The electrician shortage slowing the AI boom

Summary

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Catalyst with Shayle Kann

Episode: The Electrician Shortage Slowing the AI Boom

Date: August 6, 2026
Guest: Raymond Hawkins, Chief Customer Officer, Compass Data Centers

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Overview

In this episode, host Shayle Kann explores one of the most critical yet under-discussed bottlenecks constraining the expansion of AI infrastructure in the U.S.: the shortage of skilled electricians. While chip supply and power availability dominate headlines about AI-scale datacenter growth, an acute labor shortage—particularly of highly-skilled electricians—threatens to delay or inflate costs for new datacenter projects. Shayle interviews Raymond Hawkins, CCO of Compass Data Centers, to unpack how the labor market is straining under AI-driven demands, what’s being done to remedy it, and how the interaction between industrial design, local communities, and workforce training is reshaping the sector.

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Key Discussion Points and Insights

1. What’s Stopping Datacenter Growth? (03:31–05:08)

• Shayle asks Raymond to rank the barriers to datacenter growth: chips, power, community pushback, and labor.
• Raymond Hawkins:
  • “Today you listed probably 1A and 1B—power is the biggie. The community has raced up the list pretty quickly...And right after that would be labor. It’s interesting—the question of, hey, is it stopping us? What it’s doing is costing a lot more money and putting a strain on the schedule.” (04:14)
  • Not a full stop, but the labor shortage—especially electricians—adds significant cost and logistical complexity.

2. How Labor Shortages Actually Play Out (05:08–08:03)

• The process starts with early contractor (GC) selection and deep market research before building, often focused on how to attract electricians to remote sites.
• Projects in rural areas mean companies must offer housing and incentives, resembling military deployments or the travel nurse system.
  • “There’s a lot of moving labor around… Because, you know, 40 miles outside Jackson, Mississippi, doesn’t have 500 highly trained electricians.” (06:19)
  • “It feels a little bit like days of deployment… it’s like travel nurses. There’s a lot of that.” (07:18)

3. Why Electricians are the Ultimate Bottleneck (08:03–10:00)

• Fundamental shortage stems both from the number needed and the specialization required—data center electrical panels are nothing like residential panels.
  • “The panel that gets put on a data center doesn’t look anything like the panel at my house. So you’ve got much more senior, much more capable electricians…and then two, you need hundreds of them.” (08:34)
• Supply and demand is strained even further for high-skill work.

4. The Market Response: Are Wages Enough? (10:56–13:13)

• Electrician wages have tripled in the past decade, with bidding wars becoming common.
  • “The cost for electricians has tripled in the time I’ve been in the business. Tripled in the last decade.” (11:19)
• Training programs are springing up everywhere, but the pace of growth is still hard to match.
  • “The industry is swallowing up the capacity…just like you see in the utility provider struggling to keep up with our industry from a pace perspective; same thing with electricians.” (10:00)

5. Direct Workforce Investments and Training Initiatives (13:13–16:36)

• Compass Data Centers has begun partnering with local community colleges (e.g., Texas State Technical College) to offer 12-week entry-level training for mechanical, electrical, and IT skills.
  • “In partnership with Texas State’s technical college and multiples of our partners…we already have the first cohort through the program and already employed at dramatically higher wages than the average.” (15:10)
• The model addresses both labor supply and community goodwill, creating jobs locally.

6. What Happens to Trainees After Construction Ends? (16:00–17:21)

• After campus construction (which can last five years), workers either find ongoing jobs maintaining the campus or travel to the next large project—mirroring the “journeyman” approach.

7. Alternative: Reducing the Need for Labor (17:21–19:49)

• Modular construction, prefab assemblies, and manufacturing approaches have shifted much of the skilled labor off-site, increasing safety, and enabling a more diverse (including more women) workforce.
  • “Instead of doing complete stick build in the field...snap it together like Legos…It’s much safer. It’s much more reliable. It’s fewer hours, far less risk to the people on site.” (19:06)

8. Limits of Prefab & Scale (21:52–24:54)

• Despite these advances, large data center campuses still require huge teams—building 10 x 40MW structures like the Dallas campus is a multi-year project:
  • “It takes us about nine months to build a single building… Each is about 40 megawatts, over 200,000 square feet—think 5 to 6 Sam’s Clubs under one roof.” (24:02)

9. Community Engagement & Transparency (26:19–30:39)

• The industry’s roots in secrecy (finance and government clients) have led to perceptions of opaqueness, now at odds with the need for community buy-in.
• Best practices: transparency, education, direct local investment, and being a “Class A developer” (i.e., a good corporate citizen).
  • “We think the same thing about the data center space. What’s a class A developer? They’re open with their community, helping their community, a good corporate citizen…” (28:36)
• Addressing local concerns—water use, grid impacts, noise—and the broader worry about “change” through proactive communication.

