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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Today, we're headed to Fayetteville, Georgia, just south of Atlanta,

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Speaker 2: and our first stop is the Hopeful Primitive Baptist Church.

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Speaker 2: This small, one room chapel has been standing for two

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Speaker 2: hundred years.

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Speaker 3: When you walk in that door, you feel the history.

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Speaker 3: I mean, you can see the top hats and tails,

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Speaker 3: you can see the regalia of the time. You can

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Speaker 3: see the horses in the in there in what is

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Speaker 3: now the parking lot.

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Speaker 2: Scott Johnson is the pastor there and a longtime resident

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Speaker 2: of the area.

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Speaker 3: It's close enough to the city to be close enough

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Speaker 3: to the city, but far enough away to be far

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Speaker 3: enough away. We love Fayetteville and it's a very special place.

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Speaker 1: Yeah, you know, it's a small town. For a long time,

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Speaker 1: it's been a bedroom community, a lot of people commuting

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Speaker 1: to Atlanta, you know, working for Delta. People choose it

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Speaker 1: because it's because it's pretty a nice, quiet town.

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Speaker 2: Bloomberg reporter Josh Saul covers energy and that's what drew

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Speaker 2: his attention to Fayetteville, along with another one of our colleagues,

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Speaker 2: Don Lim.

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Speaker 1: And then the reason we're interested in it is that

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Speaker 1: Blackstone came knocking.

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Speaker 2: Blackstone, the world's largest private equity firm.

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Speaker 1: And Blackstone's data center development firm QTS decided that this

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Speaker 1: town in Georgia was a good place to build a really,

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Speaker 1: really big data center. And data centers are the thing

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Speaker 1: that underpin our modern technological lives. When I text a

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Speaker 1: gift to my wife, when you have a baby and

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Speaker 1: the doctor runs a bunch of tests, or if you

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Speaker 1: use chat GPT, all of that runs through data centers,

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Speaker 1: and there's a lot of money in them. Big gold

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Speaker 1: rush to build as many data centers and people pay

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Speaker 1: you to be in them.

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Speaker 2: Big tech companies in particular have been signing long term leases.

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Speaker 2: They've been building their own data centers and even exploring

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Speaker 2: the possibility of nuclear energy production to make sure there's

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Speaker 2: enough power to run all the data centers they'll need

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Speaker 2: in the future. At first, Fayetteville was excited to cash

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Speaker 2: in on this piece of the AI gold rush. That is,

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Speaker 2: town residents started to grasp how much power a data

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Speaker 2: center would need to operate.

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Speaker 1: Where people who live in the town really started noticing

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Speaker 1: that this was coming was when the local power company

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Speaker 1: started coming around and saying, we're going to need to

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Speaker 1: build a big power line to get electricity to the

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Speaker 1: data center, and the power line's going to need to

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Speaker 1: come through your yard.

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Speaker 2: That was the message to more than one hundred homes

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Speaker 2: and private properties, including the Church of Scott Johnson, the pastor.

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Speaker 3: These are not just regular street power line polls that

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Speaker 3: you think of. These are massive, high energy, high frequency

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Speaker 3: power lines. And so they're going to be draped on

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Speaker 3: two sides of our property up along New Hope Road

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Speaker 3: and across the intersection right at our corner. So on

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Speaker 3: two different corners, we will be draped with these invasive,

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Speaker 3: ugly monstrosities.

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Speaker 2: I'm David Gura, and this is the big take from

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Speaker 2: Bloomberg New Today on the show Not in My Backyard,

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Speaker 2: the Data Center Edition. What American demand for data centers

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Speaker 2: means through the communities across the country where they're built,

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Speaker 2: the companies that invest in them, and are power consumption.

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Speaker 2: The town of Fayetteville, Georgia, had been trying to get

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Speaker 2: a data center because of the tax revenue that would

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Speaker 2: come with it, So at first, landing a big data

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Speaker 2: center developer like QTS seemed like a big coup for

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Speaker 2: the community. QTS has data centers all across the US,

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Speaker 2: and claims to be the fastest growing data center company.

