Italy region: +200% tax on datacenters built in green/agricultural areas(en.ilsole24ore.com) |
Italy region: +200% tax on datacenters built in green/agricultural areas(en.ilsole24ore.com) |
Datacenters are weird: they come with the negatives (although, per unit energy consumption, they’re relatively innocuous), but they seem to be missing most of the regional benefits. They don’t create many jobs. They pay little in taxes. They don’t actually produce anything that makes anyone else want to further develop the surrounding area. Their outputs offer little benefit to the community that wouldn’t be provided nearly as well by a datacenter somewhere else.
So I actually get why it makes sense to support development but oppose new datacenters. Or to have an added tax on datacenters so that at least some economic benefit is captured.
As an interesting contrast, a colo facility is a bit different: I want to have colo datacenters near by so that I can use their services. But this isn’t what the new development is about.
[0] Some of which are finite in a given region or are preferable not to use. (But don’t forget that more energy use = increased production in the long term, which can be a very good thing.)
EDIT: I do get it, it is mainly about local benefit not really about pollution or disruption, even if they are loud about that because it sounds better. Local municipalities should definitely charge significant land rents or zoning fees so that the community benefits. China has been very successful at this for decades.
EDIT: Very rough overview after some research, using Colossus 1 as reference, which is among the biggest GPU deployments. Not thoroughly verified, but it'll be around the right ballpark.
- Electricity: 150 MW live, with another 150 MW planned/studied. That is like adding a medium electric-arc steel mill or large chemical plant to the grid. A small standard power-plant can generate about that much.
- Land / space: About 217 acres and 785,000 sq ft. Footprint-wise, that is like a large factory campus or logistics park; much smaller than a mine, port, refinery, or industrial farm, but far beyond a normal commercial warehouse.
- Water: Roughly 1.3–3M gallons/day in public estimates. That is comparable to the consumptive water use of a small-to-mid steel plant or a large industrial cooling site; not refinery-scale, but locally significant.
- Air pollution: The servers are not the dirty part; the issue is on-site gas turbines/generators. That makes it more like a small gas peaker plant than a steel mill or chemical plant. Colossus 1 reportedly used up to 35 gas turbines before grid connection.
- Noise: Mainly cooling equipment, substations, batteries, turbines/generators. More like living near a substation or small power plant than near a mine, port, or metalworks.
- Traffic / logistics: Heavy during construction, then relatively light. Much less disruptive than a port, mine, farm, steel plant, or refinery, because there is no constant flow of ore, scrap, fuel, chemicals, crops, containers, or waste.
- Heat: Nearly all consumed electricity becomes heat. At 150–300 MW, the heat rejection is industrial-scale, closer to a small power station / large process plant than normal manufacturing.
But the point is they suck up land and resources for no material or economic benefit to the local population. There's absolutely no reason to build these things in or even near cities. They can be built in the middle of nowhere where they don't bother anyone with zero impact on the services they provide.
In the same way that most public utilities are: train stations, railway lines, airports, garbage dumps, sewage treatment plants, military bases and a hundred other things. The negatives are concentrated to the locality and everyone else reaps the benefits.
I get it if you wish to put a 99% self-sufficiency condition (water/power etc) but everything else reeks of luddism and nimbyism.
A sewage treatment plant may or may not be stinky, but I very much want to live in range of one so that my sewage gets treated. Similarly, living near a railway line means I can ride the train. Living near a landfill means that my trash can be managed at reasonable expense. Living near a military base adds huge potential economic value and nominally keeps me safe. Living near a giant AI inference or training facility? Meh -- I could use its services just as easily if it were 1000 miles away.
All of these create a ton of jobs in the local area and many of them provide massive advantages to the local area (except railway lines if you're not near a station I guess).
It would add low value-added jobs though (unskilled labor). Datacenters add high value-added jobs (skilled labor).
Only looking at the headcount is shortsighted imho.