10. Countering Community Concerns & Mythbusting (30:39–34:13)

• Many facilities now use closed-loop cooling (not local water utilities) and pay for their grid upgrades to avoid shifting costs to local ratepayers.
  • “Not only do we want to pay to get the electricity to our campus, but…in the worst times, we want to be a resource to the grid.” (32:44)
• Education challenge: helping citizens understand their digital lifestyles depend on datacenter infrastructure.
  • “The Analog American…doesn’t realize they’re reading about data centers on their phone and tweeting about it on their phone and saying, I don’t want it.” (33:37)

11. Broader Stakes: Infrastructure and National Security (34:40–34:58)

• Maintaining robust digital infrastructure is positioned as vital for national prosperity and security.
  • “Having a robust digital infrastructure…I think makes us a better country, a safer country, and I think you can’t overstate how important it is.” (34:40)

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Notable Quotes & Moments with Timestamps

• On the scale of the labor problem:

  • “If we had all the labor in the world, we could go faster. But there’s without a doubt, especially in the electrician space, it’s a tough space to get enough bodies in enough hours.”
    — Raymond Hawkins (04:14)

• On labor mobility and site logistics:

  • “You see those in Landman, those camps where there’s just trailer and trailer after trailer. There’s a lot of that at data center sites…”
    — Raymond Hawkins (05:56)

• Wage inflation:

  • “The cost for electricians...has tripled in the time I’ve been in the business. Tripled in the last decade.”
    — Raymond Hawkins (11:19)

• Efficient market optimism—and limits:

  • “I believe that markets draw talent when there’s money to be had. And that is happening…But demand doesn’t [stop].”
    — Raymond Hawkins (12:10)

• On community partnership:

  • “Being transparent about where you go, embracing your community, offering to help in your community, being a good corporate citizen from a support and paying for the things that you’re going to use. To us, that’s all part of being a class A developer.”
    — Raymond Hawkins (28:36)

• On infrastructure education:

  • “The Analog American...doesn’t realize they’re reading about data centers on their phone and tweeting about it on their phone and saying, I don’t want it.”
    — Raymond Hawkins (33:37)

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Key Timestamps

| Timestamp | Segment / Topic | |------------|-----------------------------------------------------| | 03:31 | Catalyst begins; “rate limiter” discussion | | 04:14 | Ranking constraints: power, community, labor | | 05:34 | Labor acquisition, mobility, and housing | | 07:18 | Journeyman “travel” electrician phenomenon | | 08:34 | Electrician specialization & scale | | 11:19 | Wage escalation & labor cost | | 13:58 | Community college training partnerships | | 17:21 | Prefab/offsite construction as a labor solution | | 19:06 | Diversity & safety benefits in prefab | | 24:02 | Datacenter scale example: “5-6 Sam's Clubs” | | 26:19 | Community engagement practices | | 30:39 | Addressing water, grid, and abstract opposition | | 33:37 | “Analog American” and the hidden role of datacenters | | 34:40 | National security & digital infrastructure |

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Tone & Takeaways

The conversation is pragmatic, candid, and occasionally wry, with Raymond Hawkins emphasizing both operational reality and the need for systemic solutions—through both market incentives (higher pay, better training) and proactive community engagement. The AI-and-cloud datacenter boom collides with a generational skills gap, but also creates an opportunity for workforce development, economic growth, and more inclusive labor strategies, if stakeholders are willing to adapt.

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Summary in a Nutshell

The expansion of AI—and the digital infrastructure powering it—is increasingly running up against a bottleneck: not chips or power, but skilled electricians. The labor shortage is elevating costs, lengthening timelines, and forcing companies to rethink construction methods, talent pipelines, and relationships with local communities. Measures like modular construction and local workforce training are helping, but achieving sustainable growth will require ongoing innovation in both how we build and how we “sell” these megaprojects to the American public. The challenge: making the invisible backbone of our connected lives visible, credible, and valued by both workers and communities.

