WEBVTT - Jasmine Sun on What the AI Industry Got Wrong About the Public Backlash 0:00:03.840 --> 0:00:05.280 Hello, Odd Loads listeners. 0:00:05.360 --> 0:00:07.560 I'm Joe Wisenthal and I'm Tracy Alloway. 0:00:07.720 --> 0:00:10.280 We're the hosts of the Odd Lads podcast, and we've 0:00:10.280 --> 0:00:11.560 got something exciting for you. 0:00:11.760 --> 0:00:12.160 That's right. 0:00:12.200 --> 0:00:14.800 So one of the best parts of hosting our podcast 0:00:14.920 --> 0:00:17.840 is we get to actually meet and interact with our listeners. 0:00:17.960 --> 0:00:21.680 And we know we have some listeners over in Los Angeles. 0:00:21.160 --> 0:00:21.560 That's right. 0:00:21.600 --> 0:00:23.840 So if you're in LA, we are going to be 0:00:23.920 --> 0:00:27.760 recording a live show, some live recordings at the Vermont 0:00:27.800 --> 0:00:30.160 Theater in Hollywood on September seventeenth. 0:00:30.240 --> 0:00:33.040 We have some really exciting guests lined up, have some 0:00:33.120 --> 0:00:36.479 really great conversations planned, so go ahead and get your tickets. 0:00:36.479 --> 0:00:39.040 You can find those over at bloomberg dot com forward 0:00:39.080 --> 0:00:41.760 slash odd Lots, or click the link below in the 0:00:41.800 --> 0:00:43.800 show notes and come and say hi when you're there. 0:00:49.440 --> 0:01:04.480 Bloomberg Audio Studios, Podcasts, Radio News. 0:01:05.360 --> 0:01:08.240 Hello and welcome to another episode of the ad Thoughts Podcast. 0:01:08.319 --> 0:01:09.679 I'm Tracy Alloway. 0:01:09.400 --> 0:01:10.600 And I'm Joe Wisenthal. 0:01:10.959 --> 0:01:13.920 Joe, there are a lot of interesting angles when it 0:01:13.920 --> 0:01:14.560 comes to AI. 0:01:14.760 --> 0:01:15.520 Yeah you think so. 0:01:15.840 --> 0:01:18.360 Yeah, Just to put it mildly, but one of the 0:01:18.400 --> 0:01:20.880 most interesting things I think is that we think about 0:01:20.880 --> 0:01:24.440 it as this like ephemeral digital technology. Yeah, you know, 0:01:24.520 --> 0:01:27.600 in some sense, it's like the sass of yours. 0:01:27.760 --> 0:01:28.200 That's right. 0:01:28.240 --> 0:01:31.280 There's a window that you open on your browser and 0:01:31.400 --> 0:01:34.080 you type stuff into the Internet, and the Internet spit 0:01:34.160 --> 0:01:37.720 stuff out at you, hopefully not literally. But there is 0:01:37.800 --> 0:01:42.400 also this very physical component to AI because it involves 0:01:42.520 --> 0:01:45.880 huge amounts of power, huge amounts of things like memory chips, 0:01:45.880 --> 0:01:49.040 and of course put those two things together, huge numbers 0:01:49.120 --> 0:01:50.000 of data centers. 0:01:50.280 --> 0:01:53.400 No, this has been like what is sort of fundamentally 0:01:53.520 --> 0:01:57.200 different about this, at least from a markets perspective, Yeah, right, 0:01:57.640 --> 0:02:01.080 which is that when we had the boom of the 0:02:01.280 --> 0:02:05.400 prior decade et cetera, Like, by and large, the successful 0:02:05.480 --> 0:02:09.480 companies they didn't need to go into debt to build 0:02:10.200 --> 0:02:13.440 or whatever. They're like building data centers, but like they 0:02:13.440 --> 0:02:17.560 were not so computationally, they were not so massive that 0:02:17.720 --> 0:02:20.040 it was like they had to borrow money. They funded 0:02:20.040 --> 0:02:23.079 them from free cash flow quite easily. The company is 0:02:23.080 --> 0:02:25.240 building on top of that. I just plug into there. 0:02:25.360 --> 0:02:28.400 There was always availability on an Amazon cloud. There's not 0:02:28.440 --> 0:02:33.119 like some compute scarcity. You're not like using Slack one 0:02:33.200 --> 0:02:35.960 day and then it's like, oh, your four hour window 0:02:36.240 --> 0:02:38.880 is up. It will reset in a few hours. Like, yes, 0:02:39.280 --> 0:02:43.560 we're their physical constraints to the air buildout, which basically 0:02:43.560 --> 0:02:45.519 in the history of the Internet is totally novel. 