Ask the Expert: What You Should Know About Data Centers

Robert L. Mayo, PhD
Research Specialist
Sheila and Robert Challey Institute for Global Innovation & Growth
NDSU College of Business

1. What is a data center, and why do we depend on them every day?

A data center is a warehouse full of computers. When you check the weather on your phone, deposit a check with your banking app, or stream a movie, that work isn't happening on your device. It's happening on servers in a building that might be a thousand miles away. Nearly everything we do online, from email to GPS to the card reader at the gas station, runs through one of these facilities. They're the invisible infrastructure of modern life and most of us never think about them.

2. Why has AI dramatically increased the need for data centers?

The older generation of data centers, built for cloud storage or cryptocurrency mining, was relatively modest. The new AI systems need computing power on a completely different scale. There are roughly 600 “hyperscale” data centers in the US today, more than half the world's total, and the newest announced projects will each draw between one and five gigawatts of electricity. For reference, five gigawatts is more than double the power used by the entire state of Alaska. Facilities that big can't simply plug into the local grid. They need dedicated power generation, land, and sometimes water for cooling, which is why they've suddenly moved from the back pages to the front page.

3. Why have data centers become controversial?

Much of the controversy stems from projects that were built badly, and we have a case study right here at home. In 2022, a developer began building a $1.9 billion data center in Williston. The company placed it 800 feet from the nearest home, even though industrial cooling fans make noise around the clock. The local electrical grid didn't have spare capacity, so the added transmission costs got passed to residents as higher electric bills. And the company barely talked to anyone in town. Neighbors eventually sued over the noise, and in 2023 the Williams County Commission voted unanimously to ask the utility to cut the facility's power. As Aaron Birst of the North Dakota Association of Counties put it, “if somebody had taken a little time to talk to a local, they could have avoided those problems.” That's how data centers earn a bad name: noise next to neighborhoods, strained grids, and companies that treat the community as an afterthought.

4. Can data centers be built responsibly? What separates a well-planned project from one that creates problems?

Yes, and we've already proven it in North Dakota. Contrast Williston with Ellendale, where Applied Digital built a major data center and became a very good neighbor. The company deliberately sited its facility away from homes to head off noise and traffic complaints. It bought

“stranded power,” electricity from local wind farms that exceeded what the transmission lines could carry and would otherwise have gone to waste. That purchase actually cut local electric rates by $5 million in 2023, even as the facility drew about 180 megawatts. And before construction began, the company held open town hall meetings, listened to concerns, and even sent a representative to visit with the local coffee club. So three things separate a good project from a bad one: put the facility away from neighborhoods, plan the power supply so residents' bills go down instead of up, and earn the community's trust before you break ground. A project can meet every technical regulation on the books and still fail. Public support isn't optional. It's the whole ballgame.

5. What opportunities could data centers create for North Dakota?

Enormous ones, if we're smart about it. We have exactly what this industry needs: abundant energy from Bakken natural gas and wind, wide-open land far from dense neighborhoods, and a cool climate that lowers cooling costs. We already offer a sales tax exemption on data center hardware and software, and states compete hard for these projects because they bring construction jobs, permanent operations jobs, and a new tax base. Ellendale shows what's possible: a small rural town landed a major facility and got lower electric bills in the bargain. And because AI infrastructure matters to both the economy and national security, we'd be helping build something the country genuinely needs. The opportunity is real, but so is the lesson from Williston. If we insist that developers pick smart sites, plan their power, and engage our communities from day one, North Dakota can lead this industry.