Berkshire's Abel Says Communities Are Pushing Back on Data Centers
Summary:
- Berkshire Hathaway CEO Greg Abel told CNBC on Wednesday morning that communities nationwide are increasingly resisting new data center builds.
- Abel said Berkshire's role in the buildout centers on supplying power, and that the company wants to work with large computing firms as long as costs stay controlled.
- Mizuho's Vikram Malhotra wrote Tuesday that investors see data centers becoming a midterm election issue and raised questions about resource use and job gains.
What Abel told CNBC
Speaking with CNBC's Becky Quick on Wednesday morning, Greg Abel highlighted a growing backlash to new facilities, saying, "There is a lot more pushback in the communities across the U.S." He explained that Berkshire's focus in this buildout is largely on delivering power and electricity generation to these sites.
Conditions for doing business
Abel said, "We are interested in serving these hyperscalers ... if there was no impact to the rates of our other customers." He added that Berkshire wants to partner with supercomputing companies so long as those customers keep their costs in check.
Why investors are watching
Investors and analysts have backed Abel's view, noting a growing, coordinated political backlash to massive computing builds that strain municipal electricity and water supplies. In New York State, new data center construction is on hold, and numerous other states are considering moratoriums or limits of different intensities. Roughly 4,700 data centers operate in the U.S., and that count is climbing.
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The political angle
Analysts at Mizuho told clients Tuesday that many investors think data centers could become a notable topic in the midterms. "This is clearly an evolving situation as some investors question the set-up with upcoming mid-term elections and validity of claims around resource consumption and limited long-term job creation," wrote Mizuho's Vikram Malhotra.
