Senate Report Says Big Tech Is Not Being Honest About AI Data Centers

Some of the biggest technology companies in the world are building giant data centers across the United States to power artificial intelligence, or AI. A new Senate investigation says these companies may not be telling the full truth about the costs and benefits of those projects. The report was shared first with TIME magazine and is expected to push Congress to set new rules for the industry.

Senator Elizabeth Warren of Massachusetts led the investigation along with Senators Chris Van Hollen and Richard Blumenthal. Their team spent a full year studying seven major data center companies: Amazon, Google, Meta, Microsoft, CoreWeave, Digital Realty, and Equinix. The senators' staff asked each company for information and also spoke with employees.

One big concern is about jobs. Tech companies often tell local governments they will create many jobs in order to get tax breaks. But when senators asked how many permanent workers these data centers actually employ, several companies refused to answer. The ones that did respond said they hire roughly one full-time worker for every megawatt of power the center uses, meaning a data center using as much electricity as 100,000 homes might only employ about 100 permanent workers.

The report also found that the most valuable rewards these companies receive are not well-known property-tax breaks. Instead, they are sales-tax exemptions on expensive computer equipment. AI data centers need huge amounts of special hardware, and graphics processing units — called GPUs — make up about 39% of spending at a large AI facility.

Another issue is the use of nondisclosure agreements, or NDAs, which are legal promises to keep information secret. All four major tech companies asked government officials to sign NDAs during data center negotiations. The Senate report argues these agreements kept the public from learning how tax dollars and public resources were being used. Microsoft and Amazon have since said they will stop asking local governments to sign NDAs, but Google and Meta did not make that same promise.

A major question the report raises is: who pays for all the extra electricity these data centers need? Building new power plants and power lines costs a lot of money, and those costs can be passed on to everyday people. None of the seven companies agreed to pay for new power infrastructure that would only be needed because of their data centers.

The report points to a power plant in Richland Parish, Louisiana, that a local utility called Entergy wants to buy. Analysts say this is mostly because Meta plans to build a huge $50 billion data center nearby that could use 4,500 megawatts of electricity — about four times what all of New Orleans uses at its busiest. Experts say this could raise electric bills for average customers by $8 to $13 every month, though Meta disputes that its project is responsible.

In September, the House of Representatives passed the Ratepayer Protection Act by a vote of 417 to 3. This bill would push states to make large electricity users like data centers pay for extra power infrastructure they need. However, the bill stalled in the Senate, which voted 57 to 43 against moving it forward, with Democrats saying it was too weak. Most decisions about electricity rates are still made by state governments, so many of the biggest battles over who pays for AI power will continue in state legislatures across the country.