0:02:45.360 --> 0:02:48.240 Right, And I think that's really emerging as in many 0:02:48.280 --> 0:02:52.320 ways the prime constraint because it feels like investors still 0:02:52.440 --> 0:02:55.280 are very happy to more or less fling money at 0:02:55.320 --> 0:02:58.919 the hyperscalers, at data center projects, at all of those things. 0:02:59.000 --> 0:03:00.919 There's no capital short right, There's. 0:03:00.680 --> 0:03:03.720 No capital shortage. What there is is a shortage of 0:03:03.840 --> 0:03:09.840 again power, land, regulatory and political approvals for actually building 0:03:09.880 --> 0:03:10.960 these things totally. 0:03:11.080 --> 0:03:13.560 And you know, this is like such a big country 0:03:14.320 --> 0:03:17.000 that it's like I always think, like, yeah, data centers 0:03:17.040 --> 0:03:19.120 are great, just like put them out in the middle 0:03:19.120 --> 0:03:22.519 of nowhere. And then I'm like, oh, that's literally nimbiism, right, 0:03:22.600 --> 0:03:26.360 It's like that's literally what everybody has that thought, Oh, 0:03:26.440 --> 0:03:28.200 there must just be somewhere out in the middle of 0:03:28.280 --> 0:03:29.160 nowhere to put it. 0:03:29.200 --> 0:03:32.160 But a it's going to be in theory near somewhere. 0:03:32.600 --> 0:03:35.080 And if we could just solve all of our issues 0:03:35.120 --> 0:03:37.040 by putting everything in the middle of nowhere, there wouldn't 0:03:37.040 --> 0:03:38.960 be an issue. There are reasons why they're located where 0:03:39.000 --> 0:03:39.960 they are, they. 0:03:39.880 --> 0:03:40.240 Have to be. 0:03:40.680 --> 0:03:45.600 Ideally there's some sort of power infrastructure, some water infrastructure. 0:03:45.720 --> 0:03:47.280 These are things that also attract people. 0:03:47.360 --> 0:03:49.680 It's not hard to imagine that the middle of nowhere 0:03:49.760 --> 0:03:51.920 might not have a lot of energy and. 0:03:51.920 --> 0:03:54.800 Water infrastructure exactly, Otherwise there'd be a bunch of people 0:03:54.840 --> 0:03:55.360 there right. 0:03:55.640 --> 0:03:59.160 The other interesting thing about data centers and AI is 0:03:59.160 --> 0:04:03.200 that it's become one of the very few bipartisan issues, 0:04:03.320 --> 0:04:05.440 I think in America. And you have people both on 0:04:05.480 --> 0:04:07.760 the left and the right now who are saying that 0:04:07.760 --> 0:04:09.600 they don't like data centers, they don't want the data 0:04:09.600 --> 0:04:12.640 centers in their backyard. We interviewed Kathy Hockel, the New 0:04:12.680 --> 0:04:16.760 York governor, about her moratorium on building new data centers. 0:04:16.839 --> 0:04:19.080 So there seems to be a lot of, let's say, 0:04:19.720 --> 0:04:22.400 feelings when it comes to data centers. 0:04:22.040 --> 0:04:24.239 And you know, it did not get as much attention 0:04:24.640 --> 0:04:28.320 as Kathy Hokeel, I imagine because she's a Democrat. But 0:04:28.560 --> 0:04:31.240 Texas Governor Greg Abbott just in the last few days 0:04:31.600 --> 0:04:35.240 also announcing curbs on the state. People were a little 0:04:35.320 --> 0:04:38.600 quieter about that one. That has some reasons why maybe 0:04:38.600 --> 0:04:41.520 it didn't map to Peopil's view of Texas as a 0:04:41.720 --> 0:04:44.000 state that's just open for business in a way that 0:04:44.080 --> 0:04:47.120 big blue states aren't. But as you say, it's bipartisan. 