Odd Lots - Jasmine Sun on What the AI Industry Got Wrong About the Public Backlash

Episode Date: August 21, 2026

Within the AI industry, even the builders of it have been very anxious about the technology. They've talked for years about its potential to create destabilizing job losses. They even spend a lot of time thinking about rogue AI that could lead to human extinction. But for all their anxiety, they missed the thing that's become the most publicly salient: how upset people would be about building data centers. Part of this was understandable. Data center construction has been happening for a long time in America, and it used to be relatively uncontroversial. In fact, cities and states would often design their tax code to incentivize data center construction. Now there's this complete 180. On this episode, we speak with independent writer and Substacker Jasmine Sun, who recently traveled to Wisconsin and Michigan for some on-the-ground reporting about the communities and activists trying to stop data center development. She explains what the pushback is really all about, what it represents, and what future developers will have to do in order to be welcomed in.Come see Odd Lots live in Los Angeles, get your tickets now. Read more:Anthropic-Tied Data Center Inks $1.3 Billion Private Credit LoanPennsylvania Governor Josh Shapiro to Limit New Data Centers Only Bloomberg - Business News, Stock Markets, Finance, Breaking & World News subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at  bloomberg.com/subscriptions/oddlots Subscribe to the Odd Lots NewsletterJoin the conversation: discord.gg/oddlotsSee omnystudio.com/listener for privacy information.

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And I'm Joe Wisenthor. Joe, there are a lot of interesting angles when it comes to AI. Yeah, you think so? Yeah, just to put it mildly. But one of the most interesting things, I think, is that we think about it as this like ephemeral digital technology. Yeah. You know, in some sense, it's like the sass of yours.

That's right. There's a window that you open on your browser and you type stuff into the internet and the internet spit stuff out at you, hopefully not literally. But there is also this very physical component to AI because it involves huge amounts of power, huge amounts of things like memory chips and, of course, put those two things together, huge numbers of data centers. No, this has been like what is sort of fundamentally different about this, at least from a market's perspective, right? Which is that when we had the SaaS boom of the prior decade, et cetera, like by and large, the successful companies, they didn't need to go into debt to build data. They were building garage or whatever, right?

Yeah, they were like building data centers, but like they were not. not so computationally. They were not so massive that it was like they had to borrow money. They funded them from free cash flow quite easily. The company is building on top of that. They just plug into there. There was always availability on an Amazon cloud. There was not like some compute scarcity. You're not like using Slack one day. And then it's like, oh, your four hour window is up. It will reset in a few hours. Like, yes, we're their physical constraints to the AI buildout, which basically, in the history of the internet is totally novel.

Right. And I think that's really emerging as in many ways the prime constraint because it feels like investors still are very happy to more or less fling money at the hyperscalers, at data center projects, at all of those things. There's no capital shortage. Right. There's no capital shortage. What there is is a shortage of, again, power, land, regulatory and political approvals for

actually building these things. Totally. And, you know, this is like such a big country. that it's like, I always think like, yeah, data centers are great. Just like put them out in the middle of nowhere. And then I'm like, oh, that's literally nimbiasm, right? It's like, that's literally what everybody has that thought, oh, there must just be somewhere out in the middle of nowhere to put it.

But A, it's going to be, in theory, near somewhere. And if we could just solve all of our issues by putting everything in the middle of nowhere, there wouldn't be an issue. There are reasons why they're located where they are. They have to be ideally near some sort of power infrastructure. some water infrastructure. These are things that also attract people. It's not hard to imagine that the middle of nowhere might not have a lot of energy and water

infrastructure. Right. Exactly. Otherwise, there'd be a bunch of people there. Right. The other interesting thing about data centers and AI is that it's become one of the very few bipartisan issues, I think, in America. And you have people both on the left and the right now who are saying that they don't like

data centers. They don't want the data centers in their backyard. We interviewed Kathy Hochel, the New York governor, about. her moratorium on building new data centers. So there seems to be a lot of, let's say, feelings when it comes to data centers. And, you know, it did not get as much attention as Kathy Hochle, I imagine, because she's a Democrat, but Texas Governor Greg Abbott just in the last few days, also announcing curbs on the state. People were a little quieter about that one. I have some reasons why maybe it didn't map to people's view of Texas as a state that's just

open for business in a way that big blue states aren't. But as you say, it's bipartisan. And then I would say, like, one other thing that I think is interesting about it is like, so we know the data center controversy, but AI in general is sort of like riven with anxiety on multiple levels. Obviously, for years, people have been talking about, you know, mass job laws. Lately, we've been talking on the podcast about, you know, what people called like X-risk and stuff like that, like truly rogue AI. And in my mind, And I feel like the people inside the labs are very anxious about those other two, these sort of like effects on society and again, literal like safety issues. Are they going to be responsible if everyone loses a job, et cetera? But on the ground, it does not feel like those things are the fears, even though I'm, you know, anxious, like that are really like driving the backlash politics.