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Speaker 2: Microsoft soon expressed interest in the Fayetteville data center. In Bloomberg'

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Speaker 2: Josh Saul says Fayetteville had a lot to offer.

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Speaker 1: One of the big reasons is that Georgia Power, the

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Speaker 1: power company there, is good at providing power. It's what

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Speaker 1: they do, so the electricity is relatively cheap, it's very reliable,

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Speaker 1: and there's open land.

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Speaker 2: We're going to talk about the amount of power that

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Speaker 2: these things need, but maybe we could talk about what

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Speaker 2: they look like physically first. How big is a data center,

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Speaker 2: a modern data center?

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Speaker 1: I guess the simplest way to say is that they

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Speaker 1: are huge. You could think of two walmarts stacked on

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Speaker 1: top of each other with no windows. The ones that

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Speaker 1: have been inside recently are relatively small, maybe a tenth

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Speaker 1: the size in terms of energy consumption as this one

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Speaker 1: in Georgia, and when you're inside them, they are still enormous,

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Speaker 1: you know, just huge, huge rooms. You could play a

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Speaker 1: sick game of paintball in there, and just really really big.

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Speaker 1: And in parts of the country, like in northern Virginia,

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Speaker 1: when you drive through, you drive through areas that are

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Speaker 1: just all data centers, So you just drive by them

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Speaker 1: for a while and there's just data center after data center,

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Speaker 1: and there's some slightly different architectural elements, and they're oriented

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Speaker 1: in different directions, but they all look roughly the same

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Speaker 1: and all have the same small parking lots with you know,

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Speaker 1: a couple of techs or a couple of prospective clients

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Speaker 1: parked there.

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Speaker 2: How different are the data centers that are being built

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Speaker 2: today from ones that we were seeing being built, you know,

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Speaker 2: five years ago, ten years ago. What sets them apart

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Speaker 2: from what we've seen in the.

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Speaker 1: Past, right, Well, they're just a lot bigger and a

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Speaker 1: lot more powerful. I mean you talk to old gues

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Speaker 1: in the industry and they're kind of like, yeah, I

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Speaker 1: mean when I started out, we had a data center

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Speaker 1: in our office, it was just called the computer room,

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Speaker 1: and it was just a room that had a couple

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Speaker 1: of computers on it, and at that point that was

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Speaker 1: enough to hold the whole office's technology. Now that is

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Speaker 1: definitely not the case. So yeah, the simplest way to

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Speaker 1: answer it is the way that data centers have changed

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Speaker 1: is that they continue to get bigger, they continue to

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Speaker 1: get more powerful, and they continue to take on new tasks.

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Speaker 1: Now AI is starting to just be a part of

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Speaker 1: our everyday life. And all of that runs through data

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Speaker 1: centers like the one in Georgia that we're talking about,

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Speaker 1: but also like the ones in northern Virginia or in

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Speaker 1: the deserts of Arizona, or Ireland or Singapore or kind

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Speaker 1: of any of these other places we're talking about.

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Speaker 2: How should we think about the amount of power that

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Speaker 2: these data centers require.

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Speaker 1: It's so much power this one data center in Georgia

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Speaker 1: is going to use over giggle weep. I mean, you've

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Speaker 1: ever seen the Simpsons that whole nuclear plant. Mister Burns

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Speaker 1: never said exactly how what its capacity was, but that

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Speaker 1: nuclear plant. Imagine that whole thing powering just one big

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Speaker 1: data center.

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Speaker 2: I mean, that's astonishing.

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Speaker 1: It's really a lot of power. It surprises you because

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Speaker 1: for a long time in the US, power demand was flat.

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Speaker 1: You know, even as people built more houses, things got

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Speaker 1: generally a little more efficient, and power demand would creep

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Speaker 1: up by one or two percent a year. It was

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Speaker 1: just just a very slow, very sleepy industry. That has

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Speaker 1: definitely changed. People and our economy just need a lot

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Speaker 1: more electricity than they used to. So we went from

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Speaker 1: that really slow load growth to just this kind of

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Speaker 1: hockey stick projection that we're seeing now. I mean, some

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Speaker 1: analysts I talk to compare it to you know, we

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Speaker 1: haven't seen this kind of change in our energy systems

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Speaker 1: in the US the amount of electricity we use since

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Speaker 1: World War Two.

