Doesn't matter. If AI crashes, the demand for data centers crashes, and all active projects will be cancelled.
Is the shine already coming off ai & data centers?
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Well it'll be the end of the world then. And it won't matter.
Those people in Southaven aren't pissed off because of a Chinese conspiracy.
And, of course, the data centers that have been built over the last 30 years have not been the specific type of energy and water intensive data centers that are being built specifically for AI. These, along with the data centers that were built for crypto mining about 10 years ago, use power at an order of magnitude greater than the "internet" data centers.
When you use your credit card today, your transaction passed through a data center.
Again, what kind of scam do you think is involved here? Counties have received ad valorem taxes for a long time. There have been ad valorem tax abatements and fee in lieu agreements for a long time. We pretty much know how they work. There are no "strings". Do you see a lot of people complaining about Toyota or Continental Tire and how the state or county got scammed?
If the county doesn't make major project specific infrastructure investments without security, the biggest risk is basically that you end up with an unfinished facility that is an eye sore. Or if it gets finished, then in certain industries, you could have the risk of an eye sore that is also an environmental liability. Once the data centers are built, they are going to be useful to somebody. May turn out to be a terrible investment for the original company, but if they go through bankruptcy, somebody will buy it and try to make money off of them.
ETA: and the people getting rich off of them will be the people actually selling land, goods, or products to them, but the counties will still get a large net boost to their budget if they don't 17 it up, or else they will end up no worse off except for an unfinished project sitting out there (again, assuming they don't 17 it up).
Correct, they aren't good or bad.
I think the better question, for Mississippi, is whether they need to be investing in something that doesn't net a whole lot of jobs. The fee the county gets? Sure, that's good I suppose. And again, keep them in industrial areas like Lauderdale is doing, fine. And MS has a ton of areas like that.
I suppose you take what you can get, though. Elon's wasn't a great idea, in the middle of a suburb.
It's apparent to me that MS has no plans of ever being urban, so the whole Save Jackson thing is dead. So may as well try and continue to prop up some small towns. I imagine a data center would be a pretty big shot in the arm to a place like Carthage. Just the construction traffic alone.
There's so much available land along highways/interstates and near airports where nobody wants to be anyway, due to noise/utilities/rurality/etc. We could intelligently build up those corridors if we wanted do.
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But they also aren't pissed off because of the data center. They're pissed off because xAi is using portable gas turbines instead of waiting until permanent ones are permitted and built. Plenty of people live that close to power plants without complaints because they are built to reduce noise off site. That really should have already been addressed under traditional nuisance law. I get xAi has a lot of money invested, but you can't just make it everybody else's problem while you figure it out. They should have at the least been offering those people thousands of dollars a month to essentially rent their homes from them.
THIS is the real problem here. Data centers in industrial areas, great. Go for it. Data centers next to heavily populated areas? Absolutely not.
Correct. We've established guidelines for data center development in our county. Setbacks, keeping them away from residential areas, and a load of other things I won't bore you with. It's massive money to develop a part of the state that has been largely ignored for decades.
^^ this is prototypical snarky dorn right here. I don’t know why dingo said you’re so thoughtful. Politicians, I guess.
I’m sure they don’t care, but they have a vested interest. They make money off regular joes.
But I assure you those tech people are smarter technically than the average joe. FACT.
Me either but apparently I need to bc they will be a net benefit for society.
Well here I am waiting for the tech leaders to share their brilliant “plan”. What is their pitch to the rest of us whom they are trying to make redundant?
This has been a nice thread with a lot of good discussion. I saw a quote a while back and have thought about a lot since; I think it fits here.
The next great division of the world will be between people who wish to live as creatures and people who wish to live as machines
I would say the biggest risk is a ton of debt (from utility upgrades) and future costs (from abatement) without any taxes to pay for it. But hey, just another bailout, right?
If you ever wonder why bailouts happen, this thread is a good primer.
Unless you're talking about the city of collins or canton or Greenwood or a handful of others, that's going to be an issue for Mississippi Power/Entergy or Cooperative/TVA and their member distribution coops for the most part, not a question for the government. And they are generally going to have some sort of CIAC they demand and have their own security requirements.
