Apple planning to build $1 billion server farm?

Apple, who is somewhat notoriously elusive, is supposedly planning to build a new server farm in the US that may cost as much as $1 billion. It would effectively dwarf the former WorldCom/MCI data center it purchased in 2006. According to the Associated Press, an official, but anonymous leaked memo, suggests that the state of North Carolina is attempting to coax Apple into constructing the server farm in their territory.

The bait is apparently a $46 million tax break. The break applies to companies with a significant portion of their US property and payroll taxes located in NC – something which no company presently qualifies for, the memo notes. If Apple were to build its conceptual server farm in the state, it would have to spend the $1 billion within 9 years to be eligible for the discount. North Carolina offered Google some $100 million in tax incentives over 30 years if the search giant agreed to build a $600 million data center in the state back in 2007, a deal which the company accepted.

Skynet, here we come. I kid – but really, what could Apple possibly need a billion dollar server farm for? Obvious suggestions include more muscle for their continuously growing list of services such as iTunes, MobileMe and the App Store; though, isn’t $1 billion worth of servers overkill?