OpenAI in Georgia: How $20B data center plan secretly took root in Effingham

And then there’s another matter.

“How is it,” Melton says, “that we didn’t hear a peep about this until it was already done?”

OpenAI’s data center plan, announced July 22, blindsided county residents. Many have spent the days since speculating about the whys and hows. The answers involve a web of actions by governments and related authorities as well as Georgia Power, the utility supporting the statewide data center boom.

A public records review, an hourlong interview with Effingham County Manager Tim Callanan and Effingham County Industrial Development Authority CEO Brandt Herndon, and information provided by OpenAI and Georgia Power shed more light on the deal.

Here’s what we know so far.

Credit: Adam Van Brimmer

Credit: Adam Van Brimmer

Why was the deal put together secretly?

OpenAI insisted that Effingham officials sign nondisclosure agreements, or NDAs, as the company explored several locations for its data center campus. Barring bidders from openly discussing prospective projects protects OpenAI’s negotiating power.

Herndon estimates NDAs are utilized in 75% of all projects he’s involved in. Oftentimes, limiting public release of information is done to avoid spikes in property acquisition costs or changes to a potential user’s stock price. Other times, a company planning to relocate its operations doesn’t want news of a potential new facility disrupting its business elsewhere.

The drawback to the practice is in how it limits public knowledge before an announcement — particularly in a situation like OpenAI’s project in Effingham, which requires no zoning revisions or other entitlement changes entailing governmental review.

It also means residents are not able to weigh in before a decision is made on a major development. Opinion polls in Georgia and elsewhere in the U.S. show most residents don’t want a data center built near them.

How is it that the data center fits the zoning?

Effingham’s 1,400-acre site is a “unicorn” for data center development. It sits within an existing industrial park, is designed with generous setbacks from neighbors and is zoned for both heavy and light industrial uses.

A push to modernize the county’s zoning ordinance resulted in data centers already being a permitted use a year before OpenAI first made contact.

Effingham took on the update in 2024 as frustrations built over the simplicity of the zoning laws. Gone were the days that the county was mostly rural farmland with a smattering of Savannah-feeding bedroom communities near I-95.

In the 2000s, the Georgia Ports Authority began its rapid growth into one of the nation’s busiest cargo terminals. The Ports Authority’s gates are 10 miles from the county line along the same road, Ga. 21, that is Effingham’s main thoroughfare. Ga. 21 quickly became a magnet for small manufacturers and warehouse parks.

Effingham’s population doubled between 2000 and 2025.

A key element in addressing the antiquated zoning laws was the creation of a permitted use table. This tool established what could be built where “by right” — meaning without significant review. The initial version was added to the zoning law in late 2024; the tables of uses ran for 10 pages.

Data centers were on the list but drew little attention. The only time the permitted use was discussed publicly was during a February 2025 commissioners retreat — a public meeting, albeit one held in Atlanta, not within the county. Even then, the data center talk wasn’t a debate but part of a Georgia Power presentation highlighting plans to increase generating capacity statewide to serve data centers.

There was no mention of anything specific to Effingham beyond that Georgia Power would be increasing generation at Plant McIntosh, near Rincon along the Savannah River, by adding a natural gas-powered turbine.

Residents say county officials could have discussed data centers in public meetings in recent months. The NDAs prohibited them from talking about OpenAI’s project, but not data centers in general, at a time when there were tense discussions on the topic in other coastal Georgia communities.

Effingham’s Callanan disagrees. Government leaders felt the county’s industrial zoning ordinances “were pretty tough” and “stronger than everyone else’s,” he said, making public discussion unnecessary.

“We felt confident that if something were to come in here, (the community) would be adequately protected,” he said.

Several opponents say they plan to challenge the county — verbally and perhaps even legally — over the approach. They are poring over public records and previous versions of the zoning ordinance, looking for process issues to exploit.

Credit: Adam Van Brimmer

Credit: Adam Van Brimmer

Why do county officials think the data center is a good fit?

Effingham officials argue the development will bring lower taxes, less traffic and economic diversification. They hail the OpenAI deal as a means to eliminate county property taxes on homeowners and to lower school district-related property taxes to the minimum allowed millage rate of 10 mills.

According to the development agreement, OpenAI’s data center campus will be exempted from the local tax digest. The company will instead contribute via a payment-in-lieu-of-taxes program, or a PILOT. A widely used tool in economic development, a PILOT allows governments to lock in a tax collection amount for a specified time period.

