Tuberville Backs Hyperscale Data Centers In Alabama

While Alabamians who are rising up against hyperscale data centers are expressing concern that they don’t want “Alabama to be the Wild West for industrialization”, the Republican gubernatorial candidate, Tommy Tuberville, has strongly backed the construction of hyperscale data centers throughout Alabama the Beautiful in his rhetoric the past couple of days. For Coach Tuberville stated on Monday at a Sheriff’s conference that, “"Everybody asks, 'How do you do that?' I've talked to several groups — I've talked to fire chiefs, police chiefs. Here's how you do it: we've got to grow our state, but one of the big things that's bringing in a lot of tax money across this country is these data centers, and everybody has heard about them, you know, 'Big Tech' and all that. You can forget about doing away with it because it's coming. Everybody says, 'Well, AI is going to do away with jobs." It's going to create jobs as well as do away with jobs, but you've got to have data centers."

Tuberville further affirmed his notion of the alleged benefits of data centers by stating that, "I think there's 27 states that have already said, 'Oh, we're not going to build data centers. We're not going to do that. It makes too much noise. It's going to ruin the climate.' Bull crap.’ I mean, they're listening to all this nonsense they see on social media that's coming from China because China does not want us to grow. The state of Alabama will grow. We're going to do data centers. It will help you tremendously. The tax money that comes from those things is unbelievable for schools, for law enforcement, for anything that's done. We're not the richest state in the country, but I'm telling you we're fixing to make a big move on it. I like winning championships. I like winning. I do not like losing, and we're not going to lose. A lot of that comes with being able to grow the state in the way that it needs to be grown to make sure that we're ahead of the times."

Curiously enough, the alleged tax benefits that Tuberville references in his backing of hyperscale data centers is a matter of debate. For many of those hyperscale data centers are lured to the state via tax abatements that last for multiple years which tend to cause the communities subjected to those hyperscale data centers to lose millions in revenue and heavily strain local utilities in the process. Typically, there are three types of taxes that apply to hyperscale data centers: property taxes, sales taxes, and income taxes. Of note when it comes to paying Uncle Sam every April 15th, hyperscale data centers often do not pay any income taxes. As data centers only pay corporate income taxes if they actually generate some type of revenue. Since data centers mainly house servers and don’t sell any goods or services, they don’t often generate direct operating incomes. In fact, many hyperscale data centers are used not to pay corporate income taxes, but to lower the tax liability of their parent companies, since they are counted as business expenses.

If data centers pay any taxes it all, those taxes fall under the category of property taxes. Since hyperscale data centers house pricey servers, networking gear, and cooling systems, they are assessed at a high level for local property tax valuations. Those property taxes in some areas do contribute a significate percentage to the local county revenue wherein they are housed. However, due to the severe strain on the local power grid, said revenue comes at a steep cost. With some areas, such as the ComEd territory in Northern Illinois, reporting that, “If all the projects in our pipeline come to be and they all reach their maximum, requested demand will more than double our system peak it took us 120 years to achieve, roughly by 2040.”

While Tuberville insists that any opposition to the construction of hyperscale data centers throughout Alabama stems from false information coming from China, Alabamians are insisting that their opposition to data centers doesn’t arise from a foreign government. But rather concern that they don’t want “every open field, forest, and stretch of rural land” turned into hyperscale data centers. For in Alabama, “land is more than empty space. It’s family farms that have existed for generations. It’s rolling countryside, pine forests, winding rivers, and the natural beauty that make the Heart of Dixie feel like home.” With concerned Alabamians emphasizing that the concerns over hyperscale data centers are due to their massive energy demand, the immense pressure on the local water resources, and the loss of open land and wildlife habitat. Some folks in Alabama also express concern over the ability of hyperscale data centers to be turned into surveillance centers. With the secrecy behind the nondisclosure agreements that are signed in the development contracts for the hyperscale data centers raising eyebrows, as well.

In fact, recently, Circuit Judge Javan Patton Crayton in Jefferson County, ruled that a lawsuit filed by residents of Alabama in Oxmoor Valley against the Nebius data center under construction off of Lakeshore Parkway can proceed. With the judge finding that how the city approved the project is a legal question for the court to decide. Residents of Alabama are also trying to get a preliminary injunction to stop the construction being done on the site of the Nebius hyperscale data center.

Tuberville’s decided backing of the construction of hyperscale data centers throughout Alabama has prompted the Democratic gubernatorial candidate, Doug Jones, to issue a statement regarding the water draining entities. While in his statement former U.S. Senator Doug Jones doesn’t fully commit to an outright ban of the centers from Alabama, he does call for a temporary moratorium until the issue is fully examined. With Jones stating that, "Alabama is not a dumping ground for every data center looking for a rubber stamp. People deserve transparency before deals are cut, not after construction starts. This is about the health, safety, and quality of life of the families who live there. That’s why we need an immediate moratorium until Alabama has a real statewide plan. I’d ban non-disclosure agreements between developers and local governments, and require every approved project to have an independently funded community advisory board with the resources to hold these companies accountable.”

Recently, New York passed the USA’s first statewide moratorium on new hyperscale data centers. So, Alabama becoming a “dumping ground” for hyperscale data centers is actually a possibility that even the President of The United States, Donald J. Trump, has referenced. With the President posting on his social media account that the hyperscale data centers are looking to move out of the Empire State and relocate to “Alabama, Florida, Texas, Arizona, and many other states.”

Opinions expressed are those of the author and do not necessarily reflect the views of the Alabama Gazette staff or publishers.