Data centers alone won’t build the AI economy
This article argues that while physical infrastructure like data centers and fast networks are crucial for the AI economy, communities also need "institutional infrastructure" to achieve lasting prosperity. It suggests that large tech companies building data centers should contribute to funding these community-level institutional investments, such as accelerators and coworking spaces. The piece uses Wilson and Raleigh, North Carolina, as examples of communities investing in long-term entrepreneurial ecosystems.
In an opinion piece, Tom Snyder argues that while the emergence of AI makes physical infrastructure like data centers, fiber networks, and electrical grids strategically important, these alone will not build a robust AI economy. He contends that communities also require "institutional infrastructure" to activate economic capacity and create value from technological advancements.
Snyder highlights examples such as Wilson, North Carolina, which built a municipal fiber optic network and layered on institutions like a coworking space and an accelerator program to foster an entrepreneurial ecosystem. He also mentions Raleigh's HQ Raleigh and the success of Pendo, demonstrating the long-term, compounding impact of such investments.
The author stresses that while large corporate recruitment offers immediate headlines, it often fails to deliver promised outcomes. Instead, he advocates for a diversified approach that includes patient, sustained investment in entrepreneurial strategies, which, despite appearing insignificant initially, are less expensive and more effective in creating new employers.
Snyder concludes by proposing that hyperscale AI companies, which demand significant investments in electricity, water, and grid capacity, should also help finance the institutional infrastructure in communities where they build data centers. He suggests a small percentage of a data center project budget could fund accelerators, AI literacy initiatives, and university partnerships, framing it as market development rather than philanthropy to ensure communities can fully leverage the AI platform.