Residents and lawmakers in Deuel County are grappling with questions regarding the implications of a substantial proposed data center investment. As the data center boom unfolds in South Dakota, clarity remains elusive, prompting the company behind the initiative to host an open house at one of its North Dakota facilities.
Over 80 individuals from South Dakota, including local representatives, gathered in Ellendale, North Dakota, to explore the future of the $16 billion AI data center project. This facility, designed by Applied Digital, promises to transform the small town—population approximately 1,100—by providing significant economic stimulation.
Nick Phillips, Applied Digital’s Executive Vice President of External Affairs, showcased the facility’s unique design, stating it has the potential to become “the world’s fastest supercomputer.” The data center will cover over 300,000 square feet and will be equipped with advanced technology necessary to meet the growing demands of artificial intelligence.
These data centers are increasingly being established in rural areas due to their availability of excess power resources. For instance, the proposed data center in Toronto, Deuel County, aims to create approximately 200 jobs for a community of roughly 200 residents. Phillips emphasized the importance of fostering relationships with local communities, ensuring mutual benefits from such investments.
The open house allowed attendees to ask pressing questions regarding the project’s environmental impact, including energy consumption and water use. The facility is structured to use a mere 10 gallons of water per minute, akin to a single-family home, and operates on a closed-loop cooling system, which allows for water reuse indefinitely.
State Rep. Kent Roe, representing the area where the proposed data center will be situated, mentioned his initial skepticism but found the project promising after witnessing the scale of the building. He emphasized the broad economic benefits that could radiate from such an initiative, benefiting even adjacent small communities with limited populations.
The project is also expected to stimulate local entrepreneurship, with local residents pursuing business opportunities that were once unfeasible due to low demand. Applied Digital is actively addressing housing concerns by investing in renovations as well as constructing new homes and apartments to accommodate expected growth.
However, industry experts point out that for South Dakota to attract similar investments, supportive tax incentives are crucial. Previous legislative efforts to secure tax benefits for data center operations have not been successful. Phillips noted that without these incentives, the viability of establishing data centers in the state remains in question.
This development could signify a turning point for rural communities in South Dakota, presenting opportunities for growth, job creation, and enhanced services. The integration of such cutting-edge technology could foster innovation and uplift the local economy, offering hope to residents in these small towns.