You'd need some sort of data ingress/egress tax.
They will shuffle most gains around to the place with the lowest taxes. E.g. by internally buying and selling (overpriced) services.
The only realistic tax is coming from the jobs that serve those data centres (builders, maintenance, that little IT staff left for on-site jobs). And those are rather low margin jobs.
I wouldn't be surprised if those profits are re-imagined as costs paid to some entity in a tax-haven.
Also there's different kinds of taxes. IIRC, local communities get their revenue from sales taxes and property taxes. A data center doesn't sell anything, so they probably get zero from that. I don't really know how they'd factor into property taxes, because they're a blight and I don't know how the locality would assess their value without comparable transactions.
So there is little profit being taxed at the Datacenter/country Level.
On top of all that they typically get massive subsidies and tax credits. Why? Because the DC might go somewhere else, allegedly. Where? Nobody wants it. Everybody knows the politicians approving all this are getting bought or just coerced.
I'd love to see a single example of where one of these data centers was welcomed by the community or somehow a net positive.
[1]: https://www.bbc.com/news/articles/cy8gy7lv448o
[2]: https://earthjustice.org/case/xai-illegal-gas-power-plant-da...
[3]: https://www.nbcwashington.com/news/local/northern-virginia/n...
the law addresses exactly this. it greatly overtaxes datacenter in green spaces and lowers taxes in former industrial areas.
Regarding whether it's a good development drive... I can tell you, most companies could save a shitload of money by buying a few pallets of machines and racking them in a... datacenter.
I see our monthly AWS bill, I highly doubt we'd be spending that in datacenter bills.
Sure, people feel somewhat AI-fatigued, but blocking the future won't play out nicely for Italy or Europe in general.
Italy isn't a particularly attractive place to run data centers for different reasons, starting from the very high cost of energy.
> There are already 33 active data centres in the Milan metropolitan area alone; a further 10 are under construction and 23 under evaluation.
If the Milan hinterland is the most 'targeted' area, an increase in interest is also registered in the other provinces: in the rest of Lombardy there are three already active, plus one under construction and five under evaluation.
This will be an unpopular opinion as I have many but if these taxes are allocated 100% to offsetting taxes and costs for the farmers then I would support it but I am not in Italy so thankfully it does not matter what I or most people think. Farmers have thin margins and have to compensate for weather that they do not control. They are also very under appreciated which is bizarre to me given they provide our food.
I would take vehicles in two directions. EV's where it makes sense and hyper efficient hybrid vehicles that emit clean exhaust and get 150+mpg to fill some EV gaps until battery tech progresses quite a bit more.
So they want them in other areas instead? Like next to residential area?
I'm not sure they understand the implications...
It's even in bold "the use of disused former industrial areas"
or... industrial areas?
Why would they ban productive uses of land?
They don't pay "lots" of taxes. They pay taxes for the two engineers and 8 janitors working there.
Given that they don't want agricultural land used for data centers, it makes more sense to just ban them rather than allowing it if they get some extra cash.
LLMs on the other hand have an insatiable requirement for trillions of dollars of data centers, causing memory prices to skyrocket, companies to layoff staff to increase capital expenditure on even more data centers instead of improving the software to run these models.
There are no 'environmentally friendly' alternatives to LLMs and this tax tells you everything you need to know why it exists.
2. Italy != Europe. Countries can and will do things differently to other countries.
As if it was a charity lmao, this is a top priority, before defense even, food security will become more and more of a problem, that and water
Throwing money at farmers to keep them in the country is, like, the main purpose of the thing, and more than a quarter of the budget is spent on it (this is not a recent development, either).
It is not. But France was very good at ring-fencing their interests very early on, resulting in a somewhat-outsized weight of agricultural policy over the Union budget (since it was, back then, almost non-existent in other areas). After the Eastern expansion, it has become very difficult to change the approach (which is, overall, fundamentally successful - yes, there are issues, but nothing is perfect). Pre-brexit, the UK government would be the only one willing to grandstand on reforming the policy, mostly for reasons of internal propaganda; now it's basically in no-one's interest to touch it.