0:04:47.200 --> 0:04:49.440 And then I'd say, like, one other thing that I 0:04:49.480 --> 0:04:51.640 think is interesting about it is like, so we know 0:04:51.680 --> 0:04:54.640 the data center controversy, but AI in general is sort 0:04:54.640 --> 0:04:59.560 of like riven with anxiety on multiple levels. Obviously, for 0:04:59.680 --> 0:05:02.160 years people have been talking about, you know, mass job laws. 0:05:02.680 --> 0:05:03.680 Lately we've been. 0:05:03.600 --> 0:05:05.760 Talking on the podcast about you know what people called 0:05:05.800 --> 0:05:08.440 like X risk and stuff like that, like truly rogue AI, 0:05:09.000 --> 0:05:12.760 And in my mind, I feel like the people inside 0:05:12.760 --> 0:05:16.240 the labs are very anxious about those other two these 0:05:16.279 --> 0:05:19.960 sort of like effects on society and again literal like 0:05:20.360 --> 0:05:23.200 safety issues, what are they going to be responsible if 0:05:23.200 --> 0:05:26.440 everyone loses a job, et cetera. But on the ground, 0:05:26.720 --> 0:05:29.640 it does not feel like those things are the fears, 0:05:29.839 --> 0:05:32.839 even though I'm you know, anxious, like that are really 0:05:32.839 --> 0:05:34.919 like driving the policy, the backlash politics. 0:05:34.960 --> 0:05:36.520 If I could sum it all up, it feels very 0:05:36.600 --> 0:05:41.000 much like data centers are the physical manifestation of a 0:05:41.040 --> 0:05:43.440 new technology that is in some ways very hard to 0:05:43.520 --> 0:05:46.400 sell to America. Right, Like, here's this thing that is 0:05:46.440 --> 0:05:48.159 not only going to take your job, but like, maybe 0:05:48.200 --> 0:05:48.960 it don't kill you too. 0:05:49.000 --> 0:05:52.080 Well, I was gonna say, you don't like data centers 0:05:52.120 --> 0:05:55.080 because you're worried about the noise complaints. I don't like 0:05:55.200 --> 0:05:56.960 data centers because I'm worried they're gonna kill me. 0:05:57.040 --> 0:05:59.720 We are not the same. We are not the same, all. 0:05:59.720 --> 0:06:01.560 Right, Well, that is the perfect way to put it. 0:06:01.600 --> 0:06:04.040 And we have the perfect guest to try to talk 0:06:04.080 --> 0:06:07.039 through all of these various things. We're going to be 0:06:07.040 --> 0:06:10.600 speaking once again with Jasmine's son. She is an independent 0:06:10.640 --> 0:06:14.400 writer covering AI and Silicon Valley culture, and she just 0:06:14.480 --> 0:06:18.359 published an amazing piece of reporting called No Data Centers 0:06:18.400 --> 0:06:21.760 in My Backyard on her sub stack. So, Jasmine, thank 0:06:21.800 --> 0:06:23.680 you so much for coming back on odd Lots. 0:06:23.920 --> 0:06:25.400 I'm so excited to be here again. 0:06:25.560 --> 0:06:28.200 So congrats on the piece. We were saying earlier. It 0:06:28.320 --> 0:06:30.719 kind of sounds fun just to hop in a car 0:06:30.960 --> 0:06:33.440 with a few friends and research assistants and go on 0:06:33.480 --> 0:06:36.719 a road trip through Middle America looking at data center sites. 0:06:37.080 --> 0:06:39.280 Yeah, I mean it was fun. I was trying to 0:06:39.760 --> 0:06:41.919 decide where in the country I wanted to go to 0:06:42.040 --> 0:06:44.400 do this data center road trip. I remember this was 0:06:44.400 --> 0:06:47.320 the last question I asked Claude Fable before it was 0:06:47.560 --> 0:06:50.880 taken away from me for several days. And so it 0:06:50.960 --> 0:06:53.200 was either going to be Michigan, Wisconsin, which is where 0:06:53.200 --> 0:06:54.960 I ended up going, or it was going to be 0:06:55.120 --> 0:06:58.359 Texas or maybe the Southeast like Memphis, etc. And to 0:06:58.400 --> 0:07:01.160 be entirely honest, part of the reason I ended up 0:07:01.160 --> 0:07:04.080 doing Michigan, Wisconsin the Upper Midwest is because it sounded 0:07:04.200 --> 0:07:06.320 a lot more pleasant to spend July by the Great 0:07:06.360 --> 0:07:09.240 Lakes than it did driving across the Texas Desert. I'm sorry, 0:07:09.279 --> 0:07:10.280 Greg Abbott. 