Editor’s Note: As Brad shared in yesterday’s edition of Wide Moat Daily, there’s a growing backlash against artificial-intelligence (“AI”) data centers from local communities. That includes our editor’s own Spartanburg, South Carolina. But despite the understandable concerns around data centers, there are also real benefits to consider. Below, Brad shares a letter he intends to submit to the editor of his local paper about “Project Spero.” Read on.

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To the editor,

I moved to Spartanburg, South Carolina, over 30 years ago as a bright-eyed college grad full of expectation and ready for opportunity. Because I’ve stayed here ever since, running businesses and raising five children, I’ve witnessed a lot of change.

So much of it has been positive, with “Sparkle City” transforming from a sleepy textile town… into a prosperous manufacturing and distribution hub. Today, we’re one of the fastest-growing metropolitan statistical areas (“MSAs”) in the United States.

Spartanburg is a great place to live, to work, and to enjoy. None of us want that to change, and so I recognize and respect where many of you are coming from in protesting Project Spero, the proposed $3 billion data-center development.

You think it’s going to raise your energy bill. That it will affect the environment, too, perhaps lowering your property values in the process.

That’s what I’m hearing from Tuesday night’s spirited town hall on the subject. I couldn’t attend myself and, honestly, I’m not sure if it would have done any good if I had.

It’s hard to make headway in the moment when passions run that high on both sides. But hopefully everyone has had a chance to breathe – enough so to consider my “insider” point of view.

You see, I’ve built an investment research firm over the past 15 years called Wide Moat Research. It focuses on asset classes that deliver meaningful value, including property sectors like hotels, office buildings, hospitals, retail… and data centers – of which there’s much more to know than meets the eye.

An Introduction to Data Centers

I began covering data centers in 2010, long before our local dispute came about. And I’ve followed them closely ever since, recognizing early on how important they were going to be.

Today, there are around 5,400 active data centers in the U.S., with thousands more elsewhere in the world… a number that’s rapidly rising.

I could make the argument that data centers will be built regardless of whether we here in Spartanburg are on board with them or not. But that’s a morally bankrupt position to take.

Progress isn’t always positive.

Then again, it isn’t always negative. Sometimes it can lead to tremendous gains, as I think Project Spero will prove.

We are, after all, living in a time when nearly every part of our physical lives is supported by technology. Our banks, our schools, our hospitals and doctors’ offices, our utilities, our national defense… They’re all heavily dependent on digital infrastructure.

These institutions cannot exist the way we expect them to without computing power and secure information storage. In which case, data centers are mission-critical components to our modern way of life.

They’re also mission-critical in terms of keeping our state and larger nation competitive with the rest of the world. That last point is important, as this town should know.

I’m old enough to remember when Spartanburg was struggling under the weight of offshoring during the 1970s and ’80s. Once part of the “Textile Capital of the World,” we saw job after job transferred overseas as businesses found “better” ways to profit.

I don’t want to see that happen again after all we’ve worked so hard to build. I want to see us make it easier for businesses to operate in Sparkle City, not harder.

In which case, data centers can be enormously instrumental in that pursuit.

All the Jobs to Consider

For those of you who are – again, understandably – concerned about the environment you and your children live in, data centers are unique facilities. They’re essentially high-tech, climate-controlled, security-minded warehouses for computer servers.

Unlike factories, shopping plazas, or distribution centers, they don’t generate chemical waste. Nor do they create increased traffic frustrations.

In many ways, Project Spero is one of the cleanest, quietest forms of property development we could hope for here in Spartanburg.

Admittedly, none of that addresses concerns about the mere 50 or so permanent jobs this potential data center would create. But that doesn’t mean it’s pointless from an economic perspective.

Most data centers require hundreds of millions of dollars in investment, much of which goes toward paying construction firms, electricians, plumbers, contractors, engineers, and other skilled laborers. And once they’re built, the growth they support can easily create more employment still.

Those are real paychecks for real people – quite possibly our direct neighbors. Maybe a loved one. Perhaps ourselves.

Nor is that where the economic benefits end. Data centers also bring in more tax revenue to the communities they’re built in. That means our legislators would be able to better support schools, law enforcement, and emergency services, as well as maintain our roads, parks, and natural resources – all without racking our personal taxes higher.

Similarly, data centers need strong power connections, electrical systems, and broadband. And those infrastructure upgrades are bound to benefit us as well, both now and over time…

If we allow them to happen.

The All-Consuming Energy Question

Now, I fully acknowledge that data centers are massive power users. That is probably their biggest drawback, but we should keep two things in mind here:

1. Energy demand is rising everywhere, regardless. Electric vehicles (“EVs”), smart homes, and new manufacturing investments are already putting the grid under increasing pressure nationwide. That’s why so many states – South Carolina included – have been investing in energy production like never before. The question isn’t whether energy demand will grow… It’s how much Spartanburg will benefit from it.

2. Modern data centers are, believe it or not, becoming energy efficient. Many have advanced cooling systems that use up less water than their predecessors. And they very often use as much renewable energy as possible to meet their electrical needs. They don’t want to be racking up the power bill any more than you do!

That’s why I don’t believe the answer to Spartanburg’s concerns is to reject Project Spero at face value. Instead, we should press our local representatives to demand clear standards in planning the project and transparency as it unfolds.

In short, I encourage my fellow residents to look beyond fear and misinformation to see the data-center proposal for what it is: a chance to bring high-quality investment into our community with limited downside if we stay on top of the process.

We’re at a fork in the road today where we can either watch opportunity pass us by – or we can welcome responsible development to Spartanburg’s benefit.

The choice is ours.

Sincerely,

Brad Thomas