If I could sum it all up, it feels very much like data centers are the physical manifestation. of a new technology that is in some ways very hard to sell to America, right? Like here's this thing that is not only going to take your job, but like maybe it'll kill you too. Well, I was going to say, you don't like data centers because you're worried about the noise complaints. I don't like data centers because I'm worried they're going to kill me. We are not the same. We are not the same. All right.

Well, that is the perfect way to put it. And we have the perfect guest to try to talk through all of these various things. We're going to be speaking once again with Jasmine's son. She is an independent writer covering AI in Silicon Valley culture. And she just published an amazing piece of reporting called No Data Centers in My Backyard on her substack. So Jasmine, thank you so much for coming back on all thoughts. I'm so excited to be here again. So congrats on the piece. We were saying earlier, it kind of sounds fun just to hop in a car with a few friends and research assistance and go on a road trip through Middle America looking at data center sites. Yeah. I mean, it was fun.

I was trying to decide where in the country I wanted to go to do the data center road trip. I remember this was the last question I asked Claude Fable before I was taken away from me for several days. And so it was either going to be Michigan, Wisconsin, which is where I ended up going or it was going to be Texas or maybe the southeast, like Memphis, et cetera. And to be entirely honest, part of the reason I ended up doing Michigan, Wisconsin, the Upper Midwest, is because it sounded a lot more pleasant to spend July by the Great Lakes than it did driving across the Texas. this desert. I'm sorry, Greg Abbott. No, I think that's a totally good reason. The Upper Midwest is absolutely lovely this time of year. It's beautiful. And there's lakes and all of that stuff.

When we think about data center activity, I do tend to think more, I guess still in my head, northern Virginia, though there can't be that much space left out there. I do think a fair amount about Texas in part because of sort of like the Elonverse, etc. and how much tech activity is happening there. I probably do think a little bit about the Southeast. How active, though, is that area like how much interest is there in Wisconsin, Michigan in general, about data centers? And what is it about those locations that, okay, it's like these could be attractive geographies for them, given what they need? Yeah. I mean, so Michigan and Wisconsin sort of rank near the middle to the upper middle of the pack when you look

at how many data centers are being built across the 50 states. I think each, of them have maybe around like 50, maybe 200 projects or proposed projects in the state. So it's not an incredible amount compared to, again, Virginia and Texas where you have 600, 800 active data centers or data centers being built. The thing that drew me to Michigan and Wisconsin, one is that I had heard that proposals for new data centers were ramping up. And that's because one, Wisconsin, for example, has a sales tax exemption on the chips and on some construction costs. So that made it a somewhat attractive state. Gretchen Whitmer, governor of Michigan, who has always taken a pretty pro-growth standpoint for Michigan, how do we bring business back, was also sort of actively

courting data centers. And so she did a very controversial photo op with Sam Altman at the Stargate site in Celine, which has become one of the big data center fights in Michigan. And so there are both things that these two states did in order to explicitly attract data center investment. I think there also was enough, like you said, grid access and water access to make these reasonable places to build data centers, like an hour out of the cities, an hour out of Detroit, an hour out of Milwaukee, for example. And then the other thing that was really interesting to me personally as a reporter was I wanted to know how the data center story intersected with A, the history of deindustrialization. I think this is part of why a lot of the politics in those states is about

bringing business and bringing industry back, bringing the skilled trades back, even in some of these very specific sites where their data centers being proposed, they were like, you know, the site of a former GM plant in Janesville that sort of devastated the community when thousands of jobs disappeared during the financial crisis. Do we now want to build a data center there? And will that be the way to revive the community is a question that people are asking or, you know, in Mount Pleasant with the Foxcon site? There was a huge fiasco where Trump said they were bringing all these manufacturing jobs back. They weren't built. So the deindustrialization history was really interesting. And then the second thing was the primaries, which I think have now both come to pass.