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Transcript

[Latitude Media Announcer]

Latitude Media covering the new frontiers of the energy transition.

[Shel Khan]

I'm Shel Khan. I invest in early stage companies at Energy Impact Partners. Welcome to Catalyst. So I I've noticed that I keep coming back to this question of what the current rate limiter on AI infrastructure growth is. As I'm sure you've heard if you listen to this podcast, I think the main candidates are demand. In theory, nobody really picks this right now. Chips, power and labor. The last one people mention a lot but then I've found kind of move right along whereas the others chips and power get a deep dive worthy of their rate limiting status. I think that's because labor feels to be maybe the most intractable of them all. To a first order, the AI industry can kind of throw money at the other problems. They can buy chips from AMD instead of Nvidia, they can try to convince TSMC to expand capacity or or on the power side, they could buy gas turbines to throw behind the meter from GE or Siemens or an Aero derivative supplier. Or they can sell out Bloom's fuel cells for years and years and years. Not to say those things are easy, but when it comes to labor, it's sort of a trickier problem. To be clear, lots of players in the market are trying to do something workforce investments of one kind or another. I think it's just a little bit outside their comfort zone. Anyway, the result of this is that I think workforce, particularly for electricians, is maybe the least appreciated but but certainly one of the most important bottlenecks in this market. And I wanted to dig into how it's actually manifesting and what one might do about it. For this one, I brought on Raymond Hawkins, who's the CCO at Compass Data Centers. That's coming up next.

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[Shel Khan]

Raymond, welcome.

[Raymond Hawkins]

Hey, glad to be here. Thank you.

[Shel Khan]

All right, my first question for you is my sense is that when people talk about like what's the rate limiter for the growth of data centers? You know, there's a list of things that people point to the chip supply chain being a big one, power and power availability being another. Maybe right now, community pushback being another one that has emerged.

[Raymond Hawkins]

Sure, that one's killed.

[Shel Khan]

Yeah. One of them though clearly is also labor in the workforce. But I think it gets the least airtime of them. If you're to think through for you guys, what stops you from skyrocketing your build out rate? Where does labor rank?

[Raymond Hawkins]

Yeah, today you listed probably 1A and 1B power and is the biggie. And the community has raced up the list pretty quickly. Didn't think we'd be at the White House six months ago talking about who pays for infrastructure on the grid, but we are. And right after that would be labor. And I would tell you, it's interesting, the question of, hey, is it stopping us? What it's doing is costing a lot more money and putting a strain on the schedule. Lots of, lots of management of where can we get the right people slotted in at the right time. If we had all the labor in the world, we could go faster. But there's without a doubt, especially in the electrician space. It's a tough space to get enough bodies in enough hours because most of our projects, we're trying to run them 24 7.

[Shel Khan]

Yeah. So what does that actually look like? I mean you alluded to it, but I'm interested in to get a little bit more detail. Like, you know, you're building a new data center, you're going to need a certain amount of trained electrician work, certain number of person hours, let's say, like what is the actual process to go find that workforce and then, you know, presuming that it is constrained, as you're saying how do you manage that?

[Raymond Hawkins]

Yeah, so we could probably find people with a better answer than me. But at the end of the day, it starts with our selection of GCs and. And it starts with us building a relationship in the marketplace and going through the bid process early on and going, hey, this is what our labor pools are going to look like. Let's think about this today. Let's think about this long before we get there. There is a lot of moving labor around. We have a large project going in Mississippi. When I tell people we have a large project going just outside Jackson, Mississippi, some people go, where's Jackson, Mississippi? So kind of the point of it's. It's not in downtown Atlanta or downtown Chicago. So there's lots of work ahead of time thinking about, where are we going to find the labor, what markets are we going to go get that labor, and is that labor willing to get picked up and moved? And then when we do pick them up and move, is there enough housing for them? I think sometimes a popular show, Landman. You see those in Landman, those camps where there's just trailer and trailer after trailer. There's a lot of that at data center sites where you are bringing the labor and especially in these tier 3, tier 4 markets and providing places for them to live and eat and stay so that they can be near the job. Because, you know, 40 miles outside Jackson, Mississippi, doesn't have 500, you know, highly trained electricians.

