What Are Data Centers and Why Does America Need $500 Billion Worth of Them?
I'd originally written this article to run last week, but then DeepSeek burst onto the scene and it was all anyone wanted to discuss. So, I let this article marinate in my drafts folder.
Then, over the weekend, OpenAI launched their o3 reasoning model, (seen as a response to DeepSeek.)
I'm still running tests on the o3 model, working on an article for Friday about how writers can use reasoning models. I let o3-mini-high take a stab at this article, but the results were uninspired. (Reading the “reasoning flow” is entertaining, though.) So, it was back to my human brain to get the article done, with some prose polish from Claude Sonnet.
Only a week has passed yet the topic of data centers seems almost dated now.
The Stargate Project: America's Massive New Investment
Project Stargate was announced on January 21st, 2025. According to OpenAI, one of the partners in the project, Stargate aims to “invest $500 billion over the next four years building new AI infrastructure for OpenAI in the United States.”
Five hundred billion dollars.
Let's pause for a moment and imagine what that kind of investment could do if we directed it elsewhere.
Picture a struggling neighborhood in Detroit, Chicago, Cleveland, or Baltimore.
For the sake of easy round numbers, let’s imagine the local high school has around a 50% graduation rate. The building is decades old, teachers turn over frequently, and many students face challenges far beyond academics.
But imagine if we took that $500 billion and invested it in transforming these communities. Not with half-measures or band-aid solutions, but with comprehensive, generation-changing investment.
Let's dream big.
After all, our tech bros decided they wanted to invest $500B in the future of America. I’m just imaging a different sort of “dream” than the one they put forth. Indulge me for a few paragraphs.
We could create a "Birth to College" pipeline in these communities, starting with home visits from nurses and early childhood specialists for every new parent. By age three, every child would have access to high-quality early learning centers staffed by educators earning professional salaries - not daycare, but sophisticated learning environments with low student-teacher ratios and curriculum designed by child development experts.
The K-12 schools would be unrecognizable from their current state. Picture modern campuses with plenty of natural light, state-of-the-art ventilation, and flexible learning spaces. Classes would have just 15 students with two teachers - a lead teacher and a specialist providing individual attention. Every grade would have dedicated reading specialists, math interventionists, and special education teachers. For struggling students, help would be immediate and intensive, not delayed until they fall far behind.
These schools would serve as true community hubs, including:
Full-service health clinics providing medical, dental, and mental health care to students and families
Job training centers offering certifications and skills training for parents
Modern libraries open extended hours and weekends
Athletic facilities open to the community
Food banks and teaching kitchens offering nutrition education
The school day would run from 7 AM to 6 PM, filled with engaging programs from robotics clubs to arts programs to sports. Summers would offer enrichment programs, ensuring no learning loss during breaks. Teachers would earn professional salaries starting at $80,000, with built-in planning time, professional development opportunities, and resources to innovate in their classrooms.
I worked in a school that was open from 7:30 AM - 6 PM. I often bought my own supplies for the STEM afterschool program, but even on a shoe string budget, such programs helped kids.
What if these programs were funded?
The cost for transforming just one community this way? About $100 million per year. That means $500 billion could fund 500 such community transformations for a decade, breaking cycles of poverty that have persisted for generations. The return on investment would be enormous - lower crime rates, better health outcomes, increased employment, and stronger communities.
Or... we could build data centers.
And apparently, that's exactly what we're going to do.
Back to President Trump’s $500B January 21, 2025 announcement to build massive data centers across America. The first facility, under construction in Abilene, Texas, spans 875 acres - roughly the size of New York's Central Park.
Oracle's Larry Ellison detailed the initial phase: "The data centers are actually under construction, the first of them are in Texas. Each building is a half million square feet. There are 10 buildings currently being built, but that will expand to 20 and other locations beyond the Abilene location."
What Exactly Is A “Data Center”?
When I visited my brother in the “tech corridor” of Northern Virginia, the areas’s stately homes and scenic natural beauty were intermingled with massive square “Borg” looking cubes.
So what exactly are these data centers that we've deemed worth more investment than transforming education in 500 American communities?