0:07:10.320 --> 0:07:13.480 No, I think that's a totally good reason. The Upper 0:07:13.520 --> 0:07:17.280 Midwest is absolutely lovely this time of year. It's beautiful, 0:07:17.280 --> 0:07:20.440 and there's lakes and all of that stuff. When we 0:07:20.560 --> 0:07:25.400 think about data center activity, I do tend to think more, 0:07:25.520 --> 0:07:28.280 I guess still in my head northern Virginia, so there 0:07:28.280 --> 0:07:31.080 can't be that much space left out there. I do 0:07:31.200 --> 0:07:34.760 think a fair amount about Texas, in part because of 0:07:34.880 --> 0:07:37.800 sort of like the Elon verse, et cetera, and how 0:07:37.880 --> 0:07:41.440 much tech activity is happening there. I probably do think 0:07:41.440 --> 0:07:44.240 a little bit about the Southeast. How active though is 0:07:44.320 --> 0:07:48.360 that area? Like how much interest is there in Wisconsin 0:07:48.440 --> 0:07:50.880 Michigan in general about data centers and what is it 0:07:51.040 --> 0:07:54.200 about those locations that Okay, it's like these could be 0:07:54.240 --> 0:07:57.320 attractive geographies for them given what they need. 0:07:57.520 --> 0:07:59.960 Yeah, I mean, so Michigan and Wisconsin sort of rank 0:08:00.160 --> 0:08:02.440 near the middle to the upper middle of the pack 0:08:02.520 --> 0:08:04.400 when you look at how many data centers are being 0:08:04.480 --> 0:08:07.080 built across the fifty states. I think each of them 0:08:07.160 --> 0:08:11.360 have maybe around like fifty maybe two one hundred projects 0:08:11.400 --> 0:08:13.200 or proposed projects in the states, So it's not an 0:08:13.200 --> 0:08:16.400 incredible amount compared to again, Virginia and Texas, where you 0:08:16.400 --> 0:08:19.720 have six hundred eight hundred active data centers or data 0:08:19.720 --> 0:08:22.560 centers being built. The thing that drew me to Michigan 0:08:22.600 --> 0:08:26.360 and Wisconsin one is that I had heard that proposals 0:08:26.400 --> 0:08:29.400 for new data centers were ramping up. And that's because 0:08:29.640 --> 0:08:33.240 one Wisconsin, for example, has the sales tax exemption on 0:08:33.400 --> 0:08:35.880 the chips and on some construction costs, so that made 0:08:35.880 --> 0:08:39.439 it a somewhat attractive state. Reretchen Whitmer, governor of Michigan, 0:08:39.720 --> 0:08:42.920 who has always taken a pretty pro growth standpoint for Michigan, 0:08:42.960 --> 0:08:45.320 how do we bring business back, was also sort of 0:08:45.360 --> 0:08:47.920 actively courting data centers, and so she did a very 0:08:47.920 --> 0:08:51.440 controversial photo op with Sam Altman at the Stargate site 0:08:51.440 --> 0:08:53.600 in Saline, which has become one of the big data 0:08:53.600 --> 0:08:56.559 center fights in Michigan. And so they're both things that 0:08:56.600 --> 0:09:00.320 these two states did in order to explicitly attract data 0:09:00.360 --> 0:09:03.400 center investment. I think there also was enough, like you said, 0:09:03.440 --> 0:09:06.920 grid access and water access to make these reasonable places 0:09:06.960 --> 0:09:09.160 to build data centers, like an hour out of the cities, 0:09:09.200 --> 0:09:12.000 an hour out of Detroit, an hour out of Milwaukee, 0:09:12.040 --> 0:09:14.400 for example. And then the other thing that was really 0:09:14.440 --> 0:09:17.400 interesting to me personally as a reporter was I wanted 0:09:17.440 --> 0:09:21.160 to know how the data center story intersected with a 0:09:21.400 --> 0:09:24.200 the history of de industrialization. I think this is part 0:09:24.200 --> 0:09:26.560 of why a lot of the politics in those states 0:09:26.640 --> 0:09:29.520 is about bringing business and bringing industry back, bringing the 0:09:29.520 --> 0:09:32.760 skilled trades back. Even in some of these very specific 0:09:32.840 --> 0:09:35.440 sites where their data center is being proposed, they were like, 0:09:35.520 --> 0:09:37.760 you know, the site of a former GM plant in 0:09:37.840 --> 0:09:40.640 Janesville that sort of devastated the community when thousands of 0:09:40.720 --> 0:09:43.760 jobs disappeared during the financial crisis. Do we now want 0:09:43.800 --> 0:09:45.800 to build a data center there and will that be 0:09:45.880 --> 0:09:48.080 the way to revive the community is a question that 0:09:48.360 --> 0:09:51.600 people are asking or you know in Mount Pleasant with 0:09:51.640 --> 0:09:54.319 the Fox consite, there was a huge fiasco where Trump 0:09:54.360 --> 0:09:57.040 said they were bringing all these manufacturing jobs back they 0:09:57.080 --> 0:10:00.280 weren't built. So the d industrialization history was really interesting saying. 