It’s nearly impossible to look at any news source these days and not see at least one story about the growth of data centers and the economic impact of artificial intelligence (A.I.). The United States is currently the global leader in data center development; we have more than 45% of the world’s total, or 5,381 locations as of March 2024. Michigan, however, is home to just thirty-five data centers.

Operational data centers themselves do not employ a lot of people – a few dozen or so. Data centers do, however, pay a lot of property taxes without creating a large burden on local services. That makes them relatively ideal corporate neighbors.

Some communities are resisting the development of data centers for several reasons: land use, water use, and energy demand. To maintain perspective, opponents must first consider a simple question: compared to what?

Yes, data centers can occupy dozens or hundreds of acres of land. These facilities, however, use very little land when compared to the hundreds of thousands of acres that have been mandated by the state for industrial solar installations.

Thanks to our northern latitude and the sun’s angle during the winter, Michigan ranks 42nd in the U.S. for total sunlight hours. We only get 2.7 hours of optimal electricity production for nearly half the year. With so little direct sunlight, it’s no wonder that we need an estimated 400,000 acres of solar panels to meet the goal of quadrupling our renewable sources of electricity. Compared to solar panels, data centers look pretty good.

Michigan has plenty of open space in hollowed-out “rust belt” urban areas where roads and utility infrastructure already exist. We must ensure these possible locations are considered first rather than covering otherwise usable land. Our urban centers could sure use a boost in property tax revenue. 

Data centers also use water for cooling. All those computer components engaged in rapid processing and distribution of information heat-up when in use. Here, Michigan’s status as a cold weather state is an advantage. Our low temps can assist in the cooling of data center equipment. Second, look at a satellite picture of Michigan, and you’ll see plenty of water. Now, data centers don’t use water for equipment cooling then send it done the drain. Water is used for cooling similar to a car’s radiator. The same water is recirculated over and over because it is recognized as a valuable asset.

Last, data centers are loaded with valuable equipment that will result in significant property valuations and taxes. Michigan already exempted this equipment from sales and use taxes to be in line with surrounding states, making it easier to set up a data center. Once the equipment is installed, though, data centers will make considerable local tax contributions, paying the non-homestead rate for schools.

The “Magnificent Seven” – Alphabet (Google), Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla – are driving half or more of this calendar year’s stock market growth. These seven businesses, with combined market valuations in the trillions of dollars, are all committed to the future of A.I. in the U.S. and global economy. Significant growth in reliable (not weather dependent) electricity production will benefit the nearby communities and utility customers. These successful companies can afford large, upfront, local investment to ensure their plans become reality.

One look at a map tells you that Michigan is an ideal location for data center placement: cold weather state, lots of open land with existing infrastructure, and plenty of water. A.I. is and will be a significant part of modern manufacturing. We need to embrace and welcome the future. Finally, an industry that can benefit from our uncompetitive average January temperatures.

State Rep. Mark Tisdel, R-Rochester Hills represents Michigan House District 55, which includes the cities of Rochester and Rochester Hills, and part of Oakland Township. You can reach him by calling 517-373-1792 or by sending an email to marktisdel@house.mi.gov