[Shel Khan]

Yeah. You know, I wonder whether. I guess this must be the answer. This must be, yes. But, like, is there a new category of, like, journeyman electrician who is, you know, going and spending six months at a time or whatever it is at living in a camp outside Jackson, Mississippi, and then in Abilene, Texas, and then wherever the next data center is going to be. Is this a whole new category of electrician?

[Raymond Hawkins]

We have seen teams that will manage a team environment where they'll roll guys in 30, 60, 90 days at a time. I spent four years in the Marine Corps. It feels a little bit like days of deployment where, hey, we're going to get ready, we're going to go get the ship ready, and it's going to go out and it's going to be in the water for six months, and then we're going to come back and switch everybody out. It feels a little bit like that. Right. Because the projects are so big and so long that we are bringing waves of talent, waves of skill into the marketplace, giving them a place to live, eat, sleep every day, and then going to the Job site where you're bringing literally an army of electricians and to your point, at all different levels. But yeah, the journey part of it or the travel part of it. Just like travel nurses. There's a lot of that.

[Shel Khan]

It was all over our marketplace you mentioned, especially electricians. I want to double click on that for one second. Because, you know, it's not just electricians that you need to build the data center. There's all sorts of construction that gets done. There's plumbing, other things like that. Is your sense that it's just that the supply, demand, balance of electricians is most acute. People do say electrician seems to be the one that like is the biggest bottleneck. Is, is that, is that why or is it just like disproportionate number of electricians that you need? Because the data center is basically a

[Raymond Hawkins]

ton of w. Yeah, I think it's a little bit of both. Right. Some of it is there's so many electricians and the level of electricians you need. Right. The panel that gets put on a data center doesn't look anything like the panel at my house. So you've got much more senior, much more capable electricians, one, and then two, you need hundreds of them. Because to your point, at the end of the day, the reason we charge rent based on kilowatts is it is the limiting factor in the building. And, and so one, we have really, really skilled electricians, really really high end electricians working on really, really, really big systems. It is the biggest piece of the skilled labor. Yes, there's heavy equipment operators and yes, there's plumbers and yes, there's sheetrock people. But all of those look much more like a traditional build. The electricians are much more involved and much more sensitive to the facility.

[Shel Khan]

That raises kind of an interesting question, which is, is the bottleneck predominantly just there are not enough electricians in the country, let's say, or is it that there are plenty of electricians, but actually you need this specialized, you know, higher level trained subset of that category. And if only you could. So like we're going to get to. What do you do about this? Right, but is. Is the fundamental thing you do about this, get more people trained as electricians or is it get more electricians trained as specialized electricians?

[Latitude Media Announcer]

Basically.

[Raymond Hawkins]

So. So in good AT&T fashion, I think it's. And I think we need more electricians and we need more senior electricians. It's both. It is not either or we. You could employ more electricians today, without a doubt. And you could employ more higher end electricians. Today, just the industry is swallowing up the capacity. I mean we just like you see in the utility provider struggling to keep up with our industry from a pace perspective. Same thing with the electrician, for lack of a word, industry or market has struggled to keep up the pace of the growth. I mean it's, it's hyperbolic. I mean it's on the news every day. So everyone knows all about it. But you know, to me I think about it just like the utility providers, those guys have never heard numbers this big and never heard numbers coming this fast. And that same problem is manifest, manifest in the generation, you know, transmission, distribution side of the business. It's manifest in who's going to wire this on the other end, are there?

[Shel Khan]

I mean you mentioned at the beginning it's like it's an expensive problem for you. I was having a conversation not too long ago with I'll say, an unnamed infrastructure person at one of the hyperscalers who said, I think in like half joking fashion, I think we're going to be paying electricians like 2 million bucks a year pretty soon. Are you seeing like bidding wars for talent? Is that kind of where we're at?

[Raymond Hawkins]

Without a doubt, yeah. The electrician, the cost for electricians, I'm going to give you a estimate, has tripled in the time I've been in the business. Tripled in the last decade.

[Shel Khan]

So you would think if you believe in an efficient market, that with some period of time the ability to earn triple wages, effectively becoming an electrician would sort of naturally result in a larger workforce. Maybe not overnight because it takes time to train. But like, you know, even in the absence of, of some of the more the clever and new programs that folks are, are pursuing, including yourselves, you know, the market would fix itself. You would think. Do you see that happening?

