Chicago city leaders fight over local data storage
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Illustration: Lindsey Bailey/Axios
A new City Council ordinance would push data centers to keep local data right here in Chicago.
Why it matters: Data centers are massive storage facilities that house information from the city's computer networks, including more sensitive details like financial and medical records.
The big picture: The new ordinance, which would be the first of its kind in the country, would require local data to be stored inside the U.S., with incentives to keep it within city limits.
- Supporters say it would generate revenue from property taxes on the big storage facilities.
- The ordinance would give vendors a 4% credit if they store the data in Chicago.
Zoom in: The city pays millions of dollars to companies to store its data, but there is no requirement for where they store it.
- Right now, those massive data storage facilities are outside the city, sometimes in other states.
- Illinois has 154 data centers, 94 of them in Chicago.
What they're saying: "This data residency ordinance is a tool the city can use to bring in new revenue, good jobs and economic development in communities that need it the most," Ald. Gilbert Villegas, the ordinance's sponsor, said in a statement.
The intrigue: Villegas believes the ordinance would help with short-term construction jobs in South and West Side communities.
- The data centers need wide swaths of land to build on, something those communities have an abundance of.
The other side: This isn't a slam dunk. The Chicago Chamber of Commerce is wary of any ordinance that puts extra regulation on businesses and worries the residency rules would jack up the costs for both the data center and the city.
- "The data residency ordinance will give data centers a reason to cross Chicago off their list for site selection," the chamber said in a statement.
- "Data residency is a fundamentally flawed and antiquated concept that contradicts modern data processing and storage practices."
Zoom out: Data centers have spread like crazy throughout the U.S., causing huge demands for energy. A new study suggests that the data centers and other energy-dependent industries will increase electricity use in the U.S. by 20% by 2028.
What's next: The City Council is set to vote on the ordinance on Wednesday.