There is a critical point being overlooked by everyone in discussion about Monrovia’s data center. If you just look at the noise, the guaranteed utility rate increases, the tax abatements, the potential water issues, and all the other wonderful things that come from these monstrosities, you might miss the REAL forest for the trees.
So take a step back, and behold the largest single financial bubble of all time.
That’s not hyperbole. The amount of money that has poured into this race for AI supremacy has been more than every financial bubble of last 30 years — combined! Bigger than the dot.com bubble, the housing bubble, the NTF/crypto bubble.
Public and private companies, investment firms, asset management companies, banks and private investors are chasing the tech version of Tulip Mania.
And we’ve reached the point all of these bubbles eventually reach, the point where the proponents shout things on television like — “This time it’s different!” “There’s too much money invested for this to go south.”
And like every previous instance, when everyone says it can’t fail, it’s time to get out.
And the smart money is. Behind closed doors, Fortune 500 CEOs are starting to ask the quiet questions like “What’s our Return on Investment with this AI stuff?”
The truth is, no one knows.
In fact, many of these companies are pulling back from their use of AI because it’s actually more costly than just having employees. The promises are large, but the reality is that it’s not quite the replacement for humans that they thought it would be.
There’s also the problem with oversaturation. The amount of data centers being constructed is hundreds of times more than will be needed, even if AI is as widely used in the most favorable predictions.
The companies building these data centers will only be financially successful if they each are the winner of this race. And they all can’t be. A lot of them are going to lose.
Many of these data centers will be empty federal super fund sites in just a few years.
Even now, these companies are having trouble getting financing. Google just offered a ONE-HUNDRED-YEAR BOND in order to bring in more money. No one does that if they’re financially sound. These companies are starting to feel the crunch, and the investor pool is drying up.
But let’s play devil’s advocate. Let’s say everyone on the planet starts using AI for everything they do. And I’m talking about EVERYTHING YOU DO. Let’s say that all of these data centers will actually be used for their intended purpose. Let’s say all that computing power is needed. How long does that last?
What happens in five, or three, or even 2 years when a new chip version, or even a quantum chip is created that lets you have the computing power of an 800-acre data center in a room the size of your bathroom? Farfetched?
Let me ask you how long you’ve had your current phone, or your smart TV? Is there any reason to believe that this form of technology is going to be any different than every other?
Your state and county officials have mortgaged the farm by giving data centers tax abatements. For those of you wondering what an abatement is, it means that these businesses will pay severely discounted sales and property taxes. And our shortsighted officials have given them these abatements — for decades! Most of these sites won’t be functioning as intended in 10 years, let alone 20.
When one part of the tax roll gets a pass, it means that the remaining part — namely you, dear taxpaying citizen — has to pay more. We know that because they sure as hell don’t ever reduce the size of government.
It also affects the valuation of the tax base, meaning property values go up. That’s great if you’re flipping houses, not so much when you get your tax bill and just want to live here in peace.
And since data centers have tax abatements, that tax money has to come from somewhere. That’s where you come in. That’s why Google is bringing a circus to the fair, to make you forget about what’s coming.
The people who give them the tax abatements will tell you that they don’t affect property taxes. That’s a lie. Ask them why they gave tax cuts to them in the first place? Why do the data centers want them? It’s not because it’s a little thing. It’s a way to get the general public to subsidize multi-billion dollar businesses — and it’s a scam.
These things will in all likelihood only be profitable to the tax base for a short time, and your county officials have thrown the baby out with the bath water by giving them tax breaks right from the start.
And finally, you’ll be subsidizing them by your increasing utility rates. You see, the data centers negotiate great rates with the power companies. They buy A LOT of power, so they get the volume discount. You don’t. You pay more to make up for the difference. The unelected board that governs these rate increases just allowed AES to raise rates. And it’s in direct connection to the data centers.
So buckle up, buttercup. It’s going to get rough.
County officials say you won’t be affected. Let’s see where the property taxes and utility rates go over the next few years.
I’m guessing it won’t be down.
Marcus Billings is a Morgan County native and business owner. He recently won the Republican primary for the position of Jackson Township Advisory Board Member.
