How Business Insider investigated the true cost of data centers

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Tech companies are spending hundreds of billions of dollars building data centers, racing to power an AI revolution they say will bring broad benefits and enormous profits.
The actual price, though, has never been fully measured. So a team of Business Insider reporters and editors set out to find the true cost of the US data center boom — in water, power, pollution, and tax incentives.
We pulled obscure state records, scoured corporate disclosures, and sought analysis and guidance from government researchers in Virginia and elsewhere. We spoke to engineering specialists who study data centers, including Shaolei Ren at the University of California, Riverside, and Vijay Gadepally of the Massachusetts Institute of Technology. We also spoke to researchers who study incentive packages, such as Kasia Tarczynska of Good Jobs First, a research group that advocates for transparency and equality in public subsidies. And we sought input from companies and industry groups.
The result is the most complete accounting yet of data centers' impact on our environment, economy, and lives.
Here's how we did it.
Data centers can never be without power. Developers build backup generators to provide emergency electricity. Since these generators emit air pollution, they are regulated by state environmental agencies and need permits.
We requested these air permits and applications from 50 states and Washington, DC, asking agencies to search permits using federal industry codes associated with data centers. To confirm state searches were complete, Business Insider cross-referenced permits against company disclosures, news articles, and data from datacentermap.com, Baxtel, and other trade websites.
Some of the permits we obtained were actually for other types of facilities. If public or corporate records confirmed the facility was not a data center, we removed it from our analysis.
We compiled permits for 1,240 existing or planned data centers across the country, the most definitive tally to date. Tracking the year each permit was first issued reveals a construction boom. Until 2010, companies had filed permits for 311 data centers. By 2024, that number had nearly quadrupled.
Often the permit holders are subsidiaries of Big Tech companies, with unfamiliar names like Nova Mango Farms. Business Insider determined the owners using emails, addresses, and other information on permit applications, secretary-of-state disclosures, county databases, and SEC filings.
Business Insider mapped location information from the permits onto the Aqueduct Water Risk Atlas built by the World Resources Institute, a Washington, DC, group that advocates sustainability. The atlas measures a location's relative water stress — the ratio between demand and available, renewable supplies. Business Insider found that 40% of data centers were sited in areas of high or extremely high water stress.
Data centers can use staggering amounts of water. Business Insider requested metered water use records and water supply agreements from dozens of public utility agencies for every data center in areas with extremely high water stress.
Data center water use is a closely guarded secret. Many agencies denied our requests for facility-specific water use or released the records only in aggregate for all data centers in a water utility's service area. In Denver and Colorado Springs, Colorado, utility agencies sued Business Insider to prevent the release of metered water use records. Business Insider prevailed in both lawsuits.
Business Insider found that some of the largest data center facilities were permitted to use more water a day than you might expect nearly 49,000 Americans to use.
Companies also disclose little information on how much power their US data centers consume. Data center power use varies based on factors including the types and frequency of use of servers, cooling systems, and other infrastructure. To account for this, Business Insider calculated a range of estimated annual data center electricity use.
To calculate this range, Business Insider used air permit data to identify the total power-generation capacity of every backup generator at each facility. Companies rarely install generator capacity that is more than twice what a data center consumes — and often they install significantly less than that. So Business Insider, in consultation with experts, conservatively estimated that a data center's maximum electricity use is between half and 80% of its generators' capacity.
A 2024 federal report estimates that across the industry, data centers operate at just 50% of that maximum electricity use level, to avoid straining their equipment. So Business Insider multiplied the low and high ends of its initial range by 50%.
Business Insider's data includes permits for data centers that are not yet built and fully online, and therefore estimates expected electricity use in the near future. If all permitted data centers go online, we estimate, they will use between 149.6 terawatt-hours and 239.3 terawatt-hours a year. Business Insider's low-end estimate is roughly equivalent to the state of Ohio's electricity needs in 2023, and on the high end, is nearly as much power as the entire state of Florida used that same year.
Our estimates are conservative. The low end of our estimate is below the federal report's estimate for data center power use in 2023. The federal report estimates data center power use could reach the upper end of our estimate by 2026.
Business Insider used the range average to identify the 322 largest facilities in our dataset that, according to our estimate, consume 40 megawatt-hours of electricity or more an hour.
An Amazon spokesperson said the methodology "oversimplifies complex data center operations and is based on assumptions that do not account for important differences in how companies build and operate data centers."
Google and Meta did not respond to Business Insider's queries about data center power use estimates, and QTS declined to comment. A Microsoft spokesperson acknowledged that its data centers "do not always run at 100% of their installed capacity."