[Raymond Hawkins]

So, so I, I, so I agree. I believe in an efficient market. I believe that markets draw talent when there's money to be. And that is happening. We see it happening in basically every market where we work, where there are people creating training programs, creating fast tracks, creating methods and means for people to get up to speed and to supply more capabilities in the marketplace because the demand doesn't. I mean, and that's the other thing we talk about a lease that gets signed today. We're gonna be building that campus for four or five years. So being able to, I mean you could start with someone today and spend two years with them in an apprentices and they're still going to be useful on our campus. For three or four years while we're building there. These things don't go up overnight. It's a lot of work for a long period of time. And so that's one of the reasons we've tried to get into the markets where we are and start education programs because we're like, hey, we're going to be here for a while. We know we're going to need people at the other end of this. Let's, let's start training them ourselves.

[Shel Khan]

Yeah, so tell me more about that, what you guys are actually doing. And also, you know, one thing I've learned about this space is that, you know, it's a complicated model, or at least historically it's been sort of a complicated model for how new. Let's just focus on electricians still get trained and how they pay for their training, for example. Right. A lot of them will do it through, through federal grants and so on. It's not historically the case that like an employer would say, I need a ton of new electricians, I'll pay for their training or I will sponsor it or something like that. So that, that's kind of a new phenomenon. So you as the ultimate employer, or maybe not even the employer. Right, because maybe your GC is the employer. You're just the, you're just the one who needs them to exist. What is the role that you can play in, in manifesting them?

[Raymond Hawkins]

Yeah, so, so, you know, we talked about, I mentioned that, you know, we're building campuses and those are multi year projects. So we've looked in the markets and we've, you know, started the projects and we said, hey, what do we need to get this project finished? We need more skilled labor. We need more and you'll hear us use the phrase McK, mechanical, electrical and IT skills in a marketplace. And can we help the marketplace provide that skill? The biggest campus we have to date is just south of Dallas in a suburb called Red Oak. And we partnered with a community college there, Texas State Technical College, and said, hey, if we were able to convince our partners alongside us to build a curriculum, would you be willing to, for lack of a better word, pilot a program where we train in those three disciplines? And so in partnership with Texas State's technical college and multiples of our partners, because to your point, right, the end user customer is the general contractor or the electrical contractor. He's the one who needs the employees, our partners. So think of Schneider Electric or Siemens, people that, whose equipment needs to get plugged in by those electricians have all helped us Stand up. A school at Texas State Technical College. A program to train people. 12 weeks. You start off, you don't have to know anything about the data center business and you leave on the other end a entry level, but prepared to go work in the data center business. On the construction side, I can't remember if we just completed our second cohort or just started our third, but we already have the first cohort through the program and already employed and employed at dramatically higher wages than the average in the in where we're located. So for us it's, hey, there's a problem. And it's not only just, hey, we need people to help build our buildings, but how do we serve the communities we live in? It's really a way for us to do two things at the same time. Help the communities where we're trying to build infrastructure as well as solve a problem for the industry.

[Shel Khan]

I do wonder, I guess, you know, you're building one massive construction project in a given location. It may be, I mean, if you're in Northern Virginia, there's lots of these, right. But it may be that at this location outside Dallas or the 1 Outside Jackson, Mississippi, it's not like they're going to be a bunch of data centers popping up in that same region. So is the notion you're training people on this specialized set of things. They're going to have a few years of employment while you're building out this one big campus and then thereafter they go travel to wherever the next data center is going to be.

[Raymond Hawkins]

I think there's really two tracks after the campus is done. First of all, it's years. So that Dallas campus will take about five years to build. But to your point, it will come to an end. And for us, I think there's two tracks after that. There are long standing jobs on the campus that having mechanical, electrical or IT infrastructure skills you can deploy staying in your home market. And then the industry certainly has, to use your phrase, earlier opportunities for journeymen to move to projects all over. Right. There's Wyoming projects and there's projects yards in Mississippi. There are lots of more remote, large projects going on the panhandle of Texas. There's lots of big projects and we certainly expect there'll be people just like we had to do in Jackson, moving to go work there for four or five years.

[Shel Khan]

Yeah, there's obviously in theory two things you can do about a labor shortage for data center construction. One is find more people, which is what we've been talking about. But of course the other is require Less people, which has more to do with the design of the data center and can you prefab some of it and things like that. How much opportunity do you guys see in just minimizing the number of labor hours that are required in total, maybe particularly for electricians?

