Doing the data center dance
What’s a data center? … Intel's downsizing continues … And "Project Crystal Land."
What’s the deal with all these data centers coming to Arizona?
It seems like every week there’s news about another company planning to build more data centers. Each time, it spurs more debate about massive projects sucking up water and using as much electricity as thousands of households.
Just last week, an executive at the state’s largest utility, Arizona Public Service, said so many data centers are operating in the Phoenix area that the utility doesn’t have the capacity to power any more of them.
In Tucson, everybody’s talking about Project Blue, which would lead to nearly 300 acres of data centers on the city’s outskirts. Over in Mesa, where 15 data centers have gone up in recent years, they know all too well the benefits and drawbacks of attracting data centers.
But what are we actually taking about here? Do you know what a data center does or why we need them?
It turns out, the answer is in the palm of your hand.
Boom times keep booming
What’s happening in Arizona is a microcosm of the AI boom’s appetite for resources, and that appetite has grown in leaps and bounds for decades.
To understand how we got here, consider that the first electronic computer, ENIAC, built at the University of Pennsylvania in 1946, consumed 150 kilowatts of power and filled an entire room.
Today's data centers consume thousands of times more electricity and occupy entire city blocks.
But they’re so seamlessly integrated into daily life that most people never think about the industrial infrastructure humming behind their smartphone screens.
Every time you hear about a big leap forward in the tech industry — from Facebook to Netflix to cloud storage — it means our collective digital footprint got a whole lot bigger.
The dot-com boom of the late 1990s created the first wave of server farms as pretty much everybody started going online.
Then the iPhone's launch in 2007 unleashed a tsunami of mobile data that demanded ever-larger facilities to store our photos, stream our videos, and sync our lives across devices.
Now it’s artificial intelligence.
But this time, the new tech doesn’t just need more storage, it also needs massive processing power that devours electricity at unprecedented rates.
Siri, how much electricity do you use?
Consider the invisible digital choreography that unfolds each time you ask Siri about tomorrow's weather, upload vacation photos to the cloud, or let ChatGPT polish a homework assignment.
Your voice or text query races to a data center, where servers process natural language, cross-reference weather databases, and beam back a response.
Those vacation photos don't just vanish into the ether. They're stored on physical drives in climate-controlled warehouses, backed up across multiple locations, and made instantly accessible whenever you want to relive that sunset in Sedona.
As the debate continues over whether Arizona should welcome more data centers, the fact is there needs to be infrastructure if we want to keep all the amenities that the modern tech boom has brought us.
And infrastructure means data centers.
While it's perfectly legitimate to debate whether these hulking facilities belong in drought-stricken expanses like much of Arizona — where every drop of water counts — they have to operate somewhere or our digital world will stop spinning.
Hey, ChatGPT, who owns all these data centers?
Adding another layer of intrigue to the data center debate, these projects aren't always owned by homegrown giants like IBM anymore.
In a very real way, foreign capital is reshaping Arizona’s economy, and environment. And that makes some people uneasy.
So far, we haven’t seen nearly as much public comment about foreign-owned data centers sucking up water as we have about a Saudi firm pumping groundwater to grow alfalfa for cattle on the other side of the planet.
But that debate might be on the horizon.
Take SoftBank, the Japanese investment conglomerate led by Masayoshi Son.
Last month, Son unveiled an ambitious $1 trillion plan for an AI and robotics industrial hub called "Project Crystal Land" in Arizona, potentially near Phoenix to leverage proximity to TSMC's chip fabs.
While the figure is aspirational and tied to securing partners and approvals, it underscores the global stakes at play.
Masayoshi Son is one of the leading investors in the AI industry.U.S. companies also are making big investments in data centers in Arizona.
Microsoft is a prime example. They invested millions of dollars in Goodyear over the past few years and now they’re expanding their footprint with data centers, which generate hundreds of jobs and bolster the West Valley’s tech ecosystem.
Then there's Meta, which flipped the switch on its $1 billion facility in Mesa earlier this year. They’re touting sustainability features like advanced cooling, but they’re still drawing scrutiny for their water use.
These developments bring undeniable perks, like property tax revenue that funds schools and roads, and job creation in a high-tech sector. But there are still tradeoffs.