But I thought it was going to be a really interesting place to look at, as you mentioned, the bipartisan politics of data centers, the fact that in both states, you were seeing roughly 70, 30 opposition to data centers from both Democrats and Republicans in a very, very polarized battleground states where Dems and Republicans rarely agree on anything. And then AI was also showing up in the Wisconsin governor's race where Francesca Hong was running on a data center moratorium or in the Michigan Senate race where Abdul-Sayed was talking a lot about data centers as sort of one of the examples of money-infecting politics. Yeah, so we're recording this on August 12th and Francesca Hong just lost the Democratic primary in Wisconsin to David Crowley,

which is kind of interesting because one of the people I remember you spoke to on the ground was someone who was saying she explicitly was going to vote for Hong because of her policies around data centers. And I know one primary does not a trend make, but do you get the sense that data centers can be like a winning political platform? Yeah, this is one of the things I was trying to get a handle on because I was wondering like, will the local or state politics be a bit of a microcosm or a bellwether for the national politics of AI? And my sort of summary here is that I think that if you live in a community where a data center is being built or proposed, you don't like it and it's very high salience. It's very important to you. Like the fact that there is a

gigantic construction project that will bring in traffic and noise and whatever for two to six years nearby, that really, really bothers people in the community. When I went to Port Washington, for example, which is another city in Wisconsin, and just talk to random people at Fishgiving, which was this like funny fish festival that we went to in order to talk to the locals. I had never heard about it before. I kind of want to go, even though I like fish. No, it was a real event. It was amazing. There was an Elvis impersonator. Obviously, it's fish giving. America is so good.

That theme was life, liberty, and the pursuit of fish. It was amazing. It was on Lake Michigan. But every single person we talked to there had an opinion on the data center. Because when there is a gigantic, I think, 700-acre facility being built near you, you will care about it. And so salience is super high if you live nearby. But then if you don't live near a data center, like if you're in a zip code where there's nothing being proposed, the polls still show that 70-30, you're roughly against data centers. I talked to Charles Franklin and Marquette, who had done this explicit polling, but the salience is much lower.

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This is a place David Gura has never shopped in his life. Hot topic. The Bloomberg this weekend podcast. Subscribe today on Apple, Spotify, or wherever you listen. These are always very sensitive questions to ask a journalist. And we're supposed to just be open-minded, et cetera. of the people you talk to who were concerned about data centers, in your view, like, there are some really wacky reasons to oppose.

There's some, like, I would, I'm very sensitive to noise. So when I hear a voter talk about noise complaints, I'm like, yeah, I do not, like, I totally get that. On the other hand, if I hear, you know, some conspiracy theory, you know, some maybe less informed water takes or, you know, are my pet is started vomiting because a new data center was nearby. I'm like, oh, maybe you're reading too much like Instagram reels, et cetera. Generally speaking, of the people you talk to who are passionate about the issue, how well informed did you find them about both the sort of like economics and sort of like lifestyle consequences of a data center in their proximity?

I think this is actually one of the biggest shifts for me. I think I came in with expectations, maybe a bit more similar to you. I am generally based in San Francisco, and I feel like the caricature of data center opponents that people believe is they're all just watching too many TikToks about water. And while that certainly was true for some people, like I remember talking to this guy outside of a Francesca Hong event who is wearing a hotties for Hong t-shirt. And he was like, yeah, like they're building out here because they want to drain the Great Lakes. And I'm like, that's not how these things work. Like, that's not why they're here and they are not, like, sucking up water out of the Great Lakes. But I would say that the folks who were actively involved in organizing against the data centers,

like the activists themselves, were much better informed than I expected them to be. People knew the difference between, say, closed loop and open loop cooling systems, one of which uses more water than the other. People could tell the difference between an AI hyperscale data center and the old kind of internet data centers. Some people said, I use AI. It helped me write emails, whatever. I would say the biggest difference was not like were people informed, but how much trust did they have in their government and in these AI and data center companies, right? And so it was much less of a, like, we're just mistaken about how data centers were. It was much more when DTE and Open AI say they're going to cover the cost of electricity rate hikes, we don't believe them because DTE has razor rates or out of the past five years, right?

or yeah, sure, you know, they say they're going to bring 500 jobs, but like we saw how Foxcon went. We know that corporations break their promises all the time. And so I would say the gap among anti-Data Center activists was much more about trust than it was about information. Can you talk a little bit more about what the exact pitch is that an AI, a hyperscaler or, you know, a data center builder might make to a community when they say we want to take that that ugly slab of concrete that's just been sitting there for, years and we want to put something on top of it. For sure. I would say the pitch for why let us build a big data center in your community is almost entirely about property taxes. So

data centers pay a lot in property taxes in Loudoun County, Virginia, the data center capital of the United States. Data centers, I think, pay and make up over 50 percent of the property tax base. And part of the reason that Northern Virginia public schools are very well funded is because of the data centers. And so people have sort of accepted that trade. Or when, you know, Microsoft brought their Fairwater data centers into Mount Pleasant on the site of the former Foxcon factory that was supposed to be, Microsoft is now paying on track to pay about 20 million in property taxes for 26, which is a huge boon to the tax base. And so for a lot of local officials who are thinking, how do we bring back our commercial tax base in a time after these factories have left our

community, a data center is a very appealing way to do so. They say, going to be able to remove the wheel tax in this community. We're going to be able to avoid raising property taxes on residents. We're going to pay for all these city fire services and police services that are expensive. I think part of the struggle with data centers is that that's really kind of the only pitch that they're making. Sure, there are some jobs for sure, like 500,000 jobs, but those last two to four years, sometimes they're outsiders. They're not people from the community. These are the actual jobs associated with the construction of the data center. Yes. Right. Okay. Yes. You might only have like,