What? A quarter of EU expenditure is spent on agricultural subsidies, i.e. directly paying people to be farmers.
[0]: https://blog.andymasley.com/p/data-center-land-use-issues-ar...
EDIT: Just to clarify, I'm all for NOT building datacenters in nature that's worth preserving, or near residential areas where other areas would be fine. Farmland, don't care.
Data centers are not displacing food. That argument is disingenuous. Even in Italy agricultural land goes unused because of low demand.
But yes, in general Italy (or Europe, maybe except France or Northern Europe with hydro power) isn't the best place to build data centres.
> blocking the future won't play out nicely for Italy or Europe in general.
I think you're somewhat misunderstanding how things in Italy have been working for the better part of the last 2 decades. I am 95% certain that this measure was passed *precisely* because it had zero concrete political downsides. Italian political culture thrives in draconian or purely populist measures that end up being absolutely irrelevant or unenforced (with some terrible miscalculation every once in a blue moon, see the closure of nuclear power plants). You ban something, you get the political clout of doing that, and then nobody actually checks whether the government ever attempted to enforce that law, or that nobody was going to do it in the first place.
Trust in me when I say, if building datacentres in Italy were economically sound nobody would have wanted to pass this measure
"The selection of tier-2 metropolitan areas shows that overall, they are growing faster than market average. Madrid and Milan are clearly taking the lead and are both able to attract the biggest additional investments. It can safely be said that they are on their way to becoming additional tier-1 locations."
https://www.eudca.org/documents/content/ZlZXb4bRSRefaEVqya2I... (downloads a pdf)
> Trust in me
No, because being Italian doesn't mean you know anything about this. Most Italians think the primary Italian exports are mozzarella and tomatoes.
> There are already 33 active data centres in the Milan metropolitan area alone; a further 10 are under construction and 23 under evaluation.
Sometimes you will need to do stuff even if energy is not cheap. Come on (I’m italian too)
what are you referring to here? because it certainly is not data centers
We do have to spent a bit of each for any new tech advancement, but the alarmist, disproportionate claim you make is really not helping.
ArcelorMittal Dunkirk rolling & steel complex alone is ~450–550 hectares (more than colussus) and consume 2.23 TWh/year (colussus is ~2.6 TWh/year at 300 MW continuous load) and of course, water consumption for metal working is gigantic.
That's just ONE single facility in France.
I don't think anybody who understands the basics of civilization would want to go back before the Industrial Revolution.
Tech has a cost, and you usually pay a lot more at the begining of creating it.
Does it cause problems? Sure. Should we take it very seriously? Definitely.
But just repeating internet outrage is not a way to make good decisions.
If we want to have a future, we have to ask the engineer question at first.
I think you are discounting the speed at which solar is accelerating in southern Europe. Power is already pretty much free during the daytime on the Spanish and Italian grids, and grid-scale battery installations are starting to come online to spread that curve wider.
read the article:
> Lombardy alone accounted for 63% of the applications submitted throughout Italy.
> There are already 33 active data centres in the Milan metropolitan area alone; a further 10 are under construction and 23 under evaluation.
> If the Milan hinterland is the most 'targeted' area, an increase in interest is also registered in the other provinces: in the rest of Lombardy there are three already active, plus one under construction and five under evaluation.
No. In northern italy alone we have tens of thousands unused warehouse spaces.
Let's use that space for datacenters and solar farms instead of destroying forever yet another plot of fertile land.
If data centers will also bring nuclear to power them, i'm all for it. But let's be honest: realistically they will be powered by coal, maybe gas.
