Amid the global race to develop artificial intelligence infrastructure, an unlikely site in central Alberta has entered the conversation. A proposed hyperscale data centre complex and a gas-fired plant to meet the energy demands of the data centre in Olds, proposed by Synapse, promised billions in private investment and the potential to transform a quiet community into a hub for high-performance computing before being vetoed by regulatory authorities.
At first glance, the proposal appears like exactly the kind of project governments and politicians would support: large-scale digital infrastructure, economic diversification, and new opportunities for regional growth. However, in Olds, AB, the project has ignited a broader debate about energy consumption, environmental impacts, and how local communities confront industries scaled for the global internet. Recently, the Alberta Utilities Commission (AUC) withheld its approval, citing incomplete information, inconsistencies, and a general lack of public consultation from developers with residents.
The Physical Backbone of Artificial Intelligence
Artificial intelligence is often discussed in abstract terms such as algorithms, machine-learning models, and vast datasets moving through the cloud. In reality, AI depends on a vast network of physical infrastructure. Training and operating modern AI systems require data centres that run continuously and consume enormous amounts of resources such as electricity and water. These facilities are becoming some of the most energy-intensive pieces of infrastructure in the modern economy.
The Synapse Data Center Project is a 1.0 Gigawatt AI Data Center and supporting 1.4 Gigawatt (GW) natural gas‑fired electricity generation facility proposed in the Town of Olds, Alberta, at the NE corner of Highways 2A and 27. For developers and policymakers, the project represents a chance to position Alberta as a destination for digital infrastructure in the age of artificial intelligence, helping transition the traditionally oil-and-natural-gas-based economy towards the new era and the next generation of technology. If it had been completed and operational, it would have transformed Olds and its economic base, created thousands of direct and indirect jobs, and positioned Olds, a town of under 10,000 residents, at the forefront of Canada’s AI infrastructure, providing opportunities to develop a broader tech ecosystem. The Alberta Government also has seen AI as an economic opportunity with its AI Data Centre Strategy to attract investment highlighting the province’s natural resources and natural gas reserves. Regions that can offer reliable power, available land, and strong connectivity are becoming increasingly attractive for hyperscale data centres. Alberta’s energy resources and proximity to major cities such as Calgary make it a potentially competitive location for companies seeking to expand computing capacity. The project would have also ushered in a new era of regional development, free from the boom-and-bust cycles of the oil patch that had dictated the province’s economic direction for decades.
Community Concerns and Local Impact
Despite the potential benefits, the project has raised several concerns among residents in Olds and the surrounding areas. Some questioned the environmental impact of a large natural-gas-powered facility supporting the data-centre campus, while others expressed worries about the project’s effect on nearby farmland, wetlands, and residential neighbourhoods. Several residents raised issues about noise and pollution, which the AUC said the developers hadn’t addressed adequately. There are also broader questions about the scale of the project. For a town of roughly 10,000 people, hosting infrastructure designed to support global AI computing represents a significant shift in local development. These concerns also highlight a growing trend in recent AI development: the benefits of digital infrastructure may be national or global, but its impacts are felt locally.
The Bigger Conversation Around AI Infrastructure
The debate in Olds reflects a wider challenge facing governments and communities across North America. As AI becomes more advanced, the infrastructure required to support it is growing rapidly in both size and energy consumption. Data centres are increasingly becoming strategic, sometimes critical infrastructure, comparable to railways or power plants. Global data centre electricity consumption is projected to double by 2027, reaching 2.6% of global electricity usage due to AI, cloud computing, and digital transformation. At home, the Alberta Electrical System Operator (AESO) has also stated that data‑centre load growth can have “potentially unprecedented impacts,” citing more than 10,000 MW of requested load for data centres in Alberta alone, and noting that the most pronounced impacts will be on transmission systems.
Canada and Alberta’s ability to participate in the global AI economy may depend in part on whether they can build and host these facilities while balancing environmental standards, regulatory oversight, and community concerns.
Conclusion
The proposed data-centre complex in Olds offers a glimpse into the physical foundations of the AI economy. Artificial intelligence may exist in software and algorithms, but the systems that power it rely on land, energy, and the communities willing to host supporting infrastructures.
As Canada continues to expand its role in the global AI ecosystem, projects like this will test how the country balances digital ambition and development with environmental responsibility and community feedback. The future of artificial intelligence may be digital, but the decisions about where to build the infrastructure behind it will be rooted locally.
