Data Centers Belong in Nevada’s Economic Future

Nevada has never built its economy by standing still.

From mining and gaming to logistics, advanced manufacturing and renewable energy, our state has repeatedly embraced new industries while finding ways to make them work within Nevada’s unique communities, landscapes and resources. Today, Nevada has another opportunity: becoming one of the nation’s leading locations for the digital infrastructure that increasingly powers the modern economy.

The Nevada Data Center Alliance was created to help make sure we get that opportunity right. We are a coalition of companies, employers, workers and community partners that believe responsible data center development can be an important part of Nevada’s economic future. Our role is not to argue that every project belongs everywhere. It doesn’t.

Our goal is to help policymakers and communities understand this rapidly evolving industry, separate legitimate concerns from misconceptions, and develop predictable, responsible policies that allow good projects to move forward in appropriate locations.

Why data centers — and why Nevada?

Almost everything we do today depends upon digital infrastructure. Every online purchase, video conference, electronic medical record, financial transaction, cloud-based business application and increasingly every artificial intelligence tool depends upon physical infrastructure somewhere.

The “cloud” is not really a cloud. It is buildings, servers, fiber, electricity, cooling systems and the skilled people who build and maintain them.

As demand for digital services and artificial intelligence grows, the infrastructure supporting them has to grow as well.

Nevada is exceptionally well positioned to participate in that growth. We have available land, a strong business climate, proximity to major western markets, expanding energy infrastructure and a skilled construction workforce. We also have decades of experience welcoming large capital-intensive industries while establishing reasonable rules to protect communities.

The question facing Nevada is not whether the digital economy will continue to expand. It will. The question is whether Nevada will capture its share of the investment, jobs and tax revenue that come with it.

An extraordinary economic opportunity

Modern data centers represent some of the largest private capital investments being made anywhere in the country.

Their economic impact begins long before a facility becomes operational. These projects can employ hundreds — and on the largest campuses, thousands — of construction workers over multiple phases of development. They create opportunities for electricians, operating engineers, plumbers, pipefitters, laborers and numerous other skilled professionals, including workers participating in registered apprenticeship programs.

And unlike a conventional development that is completed and largely left alone, data center infrastructure is constantly evolving. Servers are replaced. Electrical systems are upgraded. Cooling technologies improve. Computing density increases. New generations of equipment are installed.

That means continued opportunities for Nevada’s skilled workforce long after the initial construction phase.

Once operating, data centers can also generate substantial and relatively stable tax revenue while placing comparatively limited demands on many traditional government services. That combination can be particularly valuable in rural Nevada, where one major investment can significantly diversify a county’s tax base and help support schools, roads, public safety and other essential services.

Yes, there are impacts. Regulate the impacts.

Data centers are industrial developments, and industrial developments have impacts. Communities should absolutely consider noise, lighting, setbacks, visual impacts, water availability, energy infrastructure and compatibility with neighboring properties. But those are not uniquely “data center” issues. They are land-use and infrastructure issues.

Nevada already has sophisticated systems for evaluating industrial development, water resources, electrical infrastructure, environmental impacts and land-use compatibility. Those systems can and should evolve as technology changes.

Our principle is straightforward: Regulate the impact, not the industry.

If a project creates unacceptable noise, establish and enforce appropriate noise standards. If lighting affects neighboring properties, regulate lighting. If adequate infrastructure is unavailable, require the developer to demonstrate how those needs will be addressed. Those standards should be clear, measurable and applied consistently to comparable industrial uses.

Creating entirely different rules simply because a building contains servers rather than another industrial operation risks replacing thoughtful land-use planning with arbitrary policy.

Technology is changing the conversation

Much of the public debate surrounding data centers is based on facilities designed years ago rather than those being planned today.

Cooling technology is changing rapidly. Closed-loop systems, air-cooled technologies and other approaches can dramatically alter the water profile of a facility. In some locations, projects can utilize reclaimed or effluent water rather than potable supplies.

Energy technology is evolving just as quickly. Developers, utilities and regulators are working through new approaches to generation, transmission, storage and infrastructure investment.

These issues deserve serious scrutiny. But Nevada should evaluate the technology actually being proposed rather than regulate tomorrow’s projects based exclusively on yesterday’s designs.

Local communities should remain in charge

The Nevada Data Center Alliance strongly believes that local governments should determine what kinds of development are appropriate for their communities.

A project appropriate for an industrial area in Storey County may not be appropriate next to a residential neighborhood somewhere else. Rural Nevada’s needs may differ from those of Reno, Sparks or Las Vegas. That is exactly why local land-use processes exist.

We believe communities should establish clear expectations, require developers to meet them and reject projects that cannot.

What we caution against are blanket moratoriums, reactionary policies or regulations that single out one industry before policymakers have had the opportunity to fully understand the projects, technology and existing regulatory framework.

Good regulation and economic development are not opposing goals. Done correctly, they reinforce one another.

What the Nevada Data Center Alliance does

Our organization wants to serve as a resource for Nevada communities.

We work to connect policymakers with industry experts who can answer technical questions. We provide information about emerging technologies and industry practices. We participate in public discussions about proposed regulations. And we can help communities examine approaches and model policies used elsewhere.

We also want to be a conduit in the other direction.

The industry needs to understand the expectations of Nevada’s communities. Developers need to listen to neighbors, local officials, utilities and other stakeholders. Companies seeking to make long-term investments here should understand that being a good community partner is part of doing business in Nevada.

Our job is to help make those conversations productive.

Nevada has made this bet before

Nevada’s economic diversification did not happen accidentally.

For decades, state and local leaders have deliberately created an environment that encouraged companies to invest billions of dollars here. Economic development incentives and tax abatements were not simply giveaways; when structured properly, they were seeds planted to attract investments that could broaden Nevada’s economy and ultimately expand its tax base.

Those policies helped Nevada compete for industries and investments that once would have gone elsewhere. We should not abandon that strategy just as the digital economy enters perhaps its most significant period of growth. Nor should Nevada assume that these investments are guaranteed to come here. Other western states are competing aggressively for the same projects, capital and jobs.

Investment can go elsewhere.

The choice before Nevada

There are two bad extremes in this debate. One is approving every project without regard for its impacts. The other is deciding that an entire industry is unwelcome because legitimate questions remain about how some projects should be developed.

There is a better approach.

Set strong standards. Protect neighbors. Require appropriate infrastructure. Demand responsible development. Encourage new technologies that reduce impacts. Then allow projects that meet those standards to compete for investment in Nevada.

Data centers will not replace tourism, mining, manufacturing or logistics. They do not need to. They can become another pillar of an increasingly diverse Nevada economy.

Twenty years from now, the digital infrastructure supporting artificial intelligence, medicine, finance, transportation, education and nearly every other major industry will exist somewhere.

We believe some of it should be built in Nevada. And we believe Nevada can demonstrate that economic growth and responsible development can happen at the same time.

That is why the Nevada Data Center Alliance exists — and why we are excited about what comes next.