50 permanent jobs, you know, like a solar farm or something. Like people aren't really needed to keep it going very much. It's mainly a construction effort, which also means it's more out-of-town residents who are coming in. So there's not a great jobs pitch. And then also people just, I think, aren't that excited about AI. It's not that they're necessarily like worried that AI is going to go rogue and kill them all. Like people didn't bring up those kinds of fears as much. It was just like, why are we as a community taking the hit of having this giant ugly thing in order to produce some coding agents that help people in San Francisco? Like people just didn't see it as essential to their lives in the way that I think a car factory,

it's like, okay, well, we all drive cars, solar farm, well, we all need energy. I think the trade with a data center just didn't feel as compelling to people because taxes are kind of diffuse and hard to grok and it's kind of unclear like how is that going to benefit me directly. Jobs, not really a big benefit. And then AI itself, people are kind of whatever about. In some of the places where data center projects are like well off the ground, some of these like tax benefits or whatever are real, right? Like isn't Facebook in Louis or meta in Louisiana? Like they are cutting really big checks. Yeah. Like in your view, if they're like, Jasmine, come here and like bring both sides together and solve this, like, would you argue that, like, no, like,

it is likely that these can meaningfully move the dial on terms of pure dollars coming in. And, like, would there be, in theory, a solution of like, well, we're going to, you know what, let us, like, pay your taxes for two years. That will show us, you know, even before we break ground, like, setting aside all the complicated things, could you imagine as we go forward eventually, like, some structures where it's like, okay, the company does give. some tangible upfront commitment. People get to feel it.

They get to see their tax and reduce. They get to see their teachers, get higher salaries. And then it's like, all right, the green light is in for data centers. Yeah, I mean, one thing that I think is important to recognize is that the landscape of how people feel about data centers and how the deals are made has changed so dramatically in the last one to two years. So at the time that a lot of the proposals show up to say your city council in 2023, 2024, 2025.

There was no data center backlash, right? And so at the time, it almost feels like the opposite. Like the mayor of Port Washington, where this 700-acre big data center facility is being built in Wisconsin, he was telling me, like, Port Washington had just lost a bid to bring a chip factory into the city. They're, again, one of these cities where factories have closed down and they want a commercial tax base again. And reeling from that, this guy, Ted Nizki, he's like, well, of course we thought a data

Center could be a great way to do that. At the time, they even set up a tax subsidy district for the data center, because they're also worried if we don't do this, maybe the data center is going to go uptown to Sheboygan. Like, what if we lose the bid to another city in the same way, if you guys remember with HQ2, Amazon sort of like dangling, like, who's going to give us the most subsidies to bring our data center here? Because at the time, there was no backlash. Communities want the tax benefits of the data center. Now, of course, it's really changed. And so the data center deals that are being made today are very, very different from the ones that were being made two years ago, three years ago. People are now realizing that you don't need to give META a tax subsidy. In fact,

META should probably pay more up front. They should give these 50K bonuses to public school teachers. Before, there are a lot of NDAs being signed, and that was extremely controversial. Almost everyone I talked to, including all the Pro Data Center people, said, we really regret doing the NDAs. They actually really increased community distrust and backlash. Now Microsoft is saying, we don't want to do NDAs anymore. And I don't think local officials are willing to sign them anymore because they've seen how it amplifies distrust in the community. So I would say that the data center deals that are getting made in 2026 and beyond in light of the backlash are much more, how much can we offer your community to let us build here? Whereas two years ago, it was what can your community offer us for us to come in. Yeah, it feels like the balance of power has shifted a little bit. But that said, reading your reporting, there does seem to be the same. sense that small local governments are perhaps not evenly matched against big tech companies with a lot of money and a lot of lawyers. And so even if you construct the world's most beneficial tax arrangement, you had a lot of people in your piece who were talking about, well, the company is just going to

figure out some way to kind of wriggle out of it. Yeah. And again, I think this is so informed by things like the Foxcon fiasco where people felt that they're part-time city councilmen or whatever, like just made a bad deal because they were not equipped, they were not informed to. Again, like, almost every local official I talked to, they were good people, they were trying to do the right thing. They were also getting paid like $5,000 a year to do this on top of a normal day job. And so it is a big power asymmetry between them and like Open AI's lawyers and people in the community recognize that you're not going to have the best deals when it comes from that. And so they'd say, you know, we don't know what carve-outs that the data center developer is going to write in. So let's say

