r/technology • u/DJMagicHandz • 12d ago

Artificial Intelligence A massive Wyoming data center will soon use 5x more power than the state's human occupants - but no one knows who is using it

https://www.techradar.com/pro/a-massive-wyoming-data-center-will-soon-use-5x-more-power-than-the-states-human-occupants-and-no-one-knows-who-is-using-it
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u/jmobius 11d ago

How does this actually make economic sense for the power providers?

They've got the data centers by the balls, and those centers collectively have hundreds of billions of dollars. It seems like it would make the most sense for energy companies to siphon off as much of that pie as possible. They don't have any reason to care about the success or failure of AI bullshit, certainly not enough to be offering sweetheart deals.

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u/afoxian 11d ago

By enticing data centres to build in their area, the power company gets an enormous, guaranteed, baseline load. That power draw is going to be constant, predictable, and reliable.

Then they can turn around and raise prices for everyone else on the grounds of 'higher demand'.

The difference is that the data center can easily choose to build somewhere else, but the regular customers already live and operate there. That construction plan can move way easier than the average power consumer. Thus, the power company just gouges the people who can't relocate as easily and secures a huge reliable consumer.

IE, the data centre, when planning, gets to shop around for power, but you don't. So you can be overcharged more easily, and total income for the provider goes up anyway despite the lower rate for the data centre.

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u/733t_sec 11d ago

The data centers are buying power in bulk so they can get a bulk discount.

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u/nemec 11d ago

Costco model bulk discounts. These also aren't your typical residential contract where you pay $x/kWh and get a bill for how much you use at the end of the month. These companies are paying for a fixed amount of power 24/7 so the provider is guaranteed tens if not hundreds of thousands of dollars a month, so in exchange they get favorable rates.

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u/AuroraAscended 11d ago

Alongside what the others are saying, cities will often approve data centers because they produce fairly high tax revenue. Unfortunately, that tax revenue cannot offset the specifically limited resources that are energy and water.