Elon Musk, data centers and addictive spending

By Charles Houston

July 8, 2026 (AP) Elon Musk today opened his hand and revealed a small, glistening 8-sided object, an octahedron, a prototype high-density data storage device which he named a “MegaServe.” According to Musk, each MegaServe holds up to 640 petabytes of data, 50% more data than is held in all the servers in a hyperscale data center.

Musk

“Have you seen this?” Robert Rood asked his wife Byne, showing her that newspaper article.

She peered over his shoulder. “Sounds like a pretty big deal, though, depending on what a petabyte is.”

“I checked,” replied Robert, “A petabyte is a billion gigabytes. One of Musk’s things could replace an entire data center. A stall in our barn could replace all the data centers in the county.”

“That’s huge,” Byne observed, “but that could be a problem. Data centers pay tons in taxes. If this is real, they could face extinction.”

“Let me run some numbers.”

Fiscal Findings

It took a while for Robert to find relevant information and digest it. He and Byne resumed the conversation the next morning.

“The data centers pay almost $600 million in local taxes and Loudoun’s budget is around $4.2 billion. If all those data centers go dark because of Musk’s thing, the county would face a real problem. I only see two ways out: Raise taxes or reduce spending.”

“Neither of those would be easy,” commented Byne. She did some mental math: “If you tried to recapture the data center income, our taxes would essentially double.”

“Ouch! I looked at taxes first,” Robert said, “and compared Loudoun’s taxes to those of other counties. “Our tax rate is $0.875 per hundred dollars of value. That’s 30% more than in rural counties like Clarke and Frederick, but 30% less than heavily-developed counties like Fairfax. That seems okay, but with the increase in property values, everybody will have to pay more than last year.”

“The lesson is don’t get heavily developed,” Byne interjected, “which we don’t want to do for a lot of reasons.”

Robert concurred. “Exactly. Houses cost the county a lot more in services than they pay in taxes. Trying to grow our way out of the problem would just make things worse.”

“I get that,” Byne answered. “That leaves spending cuts, which supervisors will have trouble making.”

“I looked at Loudoun’s spending, Byne, and compared it to other counties. Our budget is $4.2 billion and we have 413,000 people. That means spending of just over $10,000 per resident.”

“How does that look in context?” Byne prodded.

“Fairfax seems to spend only $4,600 per capita. Arlington does $6,500 and Clarke, $3,000. Since I had to get those numbers from various places, I don’t think I can vouch 100% for those figures, but I think the comparisons are probably valid.”

That spending angered Byne. “So, the tax rate doesn’t seem out of line, but the spending looks crazy.”

Robert agreed, “That’s the problem. I think the County tries to do too many things. I know the Supervisors sweat bullets at tax time, but they’re trying to use a scalpel when they really need an ax.”

Belt-tightening

“What would you do?” Byne asked her husband.

“I talked to a friend in Paeonian Springs who developed a lot of office buildings. He said they would decide how much they wanted to invest on a project, and then tell their architects to design the building to meet that budget. If they left out that step, he said, the designers would be tempted to present a Taj Mahal.”

“I get it,” Byne said. “Determine how much money the county has, and don’t spend more than that, no matter how alluring some program is.”

“The guy had an analogy that made sense,” Robert offered. “He writes a column for a local paper. If he goes over the allotted number of words, he has to cut his text, no matter how severe the cuts.”

Tighter still

Byne agreed, “Yep. Maybe instead of trying to figure out specific cuts, just tell each department to cut its budget by the same percentage.”

“Remember,” Robert said, “The data center money will dry up if Musk is right, so those cuts have to be deep.”

“Then there’s no choice but to cut spending … a lot. Maybe 15% is the right amount.” Byne shook her head, picked up her mug of coffee and reached for the paper.

Uh-Oh

Then her face turned white. 

“What?” Robert asked.

“Dominion Power is trying to put in two huge power lines along more than four miles of Route 7 east towards the data centers, plus six substations. Six! Can you imagine what that would look like?”

Robert replied, “The Supervisors are trying to get a new overlay district to protect the aesthetics along Route 7 by prohibiting data centers there. That could never be done in time to affect these power lines. Besides, that data center overlay district might not address power.”

An idea

Byne digested that and said, “Data centers are fraught with all sorts of issues, more than just the buildings themselves. I’m not sure the County is taking a hard, overall look at them.’

“Agreed.”

Byne jotted some numbers on a piece of paper. After a moment she said, “See if this works. 

“Cut County spending 15%. Data centers pay about 15% of County taxes, so theoretically we should be able to do without their money after the spending cuts. So, we take half their annual taxes and pay down the County’s debt, which is around $2 billion. After a few years the debt would be gone. Then we start weaning ourselves from data center revenue, maybe by creating a reserve fund of some sort and cutting County spending by an equivalent amount.”

“I like that symmetry,” Robert praised.

Charles Houston developed six million square feet of office buildings. He lives in Paeonian Springs. A bit of Swiss blood courses through his veins.