that the AI bubble pops or, you know, open AI goes out of business and so they don't want the data center capacity anymore. Like what's going to happen to the building? Is it going to be a stranded asset? What kinds of guarantees are they're going to be? And again, there might be ways to set these up in more beneficial ways. Like I think tax guarantees are some of these or making deals to say we're going to pay for 80% of our forecasted electricity demand up front because sometimes those forecasts are wrong and we don't want to like leave you guys on the hook. I think those are really important to make. But fundamentally, it's just such a powery. I mean, one of the most egregious examples that I came across was that Celine Stargate Center in

Michigan, where Saline is a city town of literally less than 3,000 people. It's super rural. It's a little bit out of Ann Arbor, and their city council actually voted for one against the data center development that Oracle and Open AI brought in. And after they voted against it, the data center developer just sued them over exclusionary zoning. And there is no way your town of like less than 3,000 people is going to even bother with a lawsuit against like opening eye Oracle and related digital. It's just not going to happen. And so they immediately settle, of course, for some like improvements to like a fire truck and some investments in farms and whatever. But like again, the power asymmetry really just made residents feel like, okay, like this is not how democracy

is supposed to work. Like a gigantic company should not be able to sue us out of our democratically chosen decisions. So it did agree. One thing that you did write about in the piece, which I was very interested in. And it's something I've been thinking about is the data center boom is sort of a rare moment in recent decades in American history where you have

the capitalists, the tech companies, and the hard hats are actually really into it. And it is, they're not a huge number by volume, but also like when people think about like

quote, working class, unquote, jobs, the kind of jobs that we lost, et cetera. The jobs that are being created are those jobs that people might have in their head as like a good middle class job or the jobs that we had in our glory days. How influential within these communities are the sort of construction companies or workers, some of them unionized in some of these cases who are like, no, we want that activity. Yeah. I mean, I think one of the most memorable conversations I had was with this guy, Terry McGowan, who's a senior VP at the International Union of Operating Engineers, so people who operate like cranes and I don't know what these gigantic machines are called,

but earthmovers, people like that. He was awesome because he was thinking about this from a historical perspective. He was talking about growing up in Milwaukee as a teenager, and he's like, when I was growing up, noise was money. So like I get that is noisy and there's pollution and whatever. But he's like, when I was growing up in Milwaukee, like, we knew that when we saw like the smoke stocks and we heard the noise, that was what was going to feed our kids, that was going to send our kids to school, that was

what was the lifeblood of our community. And so to him it was kind of surprising to see the shift over the past few decades of people losing trust in industry, seeing it not as this is what keeps our economy going, this is what helps working class families, and much more, this is something to be distrusted. And he was saying that he tried to get, for example, some of his union members to speak up at city council meetings and say, like, hey, this is helping me. Like, this is, these are the jobs that are getting created. But even his guys were, like, scared to do it because there was so much opposition that being pro data center was just going to get your neighbors really pissed at you. And I think part of the problem is that there's, again, not that many of these folks and that

even of the people there, some of them come from out of town because there are so many labor shortages. Like, these workers are getting great job, like $100 cash per diems because people want to compete between sites, apprenticeship programs and skilled trades. I've heard from multiple people have been, like, doubling in size or the past couple years. But again, it's just not that many people. So if you're working on a project, you're going to be excited about it. But it's kind of hard to convince someone else in the community who is not. And then I also just think that trust, again, in corporations has cratered over the past few decades. Like GM in Janesville was sort of revered as this is what the community is built on. This is the thing that keeps this going. But when the company

goes bankrupt when they lay off thousands of workers, when they fail to clean up the contaminated brownfield that the factory was built on and leave $30 million of hazardous waste in the ground for the community to deal with. That's a lot of broken trust. And so people are not thinking, oh, let's bring GM back. They're thinking, man, like, we trusted that company and they screwed us over, right? Yeah, I wanted to ask you actually about the social dynamic between the construction workers being brought in for these projects and the, you know, lifelong citizens of small towns, because I know you like to take a sort of anthropological approach to some of your reporting. How do they actually feel about each other?

And I kind of, I got to say, this is a free idea to anyone in Hollywood, but I really think someone needs to come up with a TV series where it's like a giant data center being built in a really small town and the dynamic between like the influx of all the contractors and the locals. You could have some interesting storyline. That's just an aside. But what was that relationship like? Oh, yeah. I mean, just not exactly what we were talking about, but my friends and I who went on the trip, we all watched Eddington before we went over. And I didn't know what kind of movie it was. I just knew it was like kind of about a data center and everyone starts like, you know, shooting each other up. And I'm like, oh, God, is this what we're going to go see?