[Raymond Hawkins]

Yeah, I can tell you that's one that's been part of Compass from the very beginning. So I'm going to toot our horn a little bit. We viewed building data centers as really a manufacturing process from the very beginning of our business. Not a stick built construction project, but rather an assembly project. And our motivation there, I know you're asking about how do we manage it? Does it help with the headcount problem? Our motivation there was really a couple of things. Speed, higher quality and a more diverse workforce if you can. You know, we talk about putting a project in Jackson, Mississippi. Almost all of the people that are going to show up in Jackson and do the work are going to be men for lack of a just the dynamic at home. Someone's got to, you know, manage the stability of the household, take kids to school and whatnot. And so generally it's a more. The traveling journeyman worker is generally a man. And so by doing off site manufacturing, putting together large components of our data centers off site, it allows for a safer, more diverse and more reliable product. Right. Safer for the employees, more diverse because giving somebody, hey, you can be here from 8 to 5, you don't have to live in a different city. You can be home in the evening with your family. Allows us to employ more women in the business and it makes the business much safer to operate. Instead of doing complete stick build in the field, being able to test and commission and assemble off site and just roll it in on a truck. My boss gets really mad when I say this and snap it together like Legos. He does not like the Lego analogy, but it really works. For me, that is much safer. It's much more reliable. It's fewer hours, it's far less risk to the people on site. So for us, our motivation was to make the sites safer and faster. But what it has led to is a requirement for less skilled labor. Less skilled labor at the job site. There's skilled labor now, but it's now spread around manufacturing facilities with our partners.

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[Shel Khan]

what can you actually prefab like? I'm trying to imagine what are the Lego building blocks?

[Raymond Hawkins]

Yeah, yeah, good question. So almost everything in the electrical world and almost everything in the mechanical world are prefab fab for us now. So think of all the way out from where the utility comes onto the campus and I've got a transfer switch or I've got a transformer that I'm stepping down. We'll have all of that pre assembled on a skid so that you don't have to have somebody wire between the transfer switch and wire between that and the, you know, a transformer. We'll have the entire power center, everything in there that distributes electricity into the building all show up in one unit. We have our entire today both liquid or hybrid cooling. So both liquid and air shows up in a single packaged unit. So these things you're not having to put together any of it on site. All of our buildings are tilt up, you know, prefabricated so that the panels show up and we literally just crane them and set them in place. So no one's having to make any of the walls. Walls. No time to pour any forms or build any forms or pour any concrete. They all show up on a truck. Again, literally, just like Legos. Slab A goes in slot A, slab B goes in slot B. And they get lifted off a truck and slid into place. So almost the, the roof is the same way. We have prefabricated double tees that support the span. Literally, the whole building gets. Almost the whole building. It's about 85% of the building gets snapped into place. Showing up on the flatbed of a truck.

[Shel Khan]

That's. It's, it's remarkable that despite all of that, it's still a five year construction project. And also you still need all of these laborers. You're still having a. Sure. Like you've done so much to modularize it and prefab it, and yet there's still so much more that needs to be done.

[Raymond Hawkins]

Yeah, and the five years on the example in Dallas, that's because it's 10 buildings, right? So it takes us about, about nine months to build a single building. And, and, and then, and then, you know, you go, well, wait a minute, Raymond, that.

[Shel Khan]

What's the scale of a building? Sorry, what's like.

[Raymond Hawkins]

Yeah, yeah, 40 megawatts. A little over 200,000 square feet. Help people understand that. Think of your Sam's Club. Your Sam's Club's probably somewhere between 30 and 40. Maybe big ones are 50,000 square feet. So think 5 to 6 of your SAM clubs under one roof and lots of electricity.

[Shel Khan]

And you said 40 megawatts a piece, something like that.

[Raymond Hawkins]

40 megawatts is what we build today.

[Shel Khan]

So if you're building five of those, that's a 200 megawatt data center. Or if you're building nine of them, I guess you said that'd be a. Yeah, yeah.

[Raymond Hawkins]

The one in Dallas is 10. So it's 400 megawatts. We have lots of fives and lots of tens around the U.S. so lots of two hundreds and four hundreds. And, and in the world of data centers today, I remember been in this business 13 years. I remember we talked about kilowatts. It is completely normal to talk about gigawatt campuses today.

