A Guide to AI Datacenters in the Last Frontier By Keith Dobson Article 1 of 10: The Primer Introduction: Alaska at a Crossroad Alaska stands at an interesting crossroad. Since and even before statehood, our economy has depended heavily on extracting resources from the ground—oil, natural gas, minerals—and bringing visitors to experience our amazing beauty through tourism. Meanwhile, 90+% of the food we eat arrives on barges and trucks from thousands of miles away. It’s a precarious balance, and one that leaves many, if not most, of our communities vulnerable to boom-and-bust cycles. What if Alaska could develop a new tech sector that reaches beyond Anchorage into even small rural communities? What if our cold climate, abundant energy resources, and strategic location between Asia and North America could become our advantage during this period of transition to AI powered everything? What if the same communities struggling with high energy costs could find new opportunities and lower energy bills, with the introduction of micro AI datacenters? This might sound like science fiction, but it’s already happening in Alaska. Right now, in the fishing community of Cordova, there is a small (micro) AI datacenter online, providing new high paying jobs, driving down residential energy bills and engaging with the local community to advance technology education and more. AI Datacenters 101: What Are We Even Talking About? Let’s start with the basics. Everyone has heard the term “artificial intelligence” or “AI” thrown around a lot. Maybe you’ve used ChatGPT to help write an email, or played with Google Gemini to create fun and interesting art, or witnessed social media suggest content you may enjoy. All of that is AI at work—computer systems that can learn, make decisions, solve problems and even predict outcomes. So what is really happening behind the curtain: AI doesn’t just float around in the clouds like magic. It needs physical computers and lots of them, all running around 24/7. These computers process enormous amounts of data or tokens (a token is a tiny chunk of text (not always a whole word)) that an AI model reads and predicts one-by-one. AI Models don’t “see” letters or words directly—they see tokens and then uses those patterns to make predictions, answer questions, and automate tasks, learning patterns and making predictions. Whether it’s helping doctors diagnose diseases, optimizing shipping routes, or translating languages in real-time, AI is doing real work that requires significant computing power. That’s where datacenters come in. Think of a datacenter as a warehouse filled with rows of powerful computers (called servers), working together to process information. Some datacenters store your photos and emails. Others run websites, social media and business applications. And increasingly, datacenters are running AI systems that need even more computing power than traditional tasks. An AI datacenter is specifically designed to handle the intense calculations that AI requires. Instead of regular computer processors, these datacenters use specialized chips called GPUs (Graphics Processing Units) that are exceptionally good at the mathematical computation that AI needs. The “Micro” Matters: Right-Sizing for Alaska Now, when most people think “datacenter,” they picture massive buildings the size of football fields in places like Virginia or Washington, consuming enough electricity to power a small city. Those are called “hyperscale” datacenters and the companies like AWS, Google and Microsoft are “hyperscaler” providers which own the massive datacenters. But there’s another category that’s perfect for Alaska: micro-datacenters. These are smaller, modular operations that might consume between 250 kilowatts and 1 megawatt of power—roughly the same electricity as 200 to 800 homes. That might still sound like a lot, but it’s a scale that actually makes sense for Alaska communities. Here’s what’s exciting: these micro datacenters can often fit into existing buildings. Consider that old school that closed down or that government building that’s sitting half-empty? With some renovation, these spaces could house a micro-datacenter. We’re talking about repurposing what we already have rather than building from scratch. Why Alaska? Why Now? You might be wondering: “Why would anyone build a datacenter in Alaska? Isn’t that backwards? Shouldn’t they be building in the lower 48 where everything is closer?” Great question! It turns out Alaska has some serious advantages that are making people take notice. The Cold Factor: Nature’s Free Air Conditioning Depending on conventional air-cooled or newer liquid-cooled AI datacenters, the operational cost dedicated to cooling can run from 10%-40%. It turns out that all those computers working 24/7 generate tremendous heat, and keeping them cool is one of the biggest challenges—and expenses—that datacenter operators face. In Alaska? We’ve got cold to spare. Our climate provides natural cooling for much of the year. In Fairbanks, when it’s -40°F outside in winter, you’re not paying for air