On one side, the influx promises economic boosts and innovation hubs. On the other side, it raises questions about grid reliability, with APS projecting a 40% increase in peak load by 2031 that could require substantial upgrades (which would probably come at ratepayers’ expense).
In the meantime, Tucson officials are still trying to figure out what to do about the proposed data center, APS executives are floating the idea of building nuclear reactors, and Mesa officials are dealing with irate residents at public hearings.
Winning and losing: TSMC is experiencing a booming market for its microchips, many of which are manufactured in Arizona and power the AI industry, the Phoenix Business Journal’s Greg Barr reports. The company reported $9 billion in sales last month, which was 27% higher than last June. Over at Intel, another big-time chipmaker, they’re struggling to keep up with TSMC on AI chips and just quadrupled the number of employees they plan to lay off in Chandler, the Republic’s Sasha Hupka reports.
Powering up: Westinghouse is planning to build 10 large nuclear reactors, the company announced at a high-profile summit on energy and AI in Pittsburgh this week, CNBC reported. Utility companies in Arizona announced earlier this year they plan to build nuclear power plants to meet growing demand. At the roundtable this week, President Donald Trump praised companies like Google, private equity firm Blackstone, and the AI cloud company CoreWeave for investing $90 billion in data centers and other AI-related projects in Pennsylvania, the New York Times reports.
New plan incoming: The Trump administration, which removed most of the guardrails on using AI for government tasks, is expected to release an AI plan this month, the Washington Post reports. Trump officials, including former tech consigliere Elon Musk, have pushed for AI to be used for everything from air traffic control to managing tax audits.
Drone warfare: AI is changing how countries wage wars, notably in Ukraine and Gaza. It’s also raising concerns among U.S. military officials that their decades-long drive for more sophisticated, but fewer, weapons is going to put them at a disadvantage when AI-powered drones from China flood the skies over Taiwan, The New Yorker’s Dexter Filkins reports.
New rules incoming: California’s court system is set to decide how to handle AI in the judicial system, which could include banning it altogether, Reuters reports. California is following Arizona’s court system and other states, like Illinois and Delaware, that already adopted rules for AI. In California, their main concerns are confidentiality, privacy, bias, and security, such as prohibiting court employees from entering confidential information into public generative AI systems.
Keeping Fido clean: AI keeps popping up in unlikely places. Last week, it was a dog groomer in Phoenix, AZFamily’s Mitchell Koch reports. Paws 48 Dog Wash and Gym now features an AI-powered dog wash fitted with sensors, cameras and temperature gauges to make sure the dog stays safe and gets a good cleaning.
From drone wars to dog washes, AI is the next big thing. Keep track of it all by subscribing to the AI Agenda.
Speaking of that Softbank investment in Arizona, the head of the investment conglomerate is a key player in the future of AI.
Masayoshi Son
Who is he?
SoftBank founder: Son started SoftBank in 1981, growing it into one of the world’s biggest tech investment holdings and a pivotal force in shaping the global technology landscape.
Vision Fund architect: He created the $100+ billion Vision Fund, which has pumped huge capital into AI, robotics, fintech, and internet companies, including Uber, ARM, and ByteDance.
Deal-making legend: Son’s bold bets (and a few flops) are legendary — he famously invested $20 million in Alibaba, yielding one of venture capital’s greatest windfalls.
Fun facts
Risk-taker: Son once lost nearly all his net worth in the dot-com crash, but rebuilt SoftBank by going all-in on next-gen tech.
AI evangelist: He’s a relentless believer in artificial intelligence, robotics, and a future where machines outnumber — and outthink — humans.
Arizona ambitions: This year, Son proposed “Project Crystal Land” — a $1 trillion mega-park in Arizona dedicated to AI and robotics, potentially drawing giants like TSMC and Nvidia to the desert.
Why you should know him
Tech catalyst: Son’s Vision Fund has reshaped whole sectors — his dollars and decisions help decide which technologies go mainstream.
Crystal Land dreamer: If his Arizona mega-hub goes forward, it could make the Southwest ground zero for the next wave of AI breakthroughs.
Go-big-or-go-home style: Love him or loathe him, Son’s all-in philosophy and timing make him one of tech’s most consequential — and unpredictable — figures.