[Shel Khan]

Right. What's the rate limiter on the building or not the rate limiter? What stops you from having a gigawatt building?

[Raymond Hawkins]

So for us, we've chosen the form factor we have because we have some beliefs about how you impact the environment, how you impact microclimates around the building. So we've done a lot of study. Lots of CFD happens inside the building. Hey, computational flow dynamics. How am I going to move the energy around? How am I going to move the heat up? How high do I move the ceiling? Do I have to spend any money letting the heat move around the room? There's lots of study. What's going on inside the building. We've done a good bit of study on what goes on outside the building. When you have all of this equipment, not only exhausting, but also sucking air in and pushing warm air out, you can produce microclimates. So for us, we've chosen the 40 megawatt form factor to allow us to spread the buildings out and not impact the performance of the equipment. Can you do it in larger form factors? You can absolutely. Do I think that we'll move our form factor up? Not anytime soon. We felt like we figured out a sweet spot between the equipment we buy, the readily available nature of the equipment we buy, managing the building, that size. But certainly people that do purpose built buildings that are very specific engineering can build larger form factors. It's just not in our roadmap at this time.

[Shel Khan]

I think we should spend a minute on the community stuff. I mean, it's tied to the. You mentioned that that is one of the reasons to invest in workforce that's local and so on. But it's also obviously become. It's flared up as a really big issue. Now, what is your perspective on what best practices should be for a data center developer entering a community to position yourself to be able to actually build the thing and not get the kind of backlash that we're seeing right now.

[Raymond Hawkins]

Yeah, Shayl, I got lots of thoughts on this one, so I might ask you to tap the guardrails and keep me on message here. But I'd say the biggest one for us is our industry grew up being secretive. Not secretive because we had anything to hide from anybody. But think about the first two significant customers for large scale data centers. It was the financial institutions and it was the government. And they were secretive about where that large compute footprint sat. Purely from a security perspective, there was nothing to hide from the community. But you didn't want anyone to know where JP Morgan's bank processing big computer sat. So nondescript building on the edge of town that nobody knew who it was. So our industry grew up with this secrecy only because it was part of a security plan for very crucial Assets, whether financial or government, that's the history of the business. And we'd never been asked really to be transparent about where we built. So this notion that somehow the industry was hiding anything, it was part of the security fabric of the early customers. Now that there are data centers going in lots of places and there's lots of questions, the industry needs to push the envelope to say, hey, I need to embrace the communities that I'm in and I need to let people know what I'm doing. Because, and I'm going to give a weird analogy. People were not crazy about trains when they started. People thought that if you traveled 30 miles an hour, it would cause your heart to stop. And people said, hey, I don't want trains in my backyard. Edison had to give away the light bulb. No one wanted to buy it. We can't imagine that today. Right. But people had to be, he had to give a light bulb to someone to get him to use it. And I'm not comparing us necessarily to trains or light bulbs as far as transformative, but digital infrastructure is here. It's not going away. All of us want our cell phones. And what I think in the world of Compass, we think about a class A developer. What's a class A developer look like? He embraces the place where he's going. He embraces this community and says, hey, I want to be a good citizen in the community. I happen to be a corporation and I happen to run a building, but no different than being a port or a harbor or a trade or any other, a dam, water treatment facility. I'm going to be part of the infrastructure. I don't want to be a good community citizen in that infrastructure. Being transparent about where you go, embracing your community, offering to help in your community, being a good corporate citizen from a support and paying for the things that you're going to use. To us, that's all part of being a class A developer. We use that term internally to say, hey, how would you. In the commercial space, people think of class A office space and it means something. And we think the same thing about the data center space. What's a class A data center developer? They're open with their community, they're helping their community, they're a good corporate citizen in the community. Helping not just from an infrastructure standpoint, but helping from a education, training, jobs, all of those things.

[Shel Khan]

That makes sense to me. I think speaking of education, I guess the other sense that I have is that there are some specific concerns that communities have about data centers. And then there's some amorphous ones that are not really localized but are a thing. Like the specific concerns that you hear about are things like water consumption, impact on electricity bills, things like that. And then there's some amorphous ones that are like, this is bad for my community. And I don't totally understand why. I think it's bad for my community. But it's, but it's bad. And, and I feel like there's a, there's a big education challenge, right? You have to convince everybody that their rates are not going to go up, that the water consumption is not going to be an issue, that the noise won't be an issue, whatever it is, the specific things. And then you also just got to have the figure out a way to give this generalized sense of this is actually good for us and not bad for us. And I wonder how you approach the education community. Education.