conditioning to cool your servers— you simple open the door (so-to-speak). Even in summer, Alaska’s temperatures are far more manageable than most places, which gives us a fundamental economic advantage. Strategic Location: The Center of the North Pull up a globe (not a flat map—trust me on this). Look at Alaska’s position from above. We sit between Asia and North America, with fiber optic cables that can connect in multiple directions. As Asia’s economies continue to boom and demand for AI services grows, Alaska could serve as a strategic hub—a bridge between East and West. Similarly, Iceland realized their strategic geographic advantage years ago. Despite being a tiny island nation, Iceland now hosts major datacenters serving European and American markets. They leveraged their cold climate and geothermal power to attract business. Alaska could follow a similar playbook, but with even more diverse energy sources and a better position to serve the booming Asia-Pacific market. Energy Abundance: More Than Just Oil Alaska might surprise you with our energy diversity. Yes, we have natural gas and coal. But we also have: Hydroelectric power: Some of Alaska’s communities have abundant, clean hydro power. Southeast Alaska communities like Juneau and Sitka have more hydro capacity than they know what to do with on some days. Geothermal potential: The Ring of Fire runs right through Alaska. While not fully developed yet, geothermal energy is the holy grail—clean, baseload power that runs 24/7. Further efforts need to be developed to bring this power source online and in close proximity to one or more of the fiber paths traversing our state. Wind resources: Parts of Alaska have world-class wind resources, particularly in coastal and island communities. Excess capacity: Here’s the potential today—some Alaska communities actually have excess power generation sitting idle, especially during off-peak times. What if that excess power could earn revenue instead of going to waste? Companies like Greensparc have built their entire business model around this concept: finding communities with excess power capacity and deploying small datacenters that put that power to productive use. It’s a win-win—the datacenter gets reliable power at a reasonable cost, and the community gets a new customer that helps bring down electricity rates for everyone else by sharing infrastructure costs. Building Blocks: What Does It Actually Take? Let’s get practical. If a community wants to explore hosting a micro-datacenter, what does it need? Think of it like a recipe with several essential ingredients: Ingredient #1: Reliable Power (250kW to 1MW) First and foremost, you need electricity—a lot of it, all the time. A micro datacenter in the 250-kilowatt range needs consistent power, 24 hours a day, 365 days a year. The good news? It doesn’t necessarily need to be cheap power (though that helps), because, as mentioned previously, cost of cooling is less expensive in Alaska. What matters more is reliability and predictability. Different communities have different power sources: Cordova runs on hydroelectric power from two lakes Fairbanks has access to natural gas and coal Some communities use diesel generators (though this is expensive) Others are exploring combinations of wind, solar, and battery storage (micro-grids) The key is matching the datacenter size to what the community’s power infrastructure can reliably support. A 250kW datacenter is like adding a medium-sized commercial building to the grid—significant but manageable for most established communities. Ingredient #2: Fiber Optic Connectivity A large amount of data needs to travel, and it travels best through fiber optic cables—thin strands of glass that carry information at the speed of light. The good news is that Alaska has been steadily building out fiber optic infrastructure over the past decade. Major carriers serving Alaska include: GCI: The largest provider, with extensive fiber throughout the state, including the Aleutian Fiber Project connecting island communities MTA (Matanuska Telephone Association): Serving Southcentral Alaska, with terrestrial connections to the Lower 48 via Calgary and Chicago. ACS (Alaska Communications): Providing fiber connectivity across the state Quintillion: Operating Alaska’s Arctic subsea fiber network, connecting communities from Nome to Utqiagvik (Barrow) and beyond (future plans to extend fiber to Japan) Far North Fiber :Future plans to connect Japan to Alaska to Europe via the Northwest Passage Communities already connected to fiber include: Southeast: Juneau, Ketchikan, Sitka, Petersburg, Cordova, Wrangell Southcentral: Seward, Whittier, Anchorage, Eagle River, Palmer, Wasilla, Houston, Willow Interior: Fairbanks, North Pole Arctic Coast: Utqiagvik (Barrow), Wainwright, Point Hope, and others via Quintillion If your community has fiber, you’re already ahead of the game. If not, that’s a bigger conversation about infrastructure investment, but one worth having given the many benefits fiber brings beyond just datacenters. Ingredient #3: Physical Space