0:10:00.679 --> 0:10:04.040 And then the second thing was the primaries, which I 0:10:04.040 --> 0:10:06.200 think have now both come to pass, but I thought 0:10:06.200 --> 0:10:07.760 it was going to be a really interesting place to 0:10:07.800 --> 0:10:10.760 look at as you mentioned that bipartisan politics of data centers, 0:10:10.800 --> 0:10:13.480 the fact that in both states you were seeing roughly 0:10:13.520 --> 0:10:16.680 seventy thirty opposition to data centers from both Democrats and 0:10:16.720 --> 0:10:20.400 Republicans in a very very polarized battleground states where Dems 0:10:20.400 --> 0:10:23.559 and Republicans rarely agree on anything. And then AI was 0:10:23.600 --> 0:10:26.840 also showing up in the Wisconsin governor's race where Francesca 0:10:26.880 --> 0:10:29.480 Hong was running on a data center moratorium, or in 0:10:29.480 --> 0:10:32.199 the Michigan Senate race where Abdula Sied was talking a 0:10:32.200 --> 0:10:34.280 lot about data centers as sort of one of the 0:10:34.320 --> 0:10:36.280 examples of money infecting politics. 0:10:36.559 --> 0:10:40.599 Yeah, so we're recording this on August twelfth, and Francesca 0:10:40.640 --> 0:10:44.640 Hong just lost the Democratic primary in Wisconsin to David Crowley, 0:10:45.040 --> 0:10:46.880 which is kind of interesting because one of the people 0:10:46.960 --> 0:10:50.040 I remember you spoke to on the ground was someone 0:10:50.040 --> 0:10:52.600 who was saying she explicitly was going to vote for 0:10:52.720 --> 0:10:56.720 Hong because of her policies around data centers. And I 0:10:56.760 --> 0:11:00.880 know one primary does not a trend make, but do 0:11:00.920 --> 0:11:03.080 you get the sense that data centers can be like 0:11:03.200 --> 0:11:05.319 a winning political platform. 0:11:05.800 --> 0:11:07.320 Yeah, this is one of the things I was trying 0:11:07.320 --> 0:11:09.400 to get a handle on because I was wondering, like, 0:11:09.480 --> 0:11:11.800 will the local or state politics be a bit of 0:11:11.800 --> 0:11:14.640 a microcosm or about weather for the national politics of AI. 0:11:15.320 --> 0:11:18.760 And my sort of summary here is that I think 0:11:18.800 --> 0:11:22.480 that if you live in a community where a data 0:11:22.520 --> 0:11:25.480 center is being built or proposed, you don't like it, 0:11:25.520 --> 0:11:27.679 and it's very high sealience. It's very important to you, 0:11:27.760 --> 0:11:30.240 like the fact that there is a gigantic construction project 0:11:30.240 --> 0:11:32.800 that will bring in traffic and noise and whatever for 0:11:32.960 --> 0:11:36.520 two to six years nearby that really really bothers people 0:11:36.520 --> 0:11:39.240 in the community. When I went to Port Washington, for example, 0:11:39.280 --> 0:11:41.559 which is another city in Wisconsin, and just talk to 0:11:41.640 --> 0:11:43.880 random people at fish Giving, which was this like funny 0:11:43.880 --> 0:11:46.120 fish festival that we went to in order to talk 0:11:46.120 --> 0:11:46.920 to them, like you've. 0:11:46.800 --> 0:11:49.679 Never heard about it before, I kind of want to 0:11:49.720 --> 0:11:50.760 go even though I like. 0:11:51.640 --> 0:11:53.760 No, it was a real event. It was amazing. There's 0:11:53.760 --> 0:11:55.000 an Elvis impersonator. 0:11:55.320 --> 0:11:56.840 Obviously, it's fish giving. 