[Raymond Hawkins]

So I think you nailed three of the big ones. So we get asked about water. You know, I talked about, you know, being transparent, you know, secrecy. You, you, you mentioned infrastructure, the cost of electrical infrastructure. The other one is, you know, do I need this? Is this generally this bad for me? What's that big building over there that looks, you know, weird? Do I need this in my community? Let's go through them real quick. Water. So I'm going to Quick Compass commercial. We've been waterless cooling since the day we started. You know, the industry with GPUs has forced, you know, a higher, you know, a more dynamic heat rejection model. So liquid cooling comes into play. We just do it with closed loops. So we're not a constant user of utility water in the, in the marketplace. We think that's important. Frankly, most of the industry is going that way, but it's completely fair for people to ask the water question. I just think you need to talk with your developer, talk with the data center in your space and make sure that the water they're using is not coming out of your utility. And it's closed loop in that regard. I think you largely handle the water conversation. Paying for the electrical infrastructure. For us, we've taken it on ourselves to pay for the infrastructure that delivers power to us. Right? There's generation that's owned by generally the utility. Then there's transmission and distribution and then the substations to get your site powered. We've taken the position from our very beginning that we pay for anything downstream to get to us and put that on our bill so that it doesn't impact ratepayers. And then we take that one step further. We also want to be a resource to the marketplace. I saw a video you did about your electric car sitting in your house and how much storage was in that facility in the car. I think you compared it to wall units from Tesla. Same thing, right? I built a data center. I got tons of generation on site. Me and my customer paid for that generation. Not only do we want to pay to get the electricity to our campus, but in. In the worst times, we want to be a resource to the grid. We want to be able to generate or, you know, or turn off our need for grid power and generate it ourselves. So we try to collaborate in the markets and say, hey, how can I resource for the grid? In your most strained times, whether it's Snowmageddon in Texas or whether it's summer, July in Phoenix, we want to be able to say, as a class A developer, we want to be able to say to the utility provider as well as the customers around, hey, not only are we going to pay our own way, we also want to be able to help the grid in the toughest times. So that's water, that's electricity, and then the hey, I'm just not sure data centers are good for me. It's really a big education, right? This is not my phrase. I read it on an article yesterday, the Analog American, the American that doesn't realize they're reading about data centers on their phone and they're tweeting about it on their phone and saying, I don't want it. And all of that happened in a data center somewhere. All of the things that you're reading and all of the things you're tweeting and saying you disagree with all took place in a building somewhere called a data center. And not to be ugly about it, but just to say, hey, realize we're not going backwards. We're not going to get away from a digitally connected world. And how do we partner with that digital infrastructure in such a way? How do we partner with our communities in such a way that doesn't scare people? Hey, this is a good thing for you. It's a good thing for the business, it's a good thing for your community. And can we do it in a way that makes everybody feel comfortable and safe?

[Shel Khan]

Raymond, this was a lot of fun. And I will say I really appreciate the way that you frame this, both from the labor perspective and the community perspective. I think there's a lot. It's a tough road for data center developers right now from both the practical perspective of getting enough people and then from the perspective of getting enough buy in and license to operate. So there's a lot of learning to be done there. So I appreciate you thinking hard about it.

[Raymond Hawkins]

Yeah, absolutely. It's important for us. Important for us as a business, but certainly important for us. I mean, we could take it all the way to national security. Right. I think having a robust digital infrastructure I think makes us a better country, a safer country, and I think you can't overstate how important it is.

[Shel Khan]

Yeah. All right, Raymond, thank you for your time.

[Raymond Hawkins]

It's been great. Thank you so much.

[Shel Khan]

Raymond Hawkins is the Chief Customer Officer at Compass Data Centers. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. This episode is produced by Max Savage Levinson. Mixing and theme song by Sean Marquand. Ann Bailey edits the video version of the show. Stephen Lacy is our executive editor. All of our episodes are now on YouTube. Subscribe to Latitude Media for episodes of this podcast and open circuit. You can find the audio version of the show anywhere you get your podcasts. I'm Shel Khan and this is Catalyst 1.