You don’t need a brand-new high-tech facility. A micro-datacenter can be housed in: Closed or underutilized school buildings (Alaska has several) Vacant warehouse space Unused sections of government buildings Former industrial facilities The space needs to be: Secure (good locks, monitored access) Climate-controlled (easier in Alaska than elsewhere!) Accessible for maintenance Connected to power and fiber One of the beauties of the micro-datacenter model is that companies like Greensparc deliver pre-built, modular units that can be installed relatively quickly in existing structures. You’re not building a datacenter from scratch, you’re essentially installing a very sophisticated piece of equipment in a building you already have. Ingredient #4: Skilled Workforce Let’s address an important question: who runs these things? Do you need a team of Silicon Valley engineers in your community? The short answer is no. The long answer is more interesting. A micro datacenter needs a small team of people with technical skills, but these are skills that Alaskans already have or can learn: Electrical knowledge: Understanding power systems, backup generators, and battery systems HVAC skills: Managing heating, ventilation, and cooling systems IT basics: Understanding networks, firewalls, servers, and basic troubleshooting Physical security: Monitoring access and keeping equipment safe Think about it this way: if your community can maintain a power plant, a water treatment facility, or a modern school building, you have most of the baseline skills needed. The specialized AI and cloud computing work can be done remotely by experts located anywhere. What you need locally are reliable, technically-minded people who can keep the physical infrastructure running smoothly and swap out failed components when needed. This creates real jobs, good-paying technical jobs, in Alaska communities. And because the skillsets overlap with other infrastructure needs, it’s an investment in your workforce that pays dividends across sectors. The Latency Question: Does Distance Matter? Here’s a term you’ll hear in tech circles: latency. It means the time delay between when you send data and when you receive a response. When you click a link on a webpage, latency is how long it takes for that page to start loading. For some applications, latency matters a lot. If you’re playing a competitive video game or conducting a video call, or robotics, even small delays are noticeable and annoying. For these “real-time” applications, you want the datacenter to be as close as possible to users. But here’s the thing about AI workloads: most of them don’t require split-second responses. When an AI is training on medical images to learn how to detect cancer, or analyzing satellite imagery to monitor wildlife populations, or processing weather data to make predictions, it doesn’t matter if the computation takes a few milliseconds longer. The work gets done just as well whether the datacenter is in Virginia or Alaska. This is called “latency-tolerant” computing, and it’s perfect for Alaska’s situation. We’re not trying to compete for applications that need instant responses. Instead, we’re targeting the massive amount of AI computation that just needs to get done reliably and efficiently—and can benefit from Alaska’s cold climate and energy resources. Since 2024, here is a brief summary of the financial investments/commitments into AI datacenters in the lower 48. Hyperscalers: Microsoft: ~$80B AWS: $30B Google: $34B Meta: $64–72B AI platforms & supply: OpenAI/Oracle/SoftBank Stargate: $500B+ NVIDIA: $100B REITs/colo developers: Equinix >$15B+ Fermi REIT: $715M That said, Alaska’s position is actually better than you might think. The distance from Anchorage to Tokyo is shorter than from Anchorage to Washington, D.C. For AI services targeting Asian markets, Alaska’s “remote” location is actually strategically advantageous. Waste Heat to Treasure: The Greenhouse Connection Here’s where things get really interesting for Alaska communities. Remember how we said datacenters produce a lot of heat? In most places, that heat is just blown into the atmosphere—wasted energy. But in Alaska, where food security is a real concern and growing seasons are short, that “waste” heat becomes incredibly valuable. Imagine: a micro-datacenter sits next to a greenhouse. The hot air and hot water from cooling the datacenter’s computers are piped into the greenhouse, keeping it warm year-round. Suddenly, you’re growing tomatoes, lettuce, herbs, and other fresh produce in January. A community that imports 90% of its food is now growing some of its own, creating jobs, improving food security, and reducing the cost and environmental impact of shipping produce thousands of miles. This isn’t just theory. It’s being done successfully in other cold climates. And with Alaska’s long summer daylight hours combined with year-round heat from a datacenter, the growing potential is remarkable. But greenhouses aren’t the only possibility for datacenter heat reuse: Fish Hatcheries: Alaska’s fishing industry