There are not future costs from abatement. Abatement is foregone incremental tax revenue. It's not a cost. So there is no "without any taxes to pay for it". Again, state and local governments can (and have) 17ed up deals that left them on the hook for infrastructure investments without adequate security in the event the enterprise goes belly up. It's probably possible to commit to enough infrastructure investment that you come out in the red after the increased ad valorem revenues (I'm not aware of this happening, but if it can be 17ed up, I'm sure there has been a local government stupid or corrupt enough to do this, although I would hope MDA would protect the most unsophisticated counties/munis from themselves.
Explain how you think the bailout is going to happen? You think the state or a county is going to pay a big tech company to keep a data center running just to avoid having an empty building? Or to finish up a project they think is uneconomic? Neither the state nor the local governments have enough money to do that. If they go belly up, they will just go belly up. You think the state is going to pay off bondholders? What exact bailout do you envision happening?
The only real risk is that the state guarantees bonds that fund upfront infrastructure investments with essentially a security interest in ad valorem revenues. You could look at that as a "bailout" of the county, but it would be an agreed upon risk sharing mechanism. That's not a bailout anymore than credit default swaps are. Hopefully the state is getting security from the developers for upfront costs and offering incentives on the back end to avoid taking risk. That's generally the preferred method and I'm not sure deals that are heavy on ad valorem revenue for the county but light on jobs are going to entice the state do move away from it.
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you need to do some research on what an "abatement" is. I think you're referring to a tax exemption. Data centers are paying a fee-in-lieu of ad valorem taxes payment to the counties, cities, schools. It's a state law what the rate for fee-in-lieu of ad valorem taxes is. It's generally about 45% of what full ad valorem taxes would be, if no exemption was applied. Every single business employing more than 25 people can apply for a local tax exemption on county and city ad valorem and personal property taxes and most do apply for one. If one is granted, the county and city get nothing. School districts continue to get their full ad valorem amount. School ad valorem taxes cannot be exempted, unless the company enters into a fee-in-lieu agreement. Schools continue to receive ad valorem taxes that the county and city exempts. It's up to the BOS whether the exemption is granted or not. A fee-in-lieu is different than an applied for exemption. The fee on data centers is enormous for counties, cities, and schools. A $10 B investment is going to bring around $150 MM a year to be split between the county, city, and school district. There's no cost or "bailout" if the business fails. There's no investment by the counties, cities, or schools in the data centers or properties. The investment is 100% made by the private company operating it and building it. The fee simply stops and there's a property there that some other data center company will buy and negotiate their own fee-in-lieu agreement with the county, city, and school. You're extremely misguided on this subject. The property taxes on the property will still be due to the county, city and school, whether the data center is operating or not. Just as a house property taxes would still be due, no matter if an owner filed bankruptcy. Property taxes are not dischargeable in bankruptcy
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Oh you’re a socialist I got it.
Automation has been going on for years. You know what is at more of a risk in the next 50 years? People who write code.
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No, I dont, and i wasn't. You need to do some research as to how not to speak so haughty when you dont actually know what you're talking about.
Abatement is a term also used for clean up of polluted or blighted sites.
Ad valorem taxes and such is not my area, and im not arguing it with you, other than to note that everything is negotiable and these type of projects have a history of barely paying taxes. Also, taxes still being owed in bankruptcy doesnt mean anything if there's nothing to collect. You hella missed the point on that one.
Maybe you should do some research on projects that fell apart and left the community with the tab. You dont sound like you are even aware of it.
"Yes, AI and technology data centers are eligible for substantial property tax exemptions in Mississippi, though these are typically handled at the local level rather than by the state. [1]
Key details of Mississippi’s data center tax incentives include:
- Local Discretion: Under state law (e.g., Mississippi Code § 27-31-101), county boards of supervisors and municipal authorities have the statutory authority to reduce or exempt a data center’s local ad valorem (property) taxes. [1, 2, 3]
- Large Project Incentives: For massive projects with an investment of at least $100 million, the county can grant exemptions of up to 50% of the project's total assessed value. [1]
- Other Tax Breaks: Beyond property taxes, qualified data centers (investing at least $20 million and creating 20 jobs) receive sales and use tax exemptions on computing equipment, software, and utilities through the Mississippi Development Authority. [1]"
Normally, but these are not normal times. And the security may be a backstop/promise from the state.