Yeah, I was thinking something a little bit more lighthearted, but you know, you never know what direction it could go in. No, totally. I mean, so one thing I'll say is I talked to three folks from the trades, but it wasn't an incredible amount. We actually found construction workers and trades people pretty hard to get in touch with. I think partly because they'd all signed NDAs. And also, I just heard anecdotally from so many people that pro data center folks are very scared of talking because they have seen how vicious to get their death threats. You have city counselors resigning bad blood between neighbors. The opposition is pretty intense. And so my guess is that these trades people are a little bit worried. I mean, everyone I talked to in the trades was aware of the backlash. They were like, yeah, we know some people are worried about the

environment. We think it's worth it. But like, we understand. But fundamentally, I think the folks I talked to were more focused on themselves and their work and sort of their benefits. One actually surprising tidbit that I heard was that from Terry to this guy who's a CEO of an electrical contracting company I talked to to, to an HVAC engineer I talked to, they all thought that AI was maybe a bubble or like probably a bubble. Yeah, that was interesting. That was really odd because even the people who are excited about this, who are making their money from it, they were like, yeah, like, it does worry me that, like, the Mag 7 hold, like, 50% of the stock market or like, yeah, it's a bubble, but we'll just move on to the next bubble. We'll diversify, right? And so I think

one thing that was really clear to me was that folks in these communities far away from Silicon Valley, they are deeply unsure about how sustainable the AI boom is. And I think that really informs whether you're willing to take the bet on like a, again, a gigantic construction project that may not even start paying taxes until 10 years in the future is, well, I keep reading on the news, it's a bubble. I don't know if this technology is that helpful to my life. And if it's a bubble, that makes the economic tradeoffs very, very different. Just to quickly go back to the influx of contractors thing, are there any local businesses, like, I don't know, restaurants, sandwich shops, gas stations that are happy that, like you now have 500 workers who maybe weren't there before. and they're all getting their lunch at your shop or something like that. Yeah, I mean, so I heard this more anecdotally, not from the shops themselves. But yeah, like the mayor mentioned that sales taxes in Port Washington have like doubled over the last year, that the sort of home, I don't know what it's called, like the lows equivalent in their community that sold like where they got a ton of revenue,

that tips were up on weekdays. I know Sharon Goldman has also done some reporting about some of the projects in Louisiana. And she talked to some restaurant owners who were saying like, yeah, we're just getting. like crazy amounts of orders now. So I do think that small businesses in the area are probably happy about the influx of new workers. Farmcast and park the bus. Now with full video. It's the same hosts and the same chemistry

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Visit Bloomberg.com slash ask radio to join the conversation right here on Bloomberg Radio. Right prior to the data center explosion that we've really seen basically for two years now, just prior to that, everyone or lots of people were really excited about. the Inflation Reduction Act and all of these re-industrialization efforts. But like some of these issues are going to be exactly the same. Like if you're going to like build like an EV battery plant, that's going to be noisy. That's going to bring in a lot of temporary workers. You know, if you're actually going to have state of the art, it's going to be an electricity user.

That's going to be a water user. And if it's a state of the art factory or if it's going to be a cutting edge factory, it is not going to employ people ever at the scale of like the old like River Rouge GM factory, like modern factories just aren't like that. Do you think some of these concerns, these fights, these issues where, I don't know, it seems like it's not democratic in the ideal sense if certain proponents simply do not feel comfortable making their voices known because they're like just do not, you know, sort of not good for a sort of liberal norms about speech. like, do you think these concerns are generalizable to any attempt at what we all love

the idea of like industrial revitalization? So I think any big heavy manufacturing, any big industrial development does face some opposition, for sure. And that's kind of the classic NIMBY stuff, right? Yeah. But one thing that was really surprising to me is how much more intense data center opposition is, even when compared head-to-head against these other kinds of things. So He-Mab News has done some really good polling on this, where data centers are more unpopular than solar farms, than nuclear plants, then power plants, then battery storage facilities. Like, people are relatively okay with the chip factories and with the Amazon fulfillment centers. And with all of these other things that are, again, environmentally often dirtier, like from a

pollution perspective, that also do bring in lots of construction workers and stuff. But there is something about AI data centers, whether it's people don't really vibe with AI, they're not excited about that, whether it's the expedited, like, sort of secret processes that are used for data centers that aren't as commonly used for the others, or whether it's seeing national narratives about data centers and that amplifying local concern. But, like, I do think that the data center opposition is of a unique and different scale to the opposition to these other things. Well, then I wonder, I mean, if even people are more comfortable with solar farms or nuclear facilities, which, you know, a couple of decades ago, people did not want them around at all,