0:11:56.960 --> 0:11:59.719 America is so good that there was life liberty in 0:11:59.760 --> 0:12:02.600 the suit of fish. It was amazing. It was on 0:12:02.679 --> 0:12:04.920 Lake Michigan. But every single person we talked to you 0:12:04.960 --> 0:12:07.120 there had an opinion on the data center. Because when 0:12:07.160 --> 0:12:10.199 there is a gigantic I think, seven hundred acre facility 0:12:10.280 --> 0:12:13.040 being built near you, you will care about it, and 0:12:13.080 --> 0:12:15.800 so salience is super high if you live nearby. But 0:12:15.880 --> 0:12:17.880 then if you don't live near a data center, like 0:12:17.920 --> 0:12:20.280 if you're in a zip code where there's nothing being proposed, 0:12:20.520 --> 0:12:23.400 the polls still show that seventy thirty you're roughly against 0:12:23.480 --> 0:12:26.280 data centers. I talked to Charles Franklin and Marquette who 0:12:26.360 --> 0:12:29.600 had done this explicit pulling, but the salience is much lower. 0:12:29.640 --> 0:12:31.800 Data centers does not rank in like the top five 0:12:31.880 --> 0:12:35.040 issues electorally unless you were literally living in one of 0:12:35.080 --> 0:12:47.520 those communities. 0:12:51.920 --> 0:12:55.440 These are always very sensitive questions to ask a journalist, 0:12:55.520 --> 0:12:58.360 and we're supposed to just be like open minded, etc. 0:12:59.440 --> 0:13:05.440 Of thep you talk to who were concerned about data centers, 0:13:05.480 --> 0:13:10.080 in your view, like, there are some really wacky reasons 0:13:10.080 --> 0:13:10.640 to oppose. 0:13:11.120 --> 0:13:12.200 There's some like I would. 0:13:12.559 --> 0:13:15.160 I'm very sensitive to noise, so when I hear a 0:13:15.280 --> 0:13:18.080 voter talk about noise complaints, I'm like, yeah, I do 0:13:18.200 --> 0:13:19.040 not like I. 0:13:18.920 --> 0:13:19.720 Totally get that. 0:13:20.160 --> 0:13:24.160 On the other hand, if I hear you know, some 0:13:24.280 --> 0:13:29.320 conspiracy theory, you know, some maybe less informed water takes, 0:13:29.600 --> 0:13:32.959 or you know, my pet has started vomiting because a 0:13:33.040 --> 0:13:36.160 new data center was nearby, I'm like, maybe you're reading 0:13:36.200 --> 0:13:40.560 too much like Instagram reels, et cetera. Generally, speaking of 0:13:40.640 --> 0:13:44.200 the people you talk to who are passionate about the issue, 0:13:44.760 --> 0:13:48.560 how well informed did you find them about both the 0:13:48.600 --> 0:13:53.280 sort of like economics and sort of like lifestyle consequences 0:13:53.720 --> 0:13:56.000 of a data center in their proximity. 0:13:56.200 --> 0:13:58.120 I think this is actually one of the biggest shifts 0:13:58.120 --> 0:14:00.560 for me. I think I came in with expects maybe 0:14:00.600 --> 0:14:03.040 a bit more similar to you. I am generally based 0:14:03.080 --> 0:14:05.320 in San Francisco, and I feel like the caricature of 0:14:05.440 --> 0:14:08.000 data center opponents that people believe is they are all 0:14:08.080 --> 0:14:11.600 just watching too many tiktoks about water. And while that 0:14:11.840 --> 0:14:14.480 certainly was true for some people, like I remember talking 0:14:14.520 --> 0:14:17.760 to this guy outside of a Francescahung event, who was 0:14:17.800 --> 0:14:20.720 wearing a Hotties for Hong t shirt and he was like, yeah, 0:14:20.760 --> 0:14:22.200 like they're building them out here because they want to 0:14:22.240 --> 0:14:24.280 drain the Great Lakes. And I'm like, that's not how 0:14:24.280 --> 0:14:26.840 these things work, Like, that's not why they're here, and 0:14:26.880 --> 0:14:28.880 they are not like sucking up water out of the 0:14:28.880 --> 0:14:31.200 Great Lakes. But I would say that the folks who 0:14:31.280 --> 0:14:34.840 were actively involved in organizing against the data centers, like 0:14:34.880 --> 0:14:38.320 the activists themselves, were much better informed than I expected 0:14:38.320 --> 0:14:41.240 them to be. People knew the difference between say, closed 0:14:41.280 --> 0:14:43.680 loop and open loop cooling systems, one of which uses 0:14:43.680 --> 0:14:46.200 more water than the other. People could tell the difference 0:14:46.240 --> 0:14:48.880 between an AI hyperscale data center and the old kind 0:14:48.880 --> 0:14:52.400 of Internet data centers. Some people said I use AI 0:14:52.600 --> 0:14:55.440 helped me, orite emails whatever. I would say the biggest 0:14:55.440 --> 0:14:59.400 difference was not like were people informed, but how much 0:14:59.520 --> 0:15:02.440 trust is they have in their government and in these 0:15:02.560 --> 0:15:05.320 AI and data center companies, right, And so it was 0:15:05.440 --> 0:15:08.120 much less of a like we're just mistaken about how 0:15:08.200 --> 0:15:11.360 data centers work. It was much more When DT and 0:15:11.440 --> 0:15:13.560 open AI say they're going to cover the cost of 0:15:13.600 --> 0:15:16.960 electricity rate hikes, we don't believe them because DT has 0:15:17.040 --> 0:15:19.560 razor rates for out of the past five years, right 0:15:20.000 --> 0:15:22.040 or yeah, sure, you know they say they're going to 0:15:22.040 --> 0:15:24.800 bring five hundred jobs. But like we saw how Fox 0:15:24.880 --> 0:15:27.360 Con went, we know that corporations break their promises all 0:15:27.400 --> 0:15:29.720 the time, and so I would say the gap among 0:15:29.920 --> 0:15:33.080 anti data center activists was much more about trust than 0:15:33.120 --> 0:15:34.200 it was about information. 0:15:34.520 --> 0:15:36.360 Can you talk a little bit more about what the 0:15:36.480 --> 0:15:41.320 exact pitch is that an AI, a hyperscaler, or you know, 0:15:41.400 --> 0:15:44.720 a data center builder might make to a community when 0:15:44.720 --> 0:15:47.800 they say, we want to take that ugly slab of 0:15:47.840 --> 0:15:50.080 concrete that's just been sitting there for years, and we 0:15:50.120 --> 0:15:51.360 want to put something on top of it. 0:15:51.640 --> 0:15:55.240 For sure, I would say the pitch for why let 0:15:55.320 --> 0:15:58.360 us build a big data center in your community is 0:15:58.520 --> 0:16:03.160 almost entirely about property taxes. So data centers pay a 0:16:03.200 --> 0:16:07.200 lot in property taxes. In Laden County, Virginia, the data 0:16:07.200 --> 0:16:10.320 center capital of the United States, data centers, I think 0:16:10.400 --> 0:16:12.960 pay and make up over fifty percent of the property 0:16:13.000 --> 0:16:15.760 tax base. And part of the reason that Northern Virginia 0:16:15.800 --> 0:16:17.800 and public schools are very well funded is because of 0:16:17.840 --> 0:16:19.800 the data centers, and so people have sort of accepted 0:16:19.840 --> 0:16:24.479 that trade. Or when Microsoft brought their Fairwater data centers 0:16:24.520 --> 0:16:27.080 into Mount Pleasant on the site of the former Fox 0:16:27.120 --> 0:16:30.000 con factory that was supposed to be Microsoft is now 0:16:30.040 --> 0:16:32.600 paying on track to pay about twenty million in property 0:16:32.600 --> 0:16:35.160 taxes for twenty twenty six, which is a huge boon 0:16:35.200 --> 0:16:37.400 to the tax space. And so for a lot of 0:16:37.440 --> 0:16:40.280 local officials who are thinking, how do we bring back 0:16:40.280 --> 0:16:43.680 our commercial tax spase in a time after these factories 0:16:43.720 --> 0:16:46.040 have left our community, a data center is a very 0:16:46.040 --> 0:16:48.080 appealing way to do so. They say, we're going to 0:16:48.120 --> 0:16:51.080 be able to remove the wheel tax in this community. 0:16:51.160 --> 0:16:53.960 We're going to be able to avoid raising property taxes 0:16:53.960 --> 0:16:55.680 on residents. We're going to pay for all these city 0:16:55.720 --> 0:16:59.160 fire services and police services that are expensive. I think 0:16:59.200 --> 0:17:02.000 part of the struggle with data centers is that that's 0:17:02.080 --> 0:17:04.440 really kind of the only pitch that they're making. Sure 0:17:04.480 --> 0:17:07.000 there are some jobs, for sure, like five hundred one 0:17:07.000 --> 0:17:09.720 thousand jobs, but those last two to four years. Sometimes 0:17:09.760 --> 0:17:11.840 they're outsiders, they're not people from the community. 