America is building 3,000 data centers. The economics aren't as great as they seem

Cities trade tax breaks for a fraction of the jobs data centers promise. That's because construction crews that build them move on within months

Kyle Grillot / Bloomberg via Getty Images

Every few months, an American city announces a data center project worth billions. Local officials talk about economic development and job growth. If AI needs computing power and computing power needs enormous buildings, buildings need workers.

Abilene, Texas, offers an example of what can go wrong. With a population of over 100,000 people, Abilene had to approve new RV parks just to house the construction workers who are building one of America's many data centers. But they won't stay long. The developer is contractually obligated to maintain a staff of just 57 people by the time the facility is up and running.

Abilene isn't unusual either. Thousands of workers flood a community for months or years of construction, then leave behind operations staff in the low hundreds. What a city gets out of the exchange depends entirely on what it negotiated before the first crew arrived.

The gap between construction crews and permanent staff

The 57-job figure in Abilene is a contractual floor. Under Texas's Chapter 313 framework, developers agree to create a minimum number of permanent full-time positions in exchange for limits on their taxable property value. Each qualifying job must require at least 1,600 hours of work per year, pay at least 110% of the county's average weekly manufacturing wage, and carry employer-covered health benefits. Lancium, the site's principal developer, agreed to 57.

The actual headcount will likely be higher. About 100........

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