is it also get back to there's something about AI. Like maybe they don't articulate the X risk, the way people in Silicon Valley talk about it, et cetera. But there is something about AI specifically that just like has these sort of drives these very anxious vibes in a way that something with a similar ecological footprint doesn't. That did end up being my hypothesis. Because again, on one hand, people didn't bring up like deep fakes or drop

loss or X-risk or whatever. People were much more likely to bring up water and the NDAs or something like that. But I think that's what made it feel like there was no pro-faction for data centers, right? Like it didn't feel like a trade-off that's like, yeah, we're going to like deal with this big construction project, but we're going to get more energy or something. Or yeah, we all need cars. Like the car's got to be made somewhere. I think with AI, people were just like, but do we need it at all? And so then if you're not even sure whether you need it at all, then the trade of like, let me accept this big cost is pretty significant. Again, one of the things that distinguishes,

I think the classic NIMBY story from the data center story, is that people who do not live near data centers are as opposed to data centers as people who live near them. And normally with NIMBY's, it's like, I do want housing somewhere else. I do want a nuclear plant somewhere else. With data centers, people are saying, I don't want them anywhere because I don't really think we need this AI thing.

And so I think it's a failure of Silicon Valley, frankly, in the AI industry and also governments as well to make the positive. of case for why is it important to our society that we actually enable the AI build out? Yeah, it feels like there's a lot of generalized downside given that people are worried about things like jobs and maybe even a robot apocalypse or at the very least they don't feel the technology is that relevant to them. And then even if there's hyper localized upside in the form of like, well, maybe some more jobs, although not that many and maybe some additional income, although you

don't even trust how much income that will end up being. It feels like, like this is a very hard dynamic to escape. If you're a big hyperscaler or a data center company, how are you supposed to fix this? Because you can promise the moon, basically, and it feels like people still aren't going to accept the offer. Yeah, I mean, it's really interesting coming back to us off and talking to folks I know in the AI industry, some even involved in building data centers. And one of the questions that I'll hear is, like, do we just like need to make the bribes bigger? Like, what if we just like mail checks everyone's house? And like, One is that might work, but I think one other thing I realized when I was out in the Midwest is actually

sometimes the bigger the numbers, the more suspicious people get because the more it feels like this sort of dark money, shady, like, is this a bubble type situation? I think that like getting the community benefits right is certainly part of it. I think another, and I actually became much more sympathetic to the statewide moratoriums after my trip than before it. I think before I was sort of like this seems like a kind of blunt tool. I don't think stopping data centers will actually regulate AI. But now I see the moratorium.

whether it's Kathy Hokels or Greg Abbott's or whatever, as like, again, we know that there's this power asymmetry between these tiny towns and these big companies. We shouldn't expect a town of 3,000 or 20,000 people to get a good deal to extract the right guarantees. I think that actually bringing that up to the state level and maybe taking a pause for the state officials to figure out, like, we want, you know, X millions of community benefits per megawatt, or we're going to mandate these environmental standards, closed loop cooling, X percent renewable energy, etc. These are going to be the rate prior protections we implement at the state level, and we will pause until everyone agrees to that. You could also see a world where that's better for

data center developers because they no longer have to manage all of these individual negotiation processes quite as much if those standards have been set at the state level. So I think I'm pretty optimistic about that kind of streamlining. I know it was a relevant factor actually with a solar buildout too. And the reason I keep referencing solar is because that also went through a period of controversy in Wisconsin and Michigan. And so people often talked about it. And bringing state level regulation was kind of like part of the solve there. And then I guess like part of it is also just like I think that both the AI industry and governments have to do a better job making that pro case. Like I was disappointed, frankly. And a lot of the local officials I met with how poorly they were able to articulate like why it would be beneficial to their community to.

make this deal. Like I think if you are responsible for leading economic development, like, it is kind of on you to talk to your constituents, to understand their concerns and to do whatever community engagement process that is required in order to achieve that. But it's also just like very, very hard, you know. Right. I mean, if the constituents don't believe anything you or the company says because there's just a lack of trust, both in government and in corporate America at the moment, it feels very difficult to convince them otherwise. Yeah, I think these are all things that I think could make things better. But like fundamentally, like, I think that the domestic politics will be a constraint on the buildout. There is a reason that the AI companies are now building out compute

