Schultz: Don’t let data center angst derail Minnesota’s moment to build

In April 2020, tech builder Marc Andreessen published an essay whose title doubled as a challenge: “It’s Time to Build.”

Writing during the first months of the pandemic, Andreessen argued that shortages of medical equipment and supplies and hospital capacity exposed something deeper than a temporary emergency. This country possessed extraordinary wealth, technology and talent, yet struggled to translate those advantages into tangible things at the scale and speed required.

His indictment extended well beyond the pandemic. America did not build enough housing in its most prosperous cities, enough factories to secure critical supply chains, enough energy infrastructure, or enough schools or transportation systems. Projects that were technically possible and economically valuable became trapped in regulation and institutional inertia.

It was a bipartisan “inability to build.” The United States had become better at producing reasons not to build than at producing the things its people needed.

He was right.

We need to seize this moment as a state, starting by welcoming responsible data center investment. It is time to build.

Data centers supply the computing power behind advanced AI systems and the modern economy. The nations that control that capacity will hold an enormous economic and strategic advantage. The same is true for U.S. states.

The Upper Midwest, and Minnesota in particular, is well positioned to compete. We have a cool climate, skilled workers, an abundance of land and communities that need new investment. The projects are an incredible opportunity for electricians, pipe fitters, equipment operators and laborers for years to come while making enormous additions to local tax bases.

The city of Pine Island has said the proposed project there (now temporarily paused due to a baseless lawsuit filed by the Minnesota Center for Environmental Advocacy) would bring more than $20 million in developer-funded infrastructure improvements, tens-of-millions in new property tax revenue and a $25 million fund for local schools over 20 years. For municipalities and school districts struggling with stagnant tax bases, those are huge benefits.

Seizing this opportunity, however, will require political courage. The combination of broadly felt angst about AI and a torrent of misinformation about data centers has left the latter deeply unpopular. Politicians are, ahem, “reevaluating” their previous positions.

Now, Hauschild is running a television ad accusing his opponent of failing to “crack down” on data centers and declaring, “I don’t work for Big Tech. I work for you.”

That is not a profile in courage. It is a profile in polling.

The pattern is national and bipartisan. Pennsylvania Gov. Josh Shapiro celebrated Amazon’s planned $20 billion data-center investment as the largest private-sector investment in his state’s history. As political opposition grew, he removed data centers from Pennsylvania’s fast-track permitting program and imposed new restrictions.

Texas Gov. Greg Abbott last year called Texas the “epicenter of AI development” while celebrating Google’s planned $40 billion investment. This summer, amid mounting opposition, he froze approvals for proposed data centers pending an audit.

The physical infrastructure being built to serve this moment of extraordinary technological change is massive, so it is reasonable for public officials to reassess previous judgments from time to time. What is troubling is the speed with which political enthusiasm evaporates when polling changes.

Water deserves the same honest treatment. Some cooling systems consume meaningful water. Others don’t. The Pine Island proposal would be air-cooled, with no approved industrial water use for cooling. Meta’s Rosemount project plans a closed-loop system that recirculates coolant, reducing water usage. Permit approvals should require transparent water plans, rigorous permitting, recycling and reclaimed water where practical.

We should also understand the international stakes. China is reportedly preparing a nearly $300 billion national AI-infrastructure build-out. There is likely a Chinese-origin influence operation using AI-generated social-media content to attack American data center development. Beijing understands that delaying American infrastructure advances Chinese interests. China is building. America should not unilaterally disarm.

Of course political courage does not mean rubber-stamping every project. Minnesota should protect ratepayers and water, respect local land-use standards, and secure real benefits for, and broad-based approval from, host communities. Then we should reject bureaucratic inertia, judicial interventions or abrupt changes to established tax or other policy. To date we have sent mixed signals on data centers and other development that Minnesota isn’t interested in the benefits of new investment. That needs to change.

The AI revolution will proceed whether Minnesota participates or not. If we say no, the investment, jobs and tax revenue will go elsewhere while China continues building.

Andreessen’s challenge is now Minnesota’s. It is time to build — and time for political leaders with the courage to say so.