to close the gap. According to the American Energy Institute, a free-market organization and think tank dedicated to promoting fossil fuels, activist groups scaring you about data centers received approximately $39 million in foreign funding, which was plowed into anti-data center messaging campaigns, lobbyist schemes and public pressure protest campaigns. Why is it worth it to outside interests to dump so much money into this matter? That alone should make you suspicious and concerned. This is also absolutely about our nation’s national security. We don’t want an even-more-powerful China controlling the world’s digital future.

When it comes to data centers, the advancements of the moment are thanks to past efforts to support the economic ecosystem. Let’s all focus on the bigger picture and Make America Visionary Again. After all, Arizona has been visionary for 15 years and we can’t kill that momentum with bad policy shifts, unfounded fears and a torch-and-pitchfork mindset.