AI project halted early, without much clarity

For years, as the saying goes, the three most important things in real estate have been location, location and location.

Why? Because your location is fixed — most other things can change.

Enter Île-des-Chênes, and the plan — now halted by the Kinew government — for a massive data centre there.

For the proponents of the site, Jet.AI and Consensus Core, the location had everything they needed: first, purchasable land, but also, particular amenities.

Here’s a description of what the site had to offer, according to Jet.AI’s promotional material: “The site benefits from immediate access to electrical infrastructure, natural gas, major east-west fiber routes, and a converter station. The planned campus supports multi-hundred megawatt development potential, supplied by both grid power and natural gas.”

There’s a Manitoba Hydro substation across the road from the land, a natural gas pipeline even closer and a pipeline T-junction just down the road.

It’s got everything the proponents want — in fact, they specifically are on the hunt to “identify sites with the right profile: acreage, power proximity, fiber connectivity, natural gas access, and favourable local conditions,” and not just in Manitoba.

Truth is, Jet.AI and Consensus Core are more landlords than anything else: they find the best combination of services to establish a data centre location, assemble the project and lease it out. And, as Jet.AI points out on its website, “Construction begins only after tenants are secured.”

Instead of “If you build it, they will come,” it’s more like “If they come, we will build it.”

It’s also kind of like running a mall, but with computers instead of stores and customers dialing in from hundreds of miles away.

The Manitoba project, until Premier Kinew’s announcement that the province wouldn’t support it moving ahead, was at phase two, which the proponents describe as: “Secure site control and power — the single most critical constraint in data centre development. Advance power studies, utility interconnection, and grid access.”

But after that, details get a little fuzzy. In fact, the details are a little hard to come by.

One thing that Consensus Core says shouldn’t be a concern is the need for huge amounts of water for cooling purposes: “Our facility would use modern closed-loop liquid cooling systems, meaning there would be zero net water usage from operations.”

The proponents are simply looking for an alignment of the capital stars — the most benefits at the lowest cost.

But just because those stars align for those who want to build massive data centres doesn’t mean those same stars have aligned for this province, or for those who will be its near neighbours.

Should Premier Kinew have nixed the Île-des-Chênes data centre so early in the process? He probably has more information than we do about the plan, and knows more about the proponents.

Because there is little concrete information available.

How much power the facility will use, how much it will generate itself with natural gas, how much natural gas it expects to use — that, and more, isn’t clear yet.

It’s early enough in the process that there is no environmental assessment document filed, no information from Manitoba Hydro on the impact the facility may have on the grid and on power demand.

Arguments will be made that data centres and AI are the future, and that if we don’t jump on the train, Manitobans and Canadians, for that matter, will be left behind.

But it’s a decision that should be made to the benefit of Manitoba and Manitobans, not to the benefit of those who threw a cost-analysis dart, that happened to hit Île-des-Chênes.

And location? Well, it’s only a benefit if you can actually get permission to build.