Back to data centers

By Don Smolenski, Contributing Editor | TLT Machinery June 2026

There are more issues with the explosion of artificial intelligence than we realize.
The more I dig into data centers, the more I realize that it’s extremely complicated and something that will ultimately affect all of us. In my previous column1 I explained how data centers work and what some of the issues about data centers are. These large installations of computing equipment are required to support the expected explosion in artificial intelligence (AI). As I mentioned previously, an AI query requires about 10 times as much electricity as a normal Google query.

Land use. Land use is one of several infrastructure issues. Large plants could displace many farms and natural areas, and this would have unknown but potentially negative effects. Aside from the issues around the very large buildings to house the computing equipment, road improvements will be required, as will very significant electrical transmission line upgrades. (A single “hyperscale” data center would use as much power as nearly a million homes!) 

Water use. Water use is probably the biggest and the most contentious issue. Very significant heat generation by the computing equipment requires much cooling. In most cases the cooling is provided by water. A hyperscale data center uses up to a million gallons of water/day, and if thermal cooling is used, the water evaporates rather than flowing back to watersheds. Hence, the Great Lakes are very attractive for data centers.2

Electricity. Clean energy commitments (Michigan is 100% by 2040) may oppose plans for new fossil fuel plants to support data centers. In Michigan, for instance, one company signed a deal for 1.4 gigawatts and another company signed a deal for 6.4 gigawatts.3 This is equivalent to adding six or seven major cities to the grid in just two to three years! Will these data centers cause cost increases in electrical bills? If not controlled, a 1 gigawatt data center could increase residential electricity rates by 5%-10%.

Other. How will data centers affect jobs, taxes, communities and utility agreements? For the Great Lakes region, there will be huge concerns about potential effects on the Great Lakes and other environmental issues. These are a few other issues that I will cover in yet another TLT column including jobs, taxes, utility agreements, community other environmental issues and backlash.
 
REFERENCES
1. Smolenski, D. (2026), “Data centers,” TLT, 82 (4), p. 72. Available at www.stle.org/files/TLTArchives/2026/04_April/Machinery.aspx.
2. https://planetdetroit.org/2025/11/data-centers-water-energy-impact/
3. https://dcpulse.com/news/dte-energy-q3-2025-earnings-investments-data-center-agreement
 
Don Smolenski is president of his own consultancy, Strategic Management of Oil, LLC, in St. Clair Shores, Mich. You can reach him at donald.smolenski@gmail.com.