Many people are saying a luxury Dubai property developer will blow $20B on US datacenters

At a news conference on Tuesday, President-elect Donald Trump said Dubai-based luxury property developer DAMAC plans to invest $20 billion over an undisclosed period to build datacenters in the US.

After introducing DAMAC chairman Hussain Sajwani, Trump said, “I’m thrilled to announce today that DAMAC will be investing at least $20 billion over a very short period of time in the United States.

“The investment will support massive new datacenters across the Midwest, the Sun Belt area, and also to keep America on the cutting edge of technology and artificial intelligence. He’s very big into the datacenters. And that’s going to be a very hot item in the coming years as you know, with AI, in particular.”

Billionaire Sajwani spoke briefly to express his delight about Trump’s re-election and to review his company’s achievements, including the development of 45,000 luxury units, with another 45,000 planned, in 20 countries, and datacenters in 10 countries. He said the plan is to invest $20 billion, and possibly more if circumstances permit, in datacenters for AI and for hyperscalers.

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According to Trump, the first phase of the project includes datacenters in Texas, Arizona, Oklahoma, Louisiana, Ohio, Illinois, Michigan and Indiana. He added that those investing $1 billion or more can expect to receive expedited environmental reviews so investors don’t get caught up in the “quagmire of environmental regulations.”

The impact of datacenters on the environment has been a matter of ongoing concern, at least until now. Google, for example, recently said that its datacenter emissions are up 48 percent from 2019, and up 13 percent from 2023. This is largely the result of an expanded datacenter footprint to support the intensive computing required to train and operate AI models. AI search queries have been estimated to consume ten times as much energy as traditional search queries.

An International Energy Agency estimate last year anticipates a doubling of global datacenter electricity demand by 2026. And an April 2024 Goldman Sachs analysis [PDF] foresees global datacenter power usage rising from 1.8x to 3.4x by 2030.

According to America’s National Telecommunications and Information Administration (NTIA), there are more than 5,000 datacenters in the US and that number is expected to increase by nine percent annually through 2030.

NTIA says that US datacenters consumed more than four percent of the country’s electricity generation in 2022 and that figure is projected to increase to as much as nine percent by 2030. The 2024 Electric Power Research Institute (EPRI) whitepaper from which that forecast is drawn notes, “While AI applications are estimated to use only 10 percent to 20 percent of datacenter electricity today, that percentage is growing rapidly.”

NTIA, on November 4, 2024, concluded its solicitation for comments from the public “on the potential risks, benefits, and implications of the anticipated growth in the datacenter sector, and the appropriate policy and regulatory approaches to foster sustainable, resilient and secure datacenter growth.”

OpenAI’s response to the request for comments includes a not-unexpected endorsement of datacenters as engines of economic growth.

“We found [PDF] that constructing and operating a single 5GW datacenter could create or support about 40,000 jobs – in construction and maintenance, restaurants and retail, and other industries that would serve the new workers – and contribute between $17 billion and $20 billion to a state’s GDP,” said Benjamin Schwartz, head of infrastructure partnerships and policy at OpenAI.

Negative impacts such as energy consumption and water utilization will require datacenter adaptation and modernization, he said, but insisted the environmental impact “can be mitigated by clean, renewable energy, effective resource management, increased investment, and offset programs…”

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Among labor and environmental groups, there’s less enthusiasm for a datacenter building boom and more concern that Big Tech is exaggerating its commitment to clean energy.

An NTIA comment submitted by Amazon Employees for Climate Justice claims that Amazon, the largest datacenter operator, is misleading the public about its commitment to renewable energy.

“Despite claims that the company has reached 100 percent renewable energy, the reality on the ground is that its datacenters are driving up demand for fossil fuels,” the group said. “Our research shows that Amazon is using creative accounting and an overreliance on low quality renewable energy credits (RECs).

“When we look at the locations in the US where Amazon actually operates its datacenters, we estimate that Amazon only gets 22 percent renewable energy from the local utilities in those regions. And it is investing in datacenter expansion in locations heavily dependent on oil, gas, and coal — like Northern Virginia and Saudi Arabia.”

Amazon did not immediately respond to a request for comment.

The National Parks Conservation Association (NPCA) also expressed concern in its response to NTIA that datacenters have been damaging national parks. “Across Virginia, the exploding datacenter industry is causing numerous environmental problems,” wrote Kyle Hart, Mid-Atlantic region program manager for the NPCS, citing how thousands of acres of green space are being converted to industrial usage and how these issues have arisen in other states too.

Citizens Action Coalition of Indiana (CACI) challenged claims about the economic benefits alleged to follow from datacenter construction.

“Hyperscaler datacenter growth poses unprecedented challenges and risks to utility ratepayers, taxpayers, the environment, economic development, and quality of life in Indiana, as well as for the stability of the global climate,” the group said.

CACI claims that based on rate calculations by Indiana Michigan Power (I&M), the energy used by datacenters would support more jobs if allocated to other industries.

The group said, “the new hyperscaler datacenter customers will create only 0.26 jobs per 1 MW. In comparison, new or expanding I&M customers whose incremental demands were less than 150 MW, the overall jobs created per 1 MW were 15.2 in 2023, 11.3 in 2022, and 96.5 in 2021, or an annual average of 41 jobs per MW. In other words, the same power provided to a datacenter could produce over two orders of magnitude more jobs if it was used in another Indiana industry or business instead.” ®