Michael Buckner/Penske Media via Getty Images
- Kevin O'Leary's Utah data center project may create fewer jobs than he initially said.
- Wonder Valley's data center job estimates are closer to 4,000 construction roles.
- Local residents have opposed the data center due to concerns about water use and air quality.
Kevin O'Leary has said his Utah data center development will create 10,000 construction jobs and 2,000 permanent roles.
There's one problem: It probably won't.
The "Shark Tank" investor may have overstated the data center's hiring potential during the construction phase, Business Insider learned in a conversation with O'Leary Ventures CEO Paul Palandjian.
The accurate estimate is closer to 4,000 new construction jobs over 10 to 15 years — and that isn't a guarantee.
"Look, these numbers are fluid, and they change by the day," Palandjian said, adding that the updated estimate is reflective of "our current thinking on the project."
Dubbed Wonder Valley, O'Leary's combined data center and power plant has the potential to reach 9 gigawatts of capacity. That would make Wonder Valley one of the world's biggest data centers if fully built out.
Data centers generally do not create large numbers of permanent, full-time jobs in local economies. Their impact on local economies is harder to measure, in part because the nascent industry is still being studied. They do come with an enormous demand for temporary skilled labor during the construction phase.
Once a data center of this scale is fully built and operational, the on-site workforce shrinks by an average of 78%, researchers at the University of Southern California Marshall School of Business found.
Using the USC researchers' formula, a more likely estimate for permanent jobs at Wonder Valley is 1,350.
"It's all supply and demand-based, so we've analyzed it for its scaled potential," Palandjian said of his job estimate.
An FAQ sheet for the project, found on Utah Gov. Spencer Cox's website, said that the developer for Wonder Valley has "committed to a projected 2,000 permanent jobs in skilled trade, logistics, IT, and administrative positions to county residents."
Whether Wonder Valley reaches that scaled potential is an open question.
The data center doesn't have a tenant yet, though Palandjian said O'Leary Ventures is in "very early talks" with multiple large tech companies.
Wonder Valley's proposed site occupies a portion of a broader 40,000-acre zone backed by Utah's Military Installation Development Authority, a state agency tasked with raising tax revenues through economic growth.
A final development agreement is still being negotiated and is expected to be signed "in the next month or so," a MIDA spokesperson wrote in an email to Business Insider.
A draft version of the agreement posted on MIDA's website, dated April 24, shows that the data center will receive multiple tax breaks, including a 100% personal property tax rebate and an 80% real property tax rebate, for up to 30 years.
The agreement does not specify a required minimum number of jobs. Utah offers tax breaks to data centers without a job-creation requirement.
The Box Elder County community has expressed fierce opposition to the data center, citing concerns about water use, air quality, and lack of transparency from local officials. Residents of the county filed two referendums on Monday to overturn local officials' approval of the site.
O'Leary has dismissed the protesters, suggesting they were bused in from out of town, and has argued that their claims are based on misconceptions about data centers.
"Think about the number of jobs," O'Leary said in a post on X on Friday.
from Business Insider https://ift.tt/eVoF3XH
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