is critical to many communities. Hatcheries need warm water to raise salmon fry. Datacenter heat could support these operations, contributing to sustainable fisheries management. Lumber Drying: Some Alaska communities have lumber operations that need to dry wood before it can be used or sold. Heated air from datacenters can accelerate this process. District Heating: In smaller communities, datacenter heat could be integrated into district heating systems, warming municipal buildings, schools, or community centers. Aquaculture: Beyond hatcheries, there’s growing interest in land-based aquaculture—raising fish or shellfish in controlled environments. Heat from datacenters could make these operations more economically viable in Alaska. Recreation: Some communities have talked about using datacenter heat for swimming pools or recreation centers—extending the usability of these facilities year-round. The beauty of this approach is that it transforms an “externality” (waste heat) into a community asset. Instead of being just a technology project, the datacenter becomes integrated into the community’s food system, economy, and quality of life. Show Me the Jobs: Economic Benefits for Communities Let’s talk brass tacks: what’s in it for Alaska communities? Direct Employment A 250kW micro datacenter might employ 2-5 full-time workers. A 1MW facility might need 5-10. Now, I know what you’re thinking, that doesn’t sound like many jobs. And you’re right to question it. Critics have pointed out that datacenters don’t create the massive employment numbers like other industries. But let’s look deeper at the quality and nature of these jobs: Technical positions paying $60,000-$120,000+ annually in communities where good jobs are scarce. These are year-round, stable positions that aren’t seasonal like fishing or tourism. They’re positions that can support families and keep young people in rural Alaska rather than forcing them to move to Anchorage or the Lower 48 for opportunities. Positions include: Datacenter technicians (managing hardware, swapping components) Power systems operators Network and Security administrators Facilities managers Facility Security personnel Construction and Installation Before operations begin, there’s a construction phase. Renovating buildings, installing equipment, running electrical and fiber connections—this creates temporary but well-paying construction jobs that keep money circulating in the local economy. Indirect Economic Effects This is where the math gets interesting. When you add a large, stable customer to a power grid, it can help reduce rates for everyone by spreading fixed infrastructure costs across more kilowatt-hours sold. In some Alaska communities where electricity costs are prohibitively high, this could make a real difference for residents and other businesses. Additionally, the presence of reliable, fast internet infrastructure and local computing resources can attract other businesses and remote workers. Suddenly, your community becomes a place where tech entrepreneurs could locate, where remote workers for national companies might choose to live, and where local businesses have access to cutting-edge tools. Training and Education Perhaps most importantly, having a datacenter in your community creates educational opportunities. Students can see careers in technology as realistic options. Technical training programs can focus on skills that have immediate local application. Partnerships with Native corporations can ensure that Alaska Natives have pathways into these technical careers. Partnership with Native Corporations Alaska Native Regional Corporations and village corporations, established under the Alaska Native Claims Settlement Act (ANCSA), are major landowners and economic engines in Alaska. These corporations have the resources, land, and long-term thinking that make them natural partners for datacenter development. A Native corporation might: Provide land or existing buildings Co-invest in datacenter development Employ shareholders in datacenter operations Use datacenter heat for corporation-owned greenhouses or other enterprises Benefit from improved internet infrastructure across their region These partnerships could help ensure that the economic benefits of datacenter development flow to Alaska Native communities that have historically been underserved by economic development. Reality Check: The Challenges We Can’t Ignore If this all sounds too good to be true, well, let’s pause momentarily and be honest about the challenges. Alaska doesn’t need another overpromised, underdelivered economic development scheme. Challenge #1: High Electricity Costs Alaska’s electricity costs are among the highest in the nation. While datacenters can help bring costs down over time by adding load to the grid, that chicken-and-egg problem is real: datacenter operators want low-cost power, but Alaskans need the datacenter to help lower costs. The solution lies in targeting communities that have: Excess generation capacity (power plants running below their potential) Low-cost generation