The race to build the massive data centers powering America’s AI boom has hit a wall, and not everyone thinks bigger is better. On a recent broadcast of The Brian Kilmeade Show (Fox News Radio, July 31, 2026), data center operator John Johnson, CEO of Patmos Hosting, made a contrarian case that smaller facilities are more practical, more sustainable, and more economically viable than the gigawatt-scale mega-campuses cropping up across the country.
Johnson told Kilmeade that the “real sweet spot is that Goldilocks zone for a data center.” Patmos, he noted, “built the first actually assessed clean energy data center in history, but that happens in like the 10 to 50 megawatt zone. That’s also where the economics make the most sense.”
The argument is straightforward. Gigawatt-scale facilities create disproportionate strain on local resources. Kilmeade echoed the concern, noting that “multi-megawatt and even approaching gigawatt data centers create a lot of friction in communities. They create a war for resources and power.” He added that “it remains to be seen how profitable a gigawatt campus can be.”
What makes this notable is that Johnson is not anti-development. He is an operator actively building facilities. Yet he surprised the hosts by saying he is “not entirely opposed to data center moratoriums of 100 megawatts or more.” His reasoning: keeping facilities smaller gives communities room to assess benefits and negotiate terms before approving massive projects that overwhelm local infrastructure.
The jobs question looms large. As Kilmeade and co-host Taylor Riggs discussed, data centers produce a burst of construction employment but very few long-term operational jobs. “Once the data center is built, it runs itself,” Riggs observed. For communities weighing whether to offer tax incentives, that math matters.
Johnson’s prescription for state and local leaders is blunt: skip the special tax breaks. “Data centers shouldn’t get a tax break any more than the farmer, any more than you or I should get a tax break,” he said. A pro-business, low-tax environment will attract investment on its own merits, with facilities paying property taxes and utility costs that offset the burden on local residents.
The location strategy is equally pointed. Johnson, a California native, said he “very deliberately founded a tech company in Missouri because there are certain states like California and New York where we just don’t want to be.” He cited New York’s power costs running 50% above the national average and a hostile regulatory climate.
For St. Louis area business owners and economic development officials, the takeaway is timely. As states compete for data center investment, the communities that win may not be the ones offering the largest subsidies. They may be the ones that create a level playing field, demand sustainable energy solutions, and insist on facilities scaled to fit the local grid rather than overwhelm it. The gigawatt gold rush is on, but the smarter play might just be thinking smaller.
Nick LaRosa is a Founding Partner at CMIT Solutions St. Louis, a Managed IT Service Provider. Contact Mike at 314.628.0811 or visit www.cmitstl.com.