Understanding Data Centers: The Internet's Engine Room
Think of a data center as a digital factory. Inside these facilities, thousands of specialized computers (servers) work together around the clock, processing the countless invisible actions that power our modern lives.
Every time you check your email, stream a movie, or chat with an AI, you're connecting to a data center somewhere.
These buildings house not just computers, but complex cooling systems, backup power supplies, and sophisticated security measures - all necessary to keep our digital world running smoothly.
The timing of this massive investment isn't random. Modern AI systems require astronomical amounts of computing power. OpenAI CEO Sam Altman explained the project's significance: "This means we can create A.I. and A.G.I. in the United States of America. [It] wouldn't have been obvious that this was possible... But we are thrilled to get to do this, and I think it'll be great for Americans, great for the whole world."
To understand the scale: a single advanced AI model can require more processing power than all of Wikipedia's servers combined. As these systems grow more sophisticated - as we've seen with recent developments like DeepSeek and the o3 models - their appetite for computing power grows exponentially. The data centers we're building today aren't just for our current needs; they're for the AI capabilities we hope to develop tomorrow.
These facilities face enormous challenges. A modern data center can use as much electricity as a small city. President Trump addressed this directly: "They have to produce a lot of electricity, and we'll make it possible for them to get that production done very easily, at their own plants if they want. They'll build energy generation and that will be incredible."
The Abilene Operation: A Glimpse of Scale
The Stargate Project promises to create 100,000 jobs across the United States. The first phase in Abilene alone represents a $292 million investment in construction. These are impressive numbers, and the economic impact will be significant.
But as I write this article using AI tools powered by data centers, I can't help but think about that alternative vision - those 500 transformed communities, those millions of children whose lives could have been changed.
Perhaps there's a bitter irony here, or perhaps there's hope. After all, we're building these data centers to house increasingly sophisticated artificial intelligence.
Maybe one day, these AIs will help us figure out how to create that educational transformation we so desperately need.
Maybe these new “reasoning models” can help us calculate the true cost of not investing in our children, our communities, our future.
Until then, we're building data centers. A lot of them.
And while they'll certainly power innovations we can only begin to imagine, I can't help but wonder about the innovations we might have seen from those children in Chicago, Detroit, Cleveland, and Baltimore if we'd chosen to invest in them instead.
The next time you check your email, stream a movie, or chat with an AI, remember that somewhere, a massive data center is processing that request.
And remember too that society's choices about where to invest its resources are exactly that - choices. As we build the digital infrastructure for tomorrow's artificial intelligence, perhaps we should also think carefully about the human intelligence we might be leaving behind.
What the WolfPack Is Reading:
NPR. Virginia Is The World’s Data Center Hub, But What’s The Cost? (October 23, 2023.)
OpenAI Blog. Announcing The Stargate Project. (January 21, 2025.) “All of us look forward to continuing to build and develop AI—and in particular AGI—for the benefit of all of humanity. We believe that this new step is critical on the path, and will enable creative people to figure out how to use AI to elevate humanity.”
Frequently Asked Questions
Q: Why do data centers need so much power? A: Data centers run thousands of servers 24/7, each consuming significant electricity. They also need power for cooling systems, backup generators, and security systems. A single data center can use as much electricity as a small city.
Q: What makes the Stargate Project different from existing data centers? A: The scale sets it apart. At $500 billion, it represents the largest single investment in data center infrastructure in history. The first facility alone spans 875 acres, roughly the size of Central Park.
Q: How will these data centers create 100,000 jobs? A: Jobs will span construction, facility management, technical operations, security, maintenance, and support services. Each data center requires teams of engineers, technicians, security personnel, and administrative staff.
Q: Could this investment be used for other purposes? A: Yes, as the article explores, $500 billion could alternatively fund comprehensive educational transformation in 500 communities for a decade, build 1.5 million affordable homes, or fund other major infrastructure projects.
Q: Why does AI need so much computing power? A: Modern AI models require massive computational resources for both training and operation. A single large AI model can need more processing power than all of Wikipedia's servers combined.
#StargateProject #datacenters #deeplearning #deeplearningwiththewolf #virginiatechcorridor #openai