Panini A. Chowdhury: Rural Pa.’s data center mirage

Rural Appalachian communities in Pennsylvania know the feeling of being promised the world and left with the bill. For generations, coal powered the region’s economy. But when demand collapsed, so did entire towns. More than 33,000 mining jobs have vanished in Appalachia since 2011, leaving behind shuttered plants, hollowed-out tax bases and a painful lesson. That is, extractive industries tend to extract far more than they give back.

Today, many local leaders are once again searching for a savior. This time in the shimmering, futuristic form of AI data centers. The pitch sounds familiar: big companies, big money, big promises. These sprawling server farms require enormous land, massive energy supplies and huge public subsidies, but only a handful of workers. Pennsylvania risks repeating the old story of big promises, small results.

It’s not just the economic structure that should give us pause. It’s the volatility of the very companies driving this boom. Big Tech has a well-earned reputation for overestimating future demand, overspending during hype cycles and then slashing jobs when reality hits. During the pandemic, tech companies hired recklessly, only to lay off tens of thousands as soon as demand of their products fell short of expectation. Now, Microsoft, Google, Amazon and Meta are pouring hundreds of billions into new data centers and it increasingly looks like another speculative sprint.

Financial analysts now warn that the numbers simply don’t add up. HSBC estimates that OpenAI — the darling of the AI revolution — faces roughly $620 billion in data center rental commitments over the next several years. The company’s projected revenue by 2030 is less than a third of that. That gap should set off alarms. If the most celebrated AI firm in the world may not be able to pay for the compute power it is already reserving, what does that say about the stability of the broader data center market?

Pennsylvanians already are feeling the consequences. The PJM energy market, which serves 13 states including Pennsylvania, estimates data center growth is responsible for $9.3 billion in additional electricity costs for ratepayers. By 2026-27, Pennsylvania is projected to see $2.75 billion in grid expansion and generation costs passed on to residents, amounting to about $225 more per customer per year. Energy-intensive facilities this large don’t absorb those costs. Local citizens do.

The much-promised wave of data center jobs simply isn’t materializing, either. Data centers boast enormous price tags but minuscule permanent workforces, often fewer than 50 full-time employees per site. Pennsylvania’s data center employment actually fell from 18,270 in 2023 to 15,525 in 2024, representing barely a quarter of 1% of statewide jobs. Most of the job gain that are being touted with these data centers are short-term construction roles, often filled by specialized out-of-state contractors. The economic impacts are also largely reflecting the cost of pouring concrete, not creating lasting livelihoods.

The job-intensity problem is structural. Data centers are designed to be automated, secure and efficient. They don’t need large teams. Even worse, the jobs they do require like network engineers, cooling specialists, cybersecurity experts are rarely positions that displaced coal workers or local high school graduates can simply step into. Without intentional workforce development, communities are left watching from the sidelines as outside specialists fill the few available roles.

The irony is the explosive demand for AI computation that justifies this building frenzy may soon level off. According to Stanford’s 2025 AI Index, the cost of running a GPT-3.5-level query has fallen 280-fold since late 2022 due to better algorithms and more efficient chips. Hardware costs are dropping around 30% annually; energy efficiency is improving roughly 40%. AI models are getting smarter without requiring exponentially more servers. If today’s data center build-out assumes endless compute growth, tomorrow’s reality could be overcapacity and abandoned server farms.

Yet municipalities keep dangling tax breaks and public incentives to lure them. In 2023, Pennsylvania data centers contributed a nominal $1.36 billion in taxes, but only after receiving enormous abatements. Local governments often waive property taxes for years to secure these projects, eroding the very tax base they need to rebuild. Meanwhile, the rising energy costs triggered by data centers disproportionately burden low-income households. The communities pay more, receive less, and accept long-term environmental and infrastructural risks in exchange for fleeting corporate interest.

If tech giants insist on building data centers, communities should demand more than servers. They should require companies to collocate AI application teams, research units or manufacturing operations — anything that creates meaningful economic roots. And they must invest aggressively in vocational schools and community colleges so local residents, not outside contractors, land the jobs of the future. Also, these data centers can play an important role when it comes to repurposing empty industrial brownfields or defunct steel, coal plants.

As members of the Rust Belt, Pennsylvanians know the dangers of chasing the next big thing without guardrails.

Data centers have a place in modern infrastructure. But they are not a silver bullet, and they should never justify clearing forests, displaced families or compromised water supplies. The era of blind faith in extractive booms must end. Rural Pennsylvania must build its future on industries that sustain communities, not hollow them out once more.

Panini A. Chowdhury is a professional planner specializing in infrastructure planning. He also serves as a gubernatorial appointee to the Pennsylvania Pedalcycle & Pedestrian Advisory Committee.