South Dakota is positioning itself as a destination for technology investment, pointing to a large data center in rural Sully County as evidence that the state can compete for high-value digital infrastructure projects.
Why It Matters
The Big Watt data center, located north of Pierre in Sully County, is already generating meaningful economic benefits for a sparsely populated part of the state. It contributes roughly $900,000 annually in kilowatt-hour taxes to local schools — a significant injection for rural districts that often operate on tight budgets. If planned future phases come online, that figure could climb to more than $160 million per year, a transformational sum for a county with limited commercial tax base.
The facility’s payroll runs into the millions of dollars annually, and nearly all of its employees are drawn from the surrounding region — a detail that distinguishes it from development projects that import outside labor and leave little behind.
What Happened
State officials and local leaders in South Dakota have been making a public case for accelerating technology sector growth, using the Big Watt facility as a model. South Dakota’s tech employment has grown 17% in recent years, a rate that supporters say reflects the state’s advantages in cost, energy availability, and regulatory climate.
Sully County officials signaled strong interest in additional investment. One county official said the area would welcome more data center development with “open arms,” reflecting local enthusiasm for the economic activity such facilities bring.
The push comes as states across the country compete aggressively to attract data centers, which require stable power supplies, land, and favorable tax treatment. South Dakota has been working to emphasize its energy infrastructure as a selling point.
By the Numbers
- $900,000 — Current annual kilowatt-hour tax contribution from Big Watt to Sully County schools
- $160 million+ — Projected annual contribution once all planned facility phases are operational
- Several million dollars — Big Watt’s annual payroll, mostly employing regional workers
- 17% — Growth in South Dakota tech-sector employment in recent years
- 3,476 megawatts — Combined capacity of South Dakota’s 29 wind energy projects
Energy Infrastructure as a Foundation
South Dakota’s ability to attract data centers depends heavily on reliable, affordable power. The state currently hosts 29 wind projects with a combined capacity of 3,476 megawatts, giving it a substantial renewable energy base. The Oahe Electric Cooperative draws on a diversified mix of natural gas, coal, wind, and solar resources — an approach that provides redundancy and pricing stability that large power consumers like data centers require.
Data centers are among the most energy-intensive facilities in the modern economy. Their operators typically seek long-term power agreements and prioritize regions where grid reliability is high and energy costs are predictable. South Dakota’s energy mix and open land make it a plausible candidate, particularly as sites in more densely populated states face permitting delays and higher costs.
Zoom Out
The competition for data center investment has intensified nationally as artificial intelligence and cloud computing drive demand for server capacity. States including Virginia, Texas, and Iowa have attracted large clusters of facilities, and smaller states are increasingly trying to carve out a share of that growth. South Dakota’s pitch centers on its energy resources, rural land availability, and a regulatory environment perceived as business-friendly.
The economic model on display in Sully County — where a single facility could eventually generate over $160 million in annual school funding — is the kind of outcome that has made data center recruitment a priority for governors and economic development offices across the country. For rural states with declining agricultural revenues and shrinking populations, such projects represent one of the few scalable economic development opportunities available.
What’s Next
The trajectory of the Big Watt facility’s expansion will depend on power availability, capital investment decisions, and continued state and local support. County officials appear willing to offer a welcoming environment for additional phases or new entrants. State policymakers are likely to monitor the Sully County results closely as they consider broader incentives to attract more technology infrastructure investment across South Dakota.
For context on other South Dakota economic developments, the Wharf Gold Mine recently reported sharply higher revenue despite a slight drop in output — another example of the state’s resource-based economy generating significant returns.