In OpenAI’s case, the company will make an annual payment equal to 50% of the property’s appraised value at the 2026 tax rate for 15 years. With a commitment to invest $20 billion in the project, the data center campus will be the county’s most valuable real estate and OpenAI the largest taxpayer. Once the PILOT expires in 15 years, the property returns to the tax digest and the tenant pays taxes at the then-rate.

Another way the community would benefit from the data center, according to Effingham officials, is by taking up property that might otherwise go to “more intense users,” such as noisy manufacturers or truck traffic-heavy warehousers.

OpenAI’s campus is to occupy 1,400 acres in the 2,600-acre Savannah Gateway Industrial Hub. The park’s other tenants are logistics companies and distribution centers, and Callanan frequently fields complaints about semitruck traffic and wear-and-tear to roads. By contrast, data centers house employees who come via automobiles and pickup trucks.

Callanan has firsthand experience with data centers. He previously worked for the Berkeley County, South Carolina government. Google opened two of its first data centers in an industrial park there two decades ago. Berkeley County neighbors Charleston in much the same way Effingham does Savannah.

“You wouldn’t even know they were there except Google makes a point of being out in the community,” he said. “You’d rather have a data center with 400 to 1,000 employees than more warehouses that don’t employ as many people and bring a lot more disruptive traffic. We’re pro-warehouse, but it’s wise to have more diversity in users.”

Credit: Adam Van Brimmer

Credit: Adam Van Brimmer

The data center will also bring more — and higher-paying — jobs than warehouses do. The development agreement requires OpenAI to employ a minimum of 400 workers at an average wage of $80,000, although there is no mandate for paid benefits, such as medical insurance or retirement plans. The hires can be third-party contract employees even.

A senior OpenAI official said plans call for 1,000 or more staffers at the data center campus and many employees will earn in excess of $100,000.

What about power and water?

Power accessibility powered the deal, and OpenAI says the data center’s design will curtail water use.

Georgia Power’s economic development arm made the introduction between OpenAI and the county’s industrial development authority last fall. The utility was in the midst of upgrading its electricity generation and distribution network on the coast, with Plant McIntosh as the centerpiece.

The power station will produce 2.1 gigawatts of electricity once its new turbine comes online. Two other facilities in the region — Plant Hatch in Vidalia and Plant Vogtle in Waynesboro — combine to generate about 6.5 gigawatts.

OpenAI requires 3.2 gigawatts, or almost as much as three Vogtle nuclear reactors. But the regional capacity and proximity to high voltage distribution lines running through Effingham from Plant McIntosh positions the Effingham site well for a data center campus.

As part of the development agreement, OpenAI has agreed to give 1 gigawatt back to the electricity grid at peak times to reduce demand and curb rate spikes that would affect other Georgia Power customers. The company can do that because the Effingham data center servers will be used largely for AI model training and not cloud computing.

AI model training can be reduced or even halted whereas cloud computing functions, such as connecting internet users to websites, processing e-commerce payments or retrieving cute photos from iCloud, require constant, consistent power.

As for water, OpenAI will cool its data center equipment using a closed-loop system that requires millions of gallons, but only at setup. The system is designed to use the same water for years with appropriate filtration, treatment and monitoring.

A similar-sized OpenAI facility in Abilene, Texas used 8 million gallons to fill its closed-loop system before launch. For comparison, the Hyundai electric vehicle Metaplant in nearby Bryan County is expected to consume 8 million gallons every two days once it reaches full production later this decade.

According to a recent state filing, OpenAI’s data center is projected to use 30,000 gallons daily as part of its normal operations, or about as much water as consumed by 100 homes.

“It’s more than a warehouse, but then there are a lot more employees flushing toilets and turning faucets in a data center than in a warehouse,” Herndon said.

Credit: Adam Van Brimmer

Credit: Adam Van Brimmer

What’s next in the process?

Project review and public relations. Effingham County submitted the second of two parts of its state-mandated Development of Regional Impact on July 29. The DRI details infrastructure needs for large-scale projects and reviews last approximately 45 days. The Georgia Department of Community Affairs could require more information on the project before allowing it to move forward.

It remains to be seen if residents opposed to the data center can find a procedural challenge to stall or even derail the development.

In the meantime, with support from local officials, OpenAI is finalizing its site plan. The company intends to begin construction in early 2027.

OpenAI officials are also engaging with the community, scheduling more information meetings like the July 23 open house and canvassing door to door in some cases.

Effingham’s Callanan suspects much of the negativity directed at the project is because of “sins of the past” by other data center developers who built noisy, water-guzzling server farms too close to residential neighborhoods.

“From my first conversation with them, they’ve said they want to do this differently, and then added ‘and we’re not just saying that,’” Callanan said. “I can say from experience that they’ve followed through on that, at least so far.”