Nineteen permits across 10 states — including 12 held by Google — have their generator capacity information fully or partially redacted under public disclosure exemptions for trade secrets. Business Insider was unable to estimate the electricity use of these facilities, so our estimate likely undercounts the true total.
The US uses highly polluting fossil-fuel-fired sources for at least 60% of its electricity. Data centers draw power from a wide regional grid, so Business Insider needed to estimate the public health impact attributable to data centers' use of electricity generated from far-away power plants.
The US electricity grid is complex and does not map closely to state boundaries. To model the complexity of the US electricity grid, Business Insider used an Environmental Protection Agency tool called AVERT that splits the contiguous 48 states into 14 independent electricity regions that approximate grid regions.
Using our estimate for data center power consumption, along with US Energy Information Administration data and the AVERT tool, Business Insider calculated the likely share of total power use attributable to data centers in each of these 14 regions. Then, using another EPA tool with the acronym COBRA, Business Insider estimated the public health cost engendered by that share of total electricity-generation-related pollution in each region. Even a careful calculation like this is inherently imperfect, but in the absence of industry transparency about such emissions it provides a rare and well-founded estimate of the health costs of the data center boom.
Business Insider estimated that annual public health costs from electricity generation for data centers could reach between $5.7 billion and $9.2 billion.
Power plants are not the only source of data center air pollution.
The diesel backup generators installed at data centers emit volatile organic compounds, nitrous oxides, sulfur dioxides, and particulate matter — all regulated air pollutants the EPA labels as hazardous to human health. Air permits issued to these facilities set total annual pollutant emission limits that determine how frequently their generators can be used.
Data centers generally run their generators infrequently so emit only a fraction of the pollutants their permits allow. A 2024 report to the state legislature in Virginia — which is home to nearly a third of US data centers with permits — calculated that data center backup generators on average emit 7% of their permitted pollution limits each year. Business Insider used that percentage to estimate each county's air pollutant emissions from data center backup generators.
Business Insider then input these county-by-county totals into COBRA, which models how air pollution emitted in a county affects public health nationwide. The tool assigns a dollar figure to what it would cost to avoid negative health outcomes like premature deaths, asthma attacks, heart attacks, and missed school or work days.
The COBRA tool estimated that air pollutants emitted by data centers across the country could trigger nearly 20,000 asthma symptom cases a year and create a $385 million annual burden on public health.
Generator pollution is more harmful to communities already overburdened by environmental pollutants. A community that already has high levels of air pollution will experience greater negative health impacts from additional pollutants, for example, than a community that isn't already saturated with harmful pollutants.
To better understand their impact on these communities, Business Insider mapped all 1,240 data center locations onto a third EPA tool called EJ Screen that combines census and pollutant data within a mile radius of a specified location. We found that more than 230 data center locations were in communities highly overburdened by environmental pollutants.
Business Insider requested and obtained the most detailed data-center-related economic development deals and annual tax incentive disclosures for facilities in and around Columbus, Ohio. Some of the oldest data center deals in the state are in Franklin and Licking counties, and companies are required to disclose how much they've saved from these tax exemption agreements each year, which made the state a useful case study for judging data centers' actual economic impact. Business Insider tallied these numbers, then used company-reported property investment totals to calculate total state and local sales and use tax savings (7.5% for Franklin County and 5.75% for Licking County).
We did not include personal property tax in our calculations, as Ohio eliminated that tax. Because of fluctuations in the number of jobs employed at data centers, Business Insider also did not include state or local job creation tax credits in the analysis.
We nevertheless found that these tax incentive packages given to tech companies were highly lucrative, amounting to as much as $2 million in tax savings per full time job at a data center.
Reporting: Hannah Beckler, Dakin Campbell, Daniel Geiger, Rosemarie Ho, Narimes Parakul, Adam Rogers, Ellen Thomas
Editing: Jeffrey Cane, Rosalie Chan, Jason Dean, Esther Kaplan, Jake Swearingen
Research: Darren Ankrom, Schuyler Mitchell, Trey Strange, Yuheng Zhan
Design and visuals: Dan DeLorenzo, Isabel Fernandez-Pujol, Jinpeng Li, Kim Nguyen, Randy Yeip, Rebecca Zisser
Photography: Kendrick Brinson, John David-Richardson, Greg Kahn, Brian Palmer, Jesse Rieser
Video: Robert Leslie, Gary Moon, Marco Secci
Copy editing: Mark Abadi, Kevin Kaplan
Read the original article on Business Insider