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Speaker 2: The US Department of Energy estimates that growth in electricity

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Speaker 2: usage by data centers has tripled over the last decade,

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Speaker 2: and it expects that growth to double or triple again

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Speaker 2: in the next three years. Josh, how wide is the

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Speaker 2: gap between the need what these data centers need in

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Speaker 2: terms of power and what these utilities are able to provide.

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Speaker 1: Well, the utilities are pretty happy about building a lot

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Speaker 1: more generation, and that's really changed the outlook for some

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Speaker 1: of these companies because instead of what we saw a

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Speaker 1: few years ago in terms of they were going to

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Speaker 1: be building more clean energy, shutting down their old coal

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Speaker 1: plants and building little or no new gas plants, now

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Speaker 1: they're sort of, WHOA, We're not going to shut down

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Speaker 1: our old coal plants. We need to build a lot

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Speaker 1: of new gas and we're going to build new clean

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Speaker 1: energy also. But it's completely changed the generation plans for

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Speaker 1: these companies.

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Speaker 2: Can you just talk a little bit about the investment

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Speaker 2: that's flowed into these data centers.

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Speaker 1: Yeah, I mean Blackstone Bough QTS and twenty twenty one,

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Speaker 1: they turned it into the fastest growing US data center landlord,

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Speaker 1: and it now makes a lot of money for them.

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Speaker 1: You know, they have a footprint right now that's got

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Speaker 1: roughly fifty billion dollars in data centers, and there's another

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Speaker 1: fifty billion of you know, prospective data centers perspective developments

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Speaker 1: in the pipeline. So it's a huge operation.

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Speaker 2: In something it sounds like Lackstone, and I'm sure others

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Speaker 2: are very committed to. They see this as being an

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Speaker 2: opportunity now and certainly one into the future.

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Speaker 1: Yeah. I means alone now has something like two and

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Speaker 1: a half gigawatts of signed power capacity, meaning that's data

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Speaker 1: centers with that much power that are signed to flow

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Speaker 1: into them. Their goal is to have more like six

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Speaker 1: gigawats as aiming towards and for capacity, I mean that's

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Speaker 1: more electricity than is used by the city of Miami.

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Speaker 2: After the break, Fayetteville residents and city officials were surprised

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Speaker 2: by the amount of power their new neighbor is going

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Speaker 2: to require. And that is when the backlash started. That

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Speaker 2: data center in Fayetteville, Georgia is now under construction on

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Speaker 2: six hundred acres. When it's finished, ten hulking bunkers will

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Speaker 2: hold thousands of computers, and Bloomberg's Josh Saul says it's

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Speaker 2: expected to consume as much electricity as about a million

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Speaker 2: US households. A million households, Well, that figure came as

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Speaker 2: a surprise to some people in Fayetteville.

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Speaker 1: Town officials sort of assumed, I mean, like a new

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Speaker 1: super market or a new house, it's just going to

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Speaker 1: plug into our current electric rid. They did not know

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Speaker 1: that it was going to take massive new power lines.

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Speaker 2: And is that simply a lack of people in that

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Speaker 2: town doing their due diligence or has he been reporting

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Speaker 2: on this in other communities? Is this perhaps common?

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Speaker 1: Well, it was a little hard to suss out. Local

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Speaker 1: officials told my co writer Don Lim that it was

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Speaker 1: their understanding or they were told by the companies that

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Speaker 1: the local infrastructure was sufficient, that yep, what's here is fine,

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Speaker 1: nothing new needs to be built. People close to QTS

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Speaker 1: told us that what they said to local officials was

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Speaker 1: based on what Georgia Power told them. And then when

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Speaker 1: we went to Georgia Power. Georgia Power said that transmission

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Speaker 1: planning is a long process and they don't disclose confidential

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Speaker 1: client information to town officials. So, I mean, that's all

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Speaker 1: very complicated. But what it boils down to, at least

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Speaker 1: from the stance from the viewpoint of homeowners and town officials,

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Speaker 1: was that they did not know this big transmission line

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Speaker 1: was going to be needed until the deal was basically done,

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Speaker 1: and there were Georgia Power workers knocking on people's doors

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Speaker 1: saying they wanted to buy an easement through their property.