As to why we have so much unused warehouses: some legally have no owner, some have declared bankrupcy and will be leased at absurd prices (it will cost half to build a new one), some were costructed illegaly and all stay there in the limbo because the local administrations would have to pay to reclaim the land
There's a contradiction between your two first sentences…
I believe it has more to do with preserving the landscape that attracts so many tourists.
Solar farms in Italy faced resistance for the same reason.
It's not green politics.
The future is what we as humans decide it to be.
Many humans don't like this vision of the future, where we burn our planet so as to concentrate even more power in the hands of the super wealthy. This is them shaping their own future.
What does that even mean?
Maybe find scalable alternatives or software optimizations that do not require the worlds energy or building even more data centers everywhere and further burning up the planet?
They don't even create that many jobs like a factory for instance so we can say the mass employment offsets the environmental damage.
This is true, but don't forget a _lot_ of agriculture feeds _animals_ that we in turn eat. If you want to make optimal use of land for human needs, most modern agriculture is not that.
We have vastly more arable land than is needed to keep people from starving, even when used inefficiently to produce things like cattle feed.
This is just an aesthetic objection, nothing more.
There was no labour law at the time. Destroying the machines was a way to gain leverage, nothing more.
Ultimately the capitalists won that conflict. Many Luddites were murdered or jailed. And the history that was written tried to tell us that the Luddites were backwards peasants who didn’t understand technology and progress.
Datacenters process data, but they do it in a particular location, and therefore are subject to local and national laws.
It would be folly for a government to decide that some other country's laws and enforcement standards should be applied in absentia. Whether you love the singularity or hate it, you should whole-heartedly be advocating to have whatever datacenter your country will use be built on shore.
In fact, you should also be whole-heartedly advocating for local frontier models / or at least locally managed open weights models for the same reason. But the datacenter is easy. Just build them. Your fellow citizens will use them. Why send all their data to some other country that might be a strategic adversary?
* fantastic technology [citation needed]
* economic suicide [citation needed]
You can also take a look at North Korea as an example of a nation that decided the industrial revolution was one to sit out.
The core tenet of totalitarianism is pretending any opposing view is terrorism. You are either supporters of the system, or dangerous anti-social criminals who must be eradicated.
Remember the ones defining who’s a terrorist are pedophiles.
The more our definition of "Luddite" becomes historically accurage, the more it is true that yes, the HN audience is composed of people like that.
Ah yeah, the people of HN, well known for burning down datacenters.
These purpose built DCs in the recent AI craze doesn't. A handful of security guys, handful of technicians and that's pretty much it
compared to something like a car factory, data centers do not provide that many jobs.
(and the jobs are of significantly different nature)
Where have I heard this before?
Physical infrastructure inputs and negative externalities.
For example: electrical grid strain, water table consumption for cooling, and local pollution/carbon footprints.
But datacenters are hardly that? Sure, maybe whatever musk's doing with on-site gas turbines might qualify, but it's hardly representative of datacenters, which are probably closer to light industry or warehouses in terms of local impact.
I have no relation to the data center industry at all, it is just weird to see the discourse around it be so divorced from reality. There is a commenter below me saying that land ownership is illegitimate in the first place in order to justify banning data centers.
Is your understanding that the only tax burden on data centers is via income to local employees?
[1]. https://www.shreveportbossieradvocate.com/business/meta-data... [2]. https://progresschamber.org/insights/data-centers-cut-proper...
Anyone who wants to opt out can do so and it'll play out just fine for them.
but playing along with it: you just raise the % tax increase until it covers the cost of importing/cleaning the water or whatever other negative externality the data center causes.
the concept is similar to "fuck you" pricing of construction contracts. you place a bid that is super high (i.e. the 200% tax), and you're happy either way. if you land the job (data center is built), you make insane profits (tax) to be used elsewhere (cleaning water, green initiatives, or whatever). if you don't land the job (data center not built), that is great too, you didn't really want it anyways.
one thing is absolutely certain, though: humans will never build so many data centers that we run out of water. water scarcity will be from other causes.