Im using abatement like the engineer I am, not an accountant. If the project hams up midbuild, its the locality that had to deal with the blighted site.
No, I picture the state having to pick up the tab for site abatement or utility debt due to unneeded upgrades.
Again, if you want a primer of how bailouts happen, see this thread.
Not to this degree, and not to deliver high demand to specific sites. If the project falls through, its an ongoing cost to the utility thats not being paid for.
The person involved with fee in lieu discussions is the one that doesn't know what he's talking about?
It is, but I think remediation would be more typical. Abatement of existing discharges or pollution, remediation for cleanup for a site.
They are literally not negotiable in certain respects. There are restrictions on what portion of ad valorem taxes can be abated under both a fee in lieu agreement and the statutory exemptions available for smaller projects that don't qualify for a fee in lieu agreement.
In Mississippi? I would like to know what data center projects have barely paid taxes. Or what large scale economic incentive packages have left projects barely paying taxes. Nissan certainly got a sweetheart deal. I think Milwaukee Tool got more than would typically be provided just because they were investing in places that don't get many opportunities. You have Stion and KiOR that were awful deals without the benefit of hindsight. I have trouble coming up with a scenario for those that doesn't involve some corruption somewhere. And of course you have the beef plant, which resulted in fraud convictions. But the Meridian data centers were as far as I know all after the fact incentives, not upfront money. The state did take some risk on Continental Tire, but the clawbacks are I believe guaranteed by Continental Tire, and their debt is rated as investment grade.
The point is that anybody that wants to use the property in the future for an economic risk must still pay the back taxes. So unless the property is left polluted or somehow in a state that has no economic value for some other reason, there is still security for the property taxes owed.
Do you think MDA is unaware of these and does not communicate with supervisors of counties where there is a major project in play? Certainly, MDA may not volunteer the option of pushing risk to MDA instead of the county, but why don't you explain what projects fell apart and how the community was left with the tab and how those risks would manifest with respect to data cetners?
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It sounds like you have been burned by a project failing in the past, which obviously sucks. That does happen sometimes. But this country (really most progress in human history) wasn't built on "if the project falls through" or "what if something bad happens?"
Do we need contingencies in place? Of course. But in order to make the type of progress that it seems everyone wants (like faster phones, more data, electric cars, instant access to everything all at once)... well then we're going to have to take a little risk, have a good plan in case something goes wrong and solve any issues that come up, and move forward.
Interesting right? Doubt we'd ever have achieved nuclear dominance if it was left to the public to pick sides. You think nobody wants a data center.....just think about nuclear reactors.
No, I've just paid attention.
Contingencies are often the first casualty of a manic, bubble mindset to build it as fast as possible. Thats a theme that shows thru when this has happened in the past.
About what abatement means, yes.
I did almost use remediation.
...unless the state legislature is involved, right? And guess what......
Not really. If the back taxes are high, it will just sit unused until the state bails it out. Its not like we lack for land, why pick up the tab for all that when there's free and clear land to choose from?
I think there's probably many people in the chain that assume its all good, no need to worry.
People have been complaining about power for a long time.
Add in “going green”, it’s gonna take a long time to catch up. It’s not like we are gonna out pace power needs in the next 5 years.
Also, ai isn’t going anywhere. Neither is the need for data outside of ai.
The internet wasn't going anywhere either. It was still over invested. Ditto houses. Some people never learn......
We did in the mid aughts. There was a housing bubble. Maybe you've heard of it?
This may be answered somewhere down the line, but a “closed loop” system means nothing. At some point, conductivity, some other chemistry, or temperature will mean blowing down the “closed loop” and refilling with fresh water. It’s unavoidable.
Oh i am. We have a housing shortage right now just like we have energy infrastructure needs RIGHT NOW.
Also, AI isn't going anywhere and it shouldn't.
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