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Speaker 1: That's the point when TANN officials found out, oh kind

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Speaker 1: of package up with this deal is going to be

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Speaker 1: a huge new transmission line that's really going to change

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Speaker 1: the face of our town.

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Speaker 2: The power lines were set to encroach on more than

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Speaker 2: one hundred properties and houses.

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Speaker 1: I mean, nobody likes a big transmission line coming through

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Speaker 1: their property. You know, sometimes when I'm working on this

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Speaker 1: kind of story, I think about the house I grew

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Speaker 1: up in Alaska, and like, if a big transmission line

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Speaker 1: was built right through the view in front of the

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Speaker 1: house that my mom and dad built with their hands,

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Speaker 1: you know, it's like that doesn't make anybody happy. That's

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Speaker 1: roughly the reaction that people in Fayetteville had is like, no,

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Speaker 1: I don't want even for ten grand or one hundred grand. No,

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Speaker 1: I don't want to sell you an easement for a

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Speaker 1: massive power line to come through where I like to

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Speaker 1: you know, watch deer. But underneath all of that was

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Speaker 1: sort of the understood truth that this was a David

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Speaker 1: versus Glad situation and the power line was coming. And

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Speaker 1: people are also scared of eminent domain, which is rarely used,

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Speaker 1: but kind of is you know, underpins all these negotiations,

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Speaker 1: which is, you know, if there's a few holdouts along

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Speaker 1: the path of an important piece of public infrastructure like

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Speaker 1: a highway or a power line, you know, a company

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Speaker 1: like Georgia Power can go to court and can get

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Speaker 1: the right to buy the land and buy the easement

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Speaker 1: by force. So yeah, people were you know, protesting and unhappy,

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Speaker 1: but they, I think at some point understood that the

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Speaker 1: power line was coming.

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Speaker 2: Josh, what did those homeowners tell you about their response

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Speaker 2: when they started getting those knocks on doors?

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Speaker 1: Yeah, well, kind of right from the beginning, there were

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Speaker 1: some some ring leaders or some organizers, and people would

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Speaker 1: get together and talk about, well, if none of us

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Speaker 1: sell out, then the power line won't come through here

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Speaker 1: and maybe it'll have to go somewhere else, or maybe

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Speaker 1: they'll they won't build this data center after all. There

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Speaker 1: was even a group of people who went to one

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Speaker 1: of the meetings held by the regulators Halloween's to everyone,

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Speaker 1: the state commission that regulates utilities like Georgia Power. We

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Speaker 1: do have some folks signed up for a public comment

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Speaker 1: and they went there to speak before the regulation saying like,

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Speaker 1: we don't want this thing here Ross. We and the

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Speaker 1: community are extremely upset, which is why we are here

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Speaker 1: today appealing to you to police help us commissioners. These

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Speaker 1: people are being asked to do is destroy the value

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Speaker 1: of their property and they're only serving one customer, the

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Speaker 1: data set, so there was a lot of resistance.

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Speaker 2: One home owner told Josh and his co reporter that

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Speaker 2: Georgia Power first offered only twenty eight hundred dollars for

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Speaker 2: an easement on her property. Months later, that offer came

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Speaker 2: up to around one hundred and forty thousand dollars, but

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Speaker 2: she still felt like that wasn't enough to make up

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Speaker 2: for what she thought it would do to her home value.

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Speaker 1: We talked to some appraisers for the story, and one

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Speaker 1: told us that the range that big power lines can

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Speaker 1: drop a property's value can be, you know, ten to

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Speaker 1: thirty percent. It can be higher in rural areas because

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Speaker 1: people are in those areas because they value that quiet,

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Speaker 1: those pretty lanes.

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Speaker 2: After the community backlash, some locals claim there were adjustments

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Speaker 2: to the power the power lines, including moving one of

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Speaker 2: the power lines farther away from Pastor Scott Johnson's church.