sources (hydroelectric, geothermal, stranded gas) Consider economic incentives to attract large commercial customers Challenge #2: Fiber Infrastructure and Redundancy While Alaska has made great strides in fiber deployment, we still face challenges: Not all communities have fiber access Some connections are vulnerable to breaks (Quintillion’s subsea cables have experienced ice damage) True redundancy (multiple paths for data to travel) is limited Major datacenters typically require redundant fiber paths—if one cable gets cut, data can still flow through alternative routes. Alaska is working toward this, but we’re not there yet for most locations. This limits us to certain types of datacenter operations and makes us less competitive for applications that require extreme reliability. The good news? Alaska is actively working on this. Quintillion is planning additional fiber routes that would create true redundancy. MTA has terrestrial connections to the Lower 48. As these networks mature, Alaska’s competitive position improves. Finally, there needs to be more work done to improve peering between the various Alaska based telecom providers to optimize the flow of traffic within the state and to provider for seamless failover from one provider to another without the need to hair-pin traffic via a lower 48 network peering exchange or rely on customers to build their own private cross-connect. The good news is that work is underway now to address this with public peering at AlaskaIX. Challenge #3: The “Few Jobs” Criticism Let’s be direct: critics are right that datacenters don’t create thousands of jobs. If your community is looking for a silver bullet that will employ hundreds of people, this isn’t it. But that criticism misses important context: The jobs created are high-quality, year-round positions The indirect economic benefits (lower electricity costs, improved infrastructure) benefit everyone For small communities, even 5-10 good jobs matter The skills developed have applications beyond just datacenters The heat reuse opportunities can create additional jobs in agriculture and other sectors The right way to think about micro-datacenters is as one piece of a diversified economic strategy, not as a wholesale replacement for existing industries. Challenge #4: Community Fit and Readiness Not every community is ready for or interested in datacenter development. Some communities might prefer to focus on their traditional economies. Others might lack the technical workforce or infrastructure. Some might have concerns about an industry that feels foreign or disconnected from their values and way of life. This is why community engagement and leadership from local decision-makers—including tribal councils, Native corporations, city councils, and business leaders, is essential. A datacenter should be a community choice, not something imposed from outside. The Path Forward: Communities with Opportunity Based on existing infrastructure and resources, certain Alaska communities are particularly well-positioned to explore micro datacenter development: Southeast Alaska Juneau: State capital, abundant hydro power, fiber connectivity, stable government workforce Ketchikan: Strong hydro resources, fiber access, tourism economy that could benefit from improved tech infrastructure Sitka: Excellent hydro power, fiber connectivity, active Native corporation partnerships Petersburg: Fishing community with fiber, could benefit from food security through greenhouse integration Cordova: Already home to Alaska’s first micro-datacenter pilot project—a proof of concept in action Southcentral Alaska Palmer/Wasilla/Houston/Willow corridor: Road system access, fiber availability, proximity to Anchorage markets, agricultural community that could integrate greenhouse operations Whittier: Unique community with fiber access and potential heat reuse for the city tunnel operation, commercial resort partnerships, or community buildings Interior Alaska Fairbanks: University town with technical workforce, multiple fiber providers, potential for partnerships with UAF research, cold winter climate advantage, access to North Slope natural gas Arctic Alaska Utqiagvik (Barrow): Quintillion fiber terminus, extremely cold climate, potential for partnerships with North Slope Borough and Arctic research institutions Each of these communities brings different strengths and would benefit in different ways. The key is matching the opportunity to local conditions, resources, and priorities. Looking Ahead: The Article Series This primer has covered the fundamentals: what AI datacenters are, why Alaska is well-positioned to host them, what it takes to build them, and what benefits and challenges communities might face. But the really exciting part is exploring how AI itself—powered by datacenters in Alaska and elsewhere—can transform specific industries and services across our state. Over the coming articles, we’ll dive deep into concrete applications: Article 2: AI in Public Policy and Public Services How can Alaska’s state and local governments use AI to improve