Or if we're above wet bulb climate conditions again, we just watch the newest algorithm invent stories for us built on the uncredited labor of real artists.
There's no problem the more conventional practice of letting animals graze the majority of the year. If we didn't use those fields to feed and eat the animals, the grass would turn into CO2 and methane anyway. Or turn into boring forests.
Not everything has to be optimal. That thinking leads to Thanos' snap. People generally enjoy meat. They also enjoy the landscape farmers created.
Do we agree that moving towards a future that's somehow "more advanced" as compared to the present (i.e. isn't going back to the past) would likely require giving up some land, water, and energy? That is, that progress is always a trade-off?
We don't have to agree that an AI-powered future specifically is "more advanced". For example, transitioning from fossil fuels to renewables is IMO a future that looks "good and fair for regular people". But building solar panels requires energy and water, placing them requires lots of land, building batteries requires mining lithium which is bad for the local environment, building hydro power destroys ecosystems, etc.
I imagine you don't oppose this because it's overall better for humans and the planet. I'm just making the point that there are nontrivial trade-offs, and building anything requires the use of resources such as land, water, and energy.
If we're in agreement so far, then I think the main thing we're in disagreement about is whether AI is actually worth the cost. ("What does this 'future' do for us besides take our jobs?")
And to this I'd ask, how should we handle such disagreements in a free society? I may think that Mr. Beast recreating Squid Game was a profligate waste of human and non-human capital, just to make a buck. Or more seriously, I'm a vegetarian. Worldwide, meat and dairy production accounts for (very roughly) 80% of agricultural land use [1], 30% of agriculture's water use [2], and 15% of total human GHG emissions [3]. I don't think the benefit is worth the extreme cost.
People disagree with me about Mr. Beast and beef, though. They think that these are worth the cost to land, water, energy, and the planet overall.
My question is, how should we resolve disagreements of this kind, where one person thinks another person's actions are spending resources in a way that is not worth the return? It seems much larger than AI.
[1] https://ourworldindata.org/global-land-for-agriculture [2] https://link.springer.com/article/10.1007/s10021-011-9517-8 [3] https://www.fao.org/family-farming/detail/en/c/1634679
why should someone be banned from selling their land if they want?
Even if it's not agricultural land, there can be strategically important pieces of land that a country will insist cannot be sold to organisations that are opposed to the values of that country. However, in those cases, it might make more sense for the state to make compulsory purchases of that land.
The highest skill job an AI datacenter adds locally is electrician or climate technician. And not many of those.
They created a couple of facility janitor roles that will just be filled by illegal immigrants anyway.
I don't think its fair to characterize GMO witchhunting as shrewd nationalistic maneuvring to circumvent free trade; my view is that this was driven mainly by genuinely convicted (idealistic instead of pragmatic) environmentalist/anti-corporate activists (similar and overlapping with anti-nuclear sentiment).
I wonder if all they want from the future is fat people on mobility scooters like the beginning of wall-e.
Sure, AI may be the future for a certain market, but datacenters aside we will always need clean land, air and water, food for our bodies and homes to live in.
I have friends with farms and agricultural businesses in Italy. A lot of agricultural land is no longer cultivated by the families that own it because market prices are well below the cost of production in Italy.
chatgpt has 900M weekly active users, so a significant fraction of the world population. Given that the user base probably skews towards rich countries, its proportion among the local population is probably even higher. On the other hand what do you think is the proportion of people who take trains, especially in the US? What about steel plants?
So if I drive to work then it's fair game to be NIMBY when they want to build a light rail station? You might say "but even if you don't use it, it's reducing traffic so you're still benefiting!", but if those kind of arguments are allowed, you can make similar arguments about how AI will make the whole country richer because of increased productivity or whatever.