0:17:11.960 --> 0:17:15.159 These are the actual jobs associated with the construction of 0:17:15.200 --> 0:17:16.439 the data Yes, right. 0:17:16.320 --> 0:17:19.240 Okay, yes, you might only have like fifty permanent jobs, 0:17:19.400 --> 0:17:21.280 you know, like a solar farm or something like. People 0:17:21.480 --> 0:17:24.360 aren't really needed to keep it going very much. It's 0:17:24.440 --> 0:17:27.200 mainly a construction effort, which also means it's more out 0:17:27.200 --> 0:17:30.000 of town residents who are coming in, so there's not 0:17:30.080 --> 0:17:32.639 a great jobs pitch. And then also people just I 0:17:32.640 --> 0:17:35.760 think aren't that excited about AI. It's not that they're 0:17:35.800 --> 0:17:38.399 necessarily like worry that AI is gonna go rogue and 0:17:38.440 --> 0:17:40.960 kill them all. Like people didn't bring up those kinds 0:17:41.000 --> 0:17:43.040 of years as much. It was just like, why are 0:17:43.080 --> 0:17:45.960 we as a community taking the hit of having this giant, 0:17:46.040 --> 0:17:50.040 ugly thing in order to produce some coding agents that 0:17:50.119 --> 0:17:52.960 help people in San Francisco. Like people just didn't see 0:17:53.000 --> 0:17:55.040 it as essential to their lives in the way that 0:17:55.400 --> 0:17:57.480 I think a car factory it's like, okay, well we 0:17:57.520 --> 0:18:00.880 all drive cars. Solar farm, well I don't need energy. 0:18:01.320 --> 0:18:03.560 I think the trade with the data center just didn't 0:18:03.560 --> 0:18:06.879 feel as compelling to people because taxes are kind of 0:18:06.960 --> 0:18:10.000 diffuse and hard to grock, and it's kind of unclear, 0:18:10.080 --> 0:18:12.600 like how is that going to benefit me directly? Jobs 0:18:12.920 --> 0:18:16.320 not really a big benefit. And then AI itself, people 0:18:16.320 --> 0:18:18.040 are kind of whatever about. 0:18:18.200 --> 0:18:21.160 In some of the places where data center projects are 0:18:21.200 --> 0:18:24.280 like well off the ground. Some of these like tax 0:18:24.359 --> 0:18:29.280 benefits or whatever are real, right, Like isn't Facebook in 0:18:29.400 --> 0:18:33.040 luis or Meta in Louisiana, Like they are cutting really 0:18:33.119 --> 0:18:38.040 big checks? Yea, Like in your view, if they're like Jasmine, 0:18:38.040 --> 0:18:41.600 come here and like bring both sides together and solve this, Like, 0:18:41.760 --> 0:18:43.800 would you argue that like no, like. 0:18:43.800 --> 0:18:46.600 There it is likely that these can meaningfully move the. 0:18:46.640 --> 0:18:50.959 Dial on terms of pure dollars coming in and like 0:18:51.600 --> 0:18:54.400 would there be inferior solution of like, well, we're gonna, 0:18:54.400 --> 0:18:55.760 you know, let us like pay. 0:18:55.640 --> 0:18:58.359 Your taxes for two years. That will show us, you. 0:18:58.400 --> 0:19:01.199 Know, even before we break ground, like setting aside all 0:19:01.200 --> 0:19:04.840 the complicated things. Could you imagine as we go forward 0:19:04.880 --> 0:19:08.200 eventually like some structures where it's like, okay, the company 0:19:08.320 --> 0:19:12.760 does give some tangible upfront commitment. People get to feel it, 0:19:12.960 --> 0:19:14.760 they get to see their taxs and reduced, they get 0:19:14.760 --> 0:19:17.560 to see their teachers get higher salaries, and then it's like, 0:19:17.560 --> 0:19:19.480 all right, the green light is in for data centers. 0:19:19.560 --> 0:19:21.440 Yeah. I mean, one thing that I think is important 0:19:21.480 --> 0:19:25.320 to recognize is that the landscape of how people feel 0:19:25.320 --> 0:19:27.280 about data centers and how the deals are made has 0:19:27.359 --> 0:19:30.400 changed so dramatically in the last one to two years. 0:19:30.520 --> 0:19:33.880 So at the time that a lot of the proposals 0:19:34.040 --> 0:19:36.639 show up to say your city council in twenty twenty three, 0:19:36.760 --> 0:19:39.400