services, reduce costs, predict legislative outcome, identify overlapping regulations, and better serve citizens? From optimizing snow removal routes to predicting infrastructure needs, AI offers tools for smarter governance in Alaska’s challenging environment. Article 3: AI in Healthcare Alaska faces unique healthcare challenges: vast distances, small populations, limited specialists. AI-powered telemedicine, diagnostic tools, and health monitoring could help bridge these gaps and improve outcomes for Alaska Natives and rural residents. Article 4: AI in Retail Managing inventory and supply chains in Alaska is notoriously difficult and expensive. AI can optimize ordering, predict demand, reduce waste, and help stores keep what people need in stock despite the challenges of geography. Article 5: AI in Legal Services Access to legal services is limited in rural Alaska. AI-powered tools can help people understand their legal rights, fill out documents correctly, and access justice even when lawyers are hundreds of miles away. Article 6: AI in Transportation From predicting weather impacts on rural airports to optimizing marine highway schedules, AI can make Alaska’s complex transportation networks safer and more efficient. Article 7: AI in Tourism Alaska’s tourism industry is vital but seasonal. AI can help with marketing, booking optimization, visitor experience enhancement, and extending the season through better planning and services. Article 8: AI in Education Rural Alaska schools face teacher shortages and limited resources. AI-powered personalized learning tools can help students progress at their own pace and access educational content that might otherwise be unavailable. Article 9: AI in Fish and Game Management Sustainable management of Alaska’s fish and wildlife resources requires enormous amounts of data collection and analysis. AI can help with population monitoring, habitat assessment, and predicting seasonal impacts on species. Article 10: AI for Remote Workers and Startups Alaska’s future includes digital entrepreneurs and remote workers who can live here while serving global markets. AI tools and local datacenter infrastructure can support a growing tech ecosystem that diversifies our economy while keeping Alaskans in Alaska. Conclusion: An Invitation to Imagine Alaska has built its prosperity on bold vision and hard work: the gold rush, the oil pipeline, the fishing industry that feeds the world. Each of these involved looking at Alaska’s unique characteristics and finding opportunities where others saw only obstacles. The datacenter opportunity follows this tradition. Alaska’s cold climate, strategic location, energy resources, and innovative spirit position us to participate in the digital revolution in ways that few expected. Will every community host a datacenter? No. Will datacenters solve all of Alaska’s economic challenges? Absolutely not. But for communities with the right infrastructure, leadership, and vision, micro-datacenters represent a real opportunity to: Create good technical jobs that keep young people in Alaska Put excess energy capacity to productive use Improve food security through heat-reuse greenhouses Upgrade internet infrastructure that benefits everyone Partner with Native corporations on economic development Diversify away from boom-and-bust resource extraction Build technical skills and workforce capacity The technology is proven. The business model works in similar cold-climate regions. Companies are already investing in Alaska. The question now is whether Alaska communities will seize this opportunity or watch it pass by. For business leaders, this is a chance to think creatively about infrastructure assets and partnerships. For community organizers, it’s an opportunity to bring new economic vitality to your town. For Native corporation leaders, it’s a potential path to self-determined economic development. For politicians, it’s a way to support rural Alaska with sustainable, long-term opportunities. For investors, Alaska offers genuine advantages and first-mover opportunities. For educators, it’s a chance to prepare students for 21st-century careers right here at home. The conversation is just beginning. The pilot projects are proving the concept. The infrastructure is steadily improving. Now it’s time for Alaska to decide: Will we be leaders in the next wave of economic development, or will we sit on the sidelines? We’ve thrived on the edge of the world before. We can do it again, this time with fiber optics, AI, and year-round tomatoes grown with datacenter heat. The future is being written. Alaska can help write it. About the Author Keith Dobson is an Alaska-based IT leader with nearly 40 years in consulting, engineering, sales and management. At INVITE Networks, he advances responsible, forward-looking AI to strengthen both private and public services. A Big Lake resident and active volunteer, Keith is passionate about civic engagement and public policy—helping communities across Alaska use technology for practical solutions that deliver better outcomes for all Alaskans.