I get it though, they don't mind if it benefits the local community, that's the issue. I suppose it does make a lot of sense for at least the local municipality to charge steep ongoing land rents or fees for the zoning license. And I suppose that requires national coordination, otherwise they'll just go the next town over, which is exactly what is happening right now.
In China, local municipalities were very profitable for decades just from selling or renting land to industrial deployments. It had a big impact on the local tax burden and they were significant net contributors to the national budget, instead of the other way around.
For heating: imagine a 1km^2 campus. That’s 1e6 m^2, and peak daylight is around 1kW/m^2. So peak daylight on the campus is about 1GW. (Wow, just covering the whole campus with solar panels would be pretty awesome!) If you put a 1GW datacenter there, that is equivalent to full daylight, with zero albedo, 24/7. Hmm, I’d rather live at a considerable distance from just the dissipated heat.
As for noise, there is no substantial noise emission inherent to the operation, so I expect it largely comes down to how hard the facility tries to mitigate accidental noise and how well local regulators enforce sound measurement and control. Consider a high-end Noctua or similar fan, compared to a super cheap fan of comparable RPM, flow, and static pressure — a 30dB difference in emitted sound is entirely plausible. The datacenter has some switching noise from handling its 1GW of power, but it also has lots and lots of fans and pumps.
An LLM informs me that 1kW of acoustic energy radiated into free air (no surfaces) is 79dB SPL, Z curve (unweighted), at a range of 1km. So if 1 part per million of the datacenter’s power consumption ends up as noise, it’s loud. There are all manner of corrections needed. For example, your ears’ sensitivity is much lower at non-peak-sensitivity frequencies. But the data center isn’t in free air, and the effect of the ground, the atmosphere under appropriate circumstances, and the height of the datacenter could easily dramatically increase the intensity at longish distances.
A lot of this boils down to large datacenters using immense amounts of power and that power being something you would prefer not to have redirected at you in any form.
Doesn't this comparison fall apart when you consider that the heat is going to be dissipated across a large area? The reason why stuff gets so hot during the day is that the surrounding areas also get heated, so there's nowhere for the heat to escape other than up. If only 1sq km is getting heated, and that's getting dissipated, the effect is going to be far less than your implied comparison of 2 suns. To bring it back to your example, a patch of payment in the sun (ie. 1kW/m^2) can get scorching hot. But in absolute terms it's less than the output of a space heater (typical one is 1.5KW), not even enough to keep a room warm.
A hairdryer pointed at me from 1m away running 24/7 will make me notably warmer. A hairdryer 20m away is probably unnoticeable. A 1GW datacenter is a lot of hairdryers. At some scale, there is probably a buoyancy effect such that cooler air will be drawn in near the surface, get heated, and convect upwards, so I could even believe that a monster datacenter would cool some surrounding areas. (The sun inland from the west coast in the US has this effect during certain seasons, and AIUI this is a good part of the reason that the areas very near the coast tend to be dramatically cooler than inland areas in the spring and early summer.)
There was a study posted here on this exact topic a few weeks back. The most they could measure was a little over 1 degree C near the datacenter.
> But the point is they suck up land and resources
Land use for a datacenter is kind of negligible. Even the largest data centers are barely a rounding error compared to all of the other commercial and industrial operations around me.
Like it's not even close.
> They can be built in the middle of nowhere where they don't bother anyone with zero impact on the services they provide.
For what it's worth, all of the data center projects I've looked up near me are being built in remote or industrial areas. It hasn't stopped the protestors, who are arranging for bus transport to get to the sites because they're so far away.
I used the paper's data to investigate some of their claims. The top figure shows the temperature in the area surrounding Google's Oklahoma data center, in the middle of the figure. I think you can clearly see that the effect is totally dominated by the nearby coal power station and its huge, black pile of slag.
https://observablehq.com/@jwb/data-center-temperature-effect...
The scene is roughly here:
https://www.google.com/maps/@36.2154925,-95.3281217,13968m/d...
Edit: fixed notebook access. Sorry.