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Speaker 2: Georgia Power, owned by Southern Company, disputes the power line

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Speaker 2: would have been on church land and said it engaged

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Speaker 2: with dozens of property owners and residents to work to

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Speaker 2: address their concerns. QTS said it had no input on

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Speaker 2: the location of power infrastructure, but even with the lines

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Speaker 2: now across the street, Pastor Johnson still is not happy.

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Speaker 3: We all appreciate electricity. We're not trying to be bad neighbors,

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Speaker 3: but we don't want you to be a bad neighbor either.

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Speaker 3: Simply bury the lines, that's all we ask, and it

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Speaker 3: has been ignored. They said it would cost too much,

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Speaker 3: so you know it's costing homeowners. We know it looks

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Speaker 3: like it's happening, and we've resigned ourselves to that likelihood.

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Speaker 3: We still would like to hope that that one of

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Speaker 3: the rocks in our sling will find the forehead and

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Speaker 3: they will break and say, you know, let's bury the lines,

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Speaker 3: do the right thing.

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Speaker 2: Josh, let me ask you about the other side of this.

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Speaker 2: So what has QTS said about what protesters have alleged

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Speaker 2: and what if they said about just the benefits of

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Speaker 2: building this data center and sort of the effect it

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Speaker 2: might have on this community.

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Speaker 1: I mean, QTS makes the very fair point that these

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Speaker 1: data centers are in huge demand. QTS is not creating

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Speaker 1: the demand we all are with our phones and with

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Speaker 1: the companies that we use. And I don't know, he's

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Speaker 1: like all parts of our technologically driven world or AI,

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Speaker 1: but I mean it's all around us. So QTS would

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Speaker 1: say that they're fulfilling a need, like there's data centers

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Speaker 1: that are going to get built. There's companies and people

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Speaker 1: that want to fill them. And they would also make

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Speaker 1: points about town officials wanted a data center here, and

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Speaker 1: they would also make points about, you know, the tax

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Speaker 1: revenue of having a data center in your town. I mean,

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Speaker 1: I think the first year that QTS operates this data center,

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Speaker 1: it's going to throw off enough tax revenue just for

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Speaker 1: the school board for the equivalent of half a dozen

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Speaker 1: teacher salaries. So I mean, I think, as I do

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Speaker 1: this kind of reporting, I think a lot about these balancing,

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Speaker 1: balancing these different desires. And I mean, I like green spaces,

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Speaker 1: I like going for walks with my kids. I like

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Speaker 1: having woods and being able to walk through them. But

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Speaker 1: you know, I also like the idea teacher salaries, and

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Speaker 1: I like the idea of the US being a technological leader.

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Speaker 1: So it's just hard. It's hard to balance all these things.

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Speaker 2: As we noted, the data center boom is being propelled

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Speaker 2: in part by consumer and business demand for AI, which

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Speaker 2: needs massive amounts of computing power. But the release of

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Speaker 2: China's deep Seek AI model did raise some questions over

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Speaker 2: whether all this computing power is really needed, And this

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Speaker 2: week there was one sign that companies might be rethinking

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Speaker 2: their own power demands. T. D. Cowen reported that Microsoft

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Speaker 2: had canceled some leases for US data center capacity. This

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Speaker 2: is the Big Take from Bloomberg News. I'm David Gura.

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Speaker 2: This episode is produced by Alex tie. It was edited

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Speaker 2: by Tracy Samuelson and Kara Wetzel. It was fact checked

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Speaker 2: by Adriana Tapia and mixed and sound designed by Alex Segura.

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Speaker 2: Special thanks to Don lim Our Senior producer is Naomi

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Speaker 2: shaven Our, Senior editor is Elizabeth Ponso. Our Executive producer

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Speaker 2: is Nicole Beemster. Bor Sage Bowman is Bloomberg's head of podcasts.

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Speaker 2: If you liked this episode, make sure to subscribe and

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Speaker 2: review The Big Take wherever you listen to podcasts. It

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Speaker 2: helps people find the show. Thanks for listening. We'll be

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Speaker 2: back tomorrow