Today, data centers are a controversial topic. Critics say large, hyperscale centers can hurt the environment, raise energy rates and support harmful advancements in AI.
The City of Milwaukee is one of several Wisconsin communities putting a pause on potential data centers through a one-year moratorium.
Dozens of residents spoke in favor of the moratorium at city meetings. One of them is a data center manager. Ryan Brooks is chief technology officer and general manager at Data Holdings. It’s a two-story, 46,000-square-foot data center east of Miller Valley owned by the Potawatomi tribe.
If you’ve traveled along Highland Boulevard and can’t picture it, that’s by design. The building’s brick façade and fake windows match the neighborhood’s aesthetic. It’s one of many data centers that have been operating without much public attention for years, before the AI boom.
Ryan Brooks took WUWM’s Eddie Morales on a tour of the facility to share how Data Holdings is different than hyperscale data centers and why he and the company as a whole support data center regulations.
This conversation has been edited for length and clarity.
Eddie Morales: Can you explain the background and history of Data Holdings?
Ryan Brooks: So, you're standing on the old Concordia campus. This was an area of Milwaukee that wasn't in great shape, and the city asked the tribe to take it over. The tribe has moved it into trust, which means it's like reservation land right here in the city of Milwaukee.
As part of their efforts to diversify revenue streams, they looked at different businesses they could do. One of the businesses they decided to get into was the data center. We're an important part of the region's infrastructure. So, think of us like an electronic bridge or something important like the airport, right? A ton of business gets done here. It's really to the benefit of local businesses, governments, education, nonprofits. We've got a variety of customers. So, unlike the people that are coming to town like in Port Washington, Racine, Kenosha and Beaver Dam [where there are hyperscale data centers proposed or being built], we're kind of part of the community.
Our big claim to fame is we've never had any downtime. So for 13 years, we have a perfect record of uptime, which is one of the reasons people move in here. As we go around, you'll see some of the customers, you'll see some of the infrastructure and you'll see why it's interesting that the tribe built a data center. A lot of their philosophy is really reflected in this building. If you think of a group that might be environmentalists, it's a Native American tribe, right? You'll see what they did to really address some of the complaints people are having now about hyperscalers.
What can these major tech companies learn from Data Holdings when it comes to proposing and building these hyperscale projects?
I would largely say that we, and certainly I, agree with a lot of the complaints that citizens have about the hyperscalers that are coming to town. They're coming here because we're not used to that type of thing happening. It is a bit of exploitation going on.
A big complaint is domestic water usage. Using drinking water to cool a data center seems absolutely ludicrous to me. In this facility, we use less water than a house does. The tribe made decisions very early that were more expensive, but in the long-term have been good decisions.
We're going to go into a data center space. This is a retail space, so as we've walked down this hallway, we've gone by one of our customers that we do share the name of: the State of Wisconsin. So the State of Wisconsin contracts with the tribe to put their servers here to keep them online. It's 55 departments and state agencies that leverage this facility. It's very important. It mirrors a facility that they have in Madison that they use to provide uptime to all of us as citizens.
One of the things that you'll see is we moved on to raised floor. This is actually part of the environmental bonafides of the building. We're three feet above a concrete deck. There's cool air below us, so we pressurize the floor with cool air and that's what's used to cool the servers. We pick up the hot air from the servers and move it outside to the roof with these two roofs.
This is a glycol system. It's like a car antifreeze system or a car radiator. This is a big reason that we're green. I wouldn't work at a place that didn't have characteristics like this. This is completely reconfigurable. Part of the whole thing about a data center is you get one chance to turn it on. So, 13 years ago when they turned this on it was filled with glycol. It's never been emptied. We're not evaporating any water. That's why we don't use any water.
That costs more day one. Now, it turns out that actually having that free cooling has actually increased our margins. It's a better business as a result of the environmental investment here. We want everything to be completely non-toxic. If it were to leak, if this does leak, we have systems to reclaim it. We have not had a leak since inception. If it were to leak though, we can reclaim it and put it back in. That's one of the reasons we use less water than a house.
What's your opinion on how hyperscale data centers are proposing environmentally friendly solutions?
I would say none of that would have happened without the people asking the questions. The people have become very educated. You can take someone off the street and they know a lot about data centers right now. I'm very thankful for that because I live here. I've lived here my whole life. The questions they're asking is forcing the hyperscalers to behave better. That's what I'm thankful for.
How necessary are local data centers? Is there a need for more?
No, I don't think that there's a need for additional data centers, especially in the city. There will be linear growth as people use more data centers because more business goes digital, but there's not going to be a need for a giant data center in the city of Milwaukee. That's one of the reasons we support the moratorium.
Some critics of these hyperscale data centers [ask about] if the AI bubble will burst. If that happened, what would the impact be?
It's huge because they're using a ton of the trades in the area. There's a ton of manufacturing that's shifting to support those, which is good for an area like southeastern Wisconsin. What I say is there's going to be some pickleball courts.
The number of these large hyperscalers, the amount of power that they require is more than is planned by all the energy providers in the state. So, someone's not going to make it. The other thing that's going on, you can always count on computers to get smaller. Our entire lives, computers get smaller. These models are getting easier to run. Some of these models can run on our phone now. So, there will always be large centers that are training AI models, but the inferencing, or what we do as users with the model, interacting with the model, the demand will get smaller and the footprint will get smaller. So, just like we used to have huge computer rooms with computers that didn't do much work, AI is going to get a lot smaller too.
I am concerned about the long-term thinking for these hyperscalers. They're not going to need all that space and power in a few years. The use by hyperscalers of power is about three orders of magnitude more, 1,000 times more than a typical data center. It's night and day difference. The difference between a regular data center like this and a hyperscaler couldn't be more clear. We're talking about the usage of an entire state versus the usage of a small town.
Is there any concern about how that energy consumption would affect businesses or this data center?
It could. So, the PSC (Public Service Commission) has approved rate hikes. In a sense, this is already built in. There's no indication that rates won't go up. I don't know the law in this regard, but we're certainly planning for rate hikes year over year for the next five years.
What really sparked your participation in that meeting to take that stance on the city's moratorium?
One thing for me personally, it's very interesting to see people learn an esoteric topic like data centers, become so educated in them, and then take a very educated stand on, 'hey, I think that a huge hyperscale data center doesn't belong in the city.' It's very easy to support a position that's completely logical. I think that we're the antithesis at Data Holdings of what's going on with hyperscalers. We're long-term play. We're going to be here forever. We're not going to get bought by another company because we're a tribal enterprise. We're on trust land. This land is never going anywhere. It's absolutely aligned with what we do here on a day-to-day basis. Their concerns are our concerns.
