Georgia has placed itself squarely in the cockpit of the new, electrified economy. So far in 2024, it’s been a bumpy ride.
A year ago, many of us were downloading ChatGPT, and some of us were still trying to figure out what “AI” stood for. In only a matter of months, we’ve seen what a disruptive force these new technologies can bring with them.
Tyler Perry’s decision to put the $800 million expansion of his Atlanta studio on hold, on the basis of one look at the new AI model which allows movie makers to create scenes from text instructions, might raise a suspicious brow in some quarters. But whether that’s the real reason or a cover story for his change in direction, we had better pay attention when Perry says he worries AI is going to cost the movie industry a lot of jobs. Those are Georgia jobs.
A year ago last week, lawmakers held a “Rivian Day” to show their support for the company which planned a $5 billion facility in Morgan county. Rivian CEO R.J. Scaringe reassured the Atlanta Journal-Constitution that the company’s recent losses would not affect its plans for the Georgia plant.
“There’s not another option. We’re not planning an alternative. This must work,” Scaringe said.
Thus it was a jolt, and not a pleasant one, when Rivian announced last week that it was putting the Georgia plant on hold. The vehicle that was to be manufactured here will be produced instead at the company’s already operational Illinois plant.
In an Atlanta Journal-Constitution op-ed, Rivian CEO RJ Scaringe described what the company was doing as a “shift in launch cadence,” but some fuming Republican lawmakers were using other descriptions.
Gov. Brian Kemp’s drive to make the state the nation’s “electric mobility capital” has produced several more plant announcements, including the mammoth vehicle-battery manufacturing complex Hyundai and LG are planning near Savannah. But the state now finds itself in the uncomfortable position of having offered $1.5 billion in incentives to land the Rivian plant, much of which has already been spent.
Kemp handily defeated former Sen. David Perdue after Perdue made an issue of the Rivian deal in the 2022 governor’s race. The problem he faces now, as he stakes his political future on his successes in drawing a new industry to the state, is more complicated. It will be very interesting to see how many Republicans begin to speak of Rivian in the past tense in the days ahead.
These are headline illustrations of the way a changing technological and economic landscape is affecting the state. But there are more granular examples as well.
Last week, the state Senate Rules Committee passed a House bill that would pause some of the tax breaks the state gives to data centers for two years, but not before hearing pushback from local officials who say revenues from the centers have become a vital part of their counties’ budgets. At the same time, legislators say the state isn’t getting a good return on the tax break it gives the centers, which employ relatively few people.
The pause would apply only to new data centers, and as some legislators pointed out, local governments could raise their own tax breaks to make up for what the state no longer gives. But industry observers are paying close attention to the bill because it comes at a time when the energy costs of data centers are drawing new attention.
Only months after getting final approval for the new Vogtle nuclear plant, Georgia Power filed an amended estimate with the Public Service Commission stating that electric demand by the end of this decade will be nearly 17 times what it predicted a couple of years ago. Data centers account for 80 percent of this new demand, according to the utility.
Those data centers and the enormous amount of electricity they use are essential for all the other stuff demanded in the new economy Georgia seeks to lead, so some tough choices lie ahead.