capacity in Australia, in Canada, in Europe even. And so I think that people very much see that there is a risk to the AI build out if we expect to have to win over all these American communities. and the global build-out, even the idea of data centers in space, for example, which is extremely speculated at this point, but is something that folks are investing in. The ultimate nimbism. Send them to space. No, because people are literally thinking, you know, there's nobody in space to stop me. And I think that's very motivating to why Elon wants to do it. This one, you get the aliens knocking on your door going on. Oh, gosh. Well, I actually, I wanted to ask you about China because I know you've traveled around there

relatively recently. Do you get the same sense of data center pushback in a place like China? I didn't explore the data centers issue as much as I would have liked to when I was there because I was mostly sticking to the cities. And similarly, the data center belt out was in, say, Guajo province or in some less populated areas of the north. So it was not happening around the cities. If I were to, you know, wager a hypothesis, my sense is that as with other big developments in China, there is just not a culture of resistance. Like, Numer's. B-Bism doesn't really exist in China because people do not own private property anyway. And so, like, when your land gets eminent domain or taken for a government project,

there's not as much of a channel in order to push back. Both culturally, there's not an expectation. And politically, it's not a democracy. It's an authoritarian state. So you are going to lose. So whether there is or is not, like, data center opposition, I'm sure some Chinese people are annoyed about the data centers being built. if it's in their backyard, if it's on their farm.

But my guess is, like, fundamentally, like you're just not going to see the political pushback that is, I think, a specific quality of American democracy that a local town can't actually stop a hyperscale developer from coming in. That makes sense. By the way, you know, like when Governor Hockel came on oddlod, I think a lot of people did find it quite compelling

when she was like, look, actually, we do want data centers, but we want to come up with a template that actually just we know is, like, positive sum. And I think a lot of people actually found that to be fairly convincing in the sense like what's happening so fast, these towns do not really have the sort of, I guess you'd call it state capacity or government capacity to really figure these things out on their own. They don't have the in-house expertise. Let's come up with a repeatable template that we have reason to believe works in town after town. I don't know. It seems plausible to work.

Something I'm curious about like putting back your SF hat on. And, you know, clearly the AI industry, they're very anxious about AI themselves, right? We know that. And they've anticipated in advance backlash, but they've mostly focused on this risk of job displacement. And so you see they'll write essays about we're going to need a new social contract. We're going to need maybe to rethink the welfare state. We're going to need to think, you know, some VC rights to think about the meaning of work or whatever. How much of would you say the last two years or three years within AI is a big

thing of like AI executives just not correctly anticipating the first source of actual attention? They thought it was going to be about jobs. Many of them have probably been like unrealistic in their timelines for job displacement. We've been hearing six months until the big white collar wipeout for like almost probably two and a half years now. How much of it is like they thought the flashpoint was going to be one thing and it turned out to be another thing? I mean, I think that's a big issue. Jobs, of course, people are really concerned about like when you look at the national

polling there. Like people are certainly anxious about their jobs. But yeah, data centers, I don't think people expected the kids safety stuff. I don't think people expected. The thing I always tell my friends here is I'm like, yeah, like, there are no kids and no data centers in San Francisco. So no wonder you guys didn't worry about it. But the thing is like, these are the ways that AI material.

shows up in like everyday people's lives right like they are not their job has not been lost yet in most cases they are not thinking about the speculative future super intelligence and whether that's going to like have a coup or something like that but like their kid is already cheating on their homework a data center is already showing up in their city and so i think that because you know sf is a bubble the AI industry is a bubble most people in that world kind of only talk to other people in that world and never leave and so i think that they are just frankly blind to the ways that AI is already showing up elsewhere. And they're sort of focused on their somewhat longer timelines and beliefs about

dramatic AI capabilities in the future instead of, nope, this is like having effects on people's lives right now and those effects are not all good. And so I do think the last six months has been a real reckoning that I'm hearing from the AI industry about like, oh, shoot, we really got to do something about this data center's thing. And even with the jobs thing,

like I think that the AI executives have only started changing their tune on this in the last few months after realizing like talking about white. color job loss all the time does not make people very happy. And so I don't know, I did this event in San Francisco on Monday. And it was quite a few like people from the industry there. And someone from Open AI came up and mentioned. He was like, yeah, we're like discussing your article in our Slack because we're trying to think about the fact that we haven't been telling very positive or effective stories about AI. And this is really coming to bite us. And I was like, I'm glad you guys are having those conversations. Well, so, you know, this is just another sort of SF question. But like, in the labs, like,

especially, you know, obviously the open AI hugging face attack, like all these things. You know, they talk about job loss, et cetera. Like, how pervasive and how widespread is the sort of like the X risk fears, like the real fears? And would you say, like, within the labs or within SF, more than data centers, even more than job loss, which they might be comfortable talking about because it could just sort of be solved maybe by tax and redistributed. etc, that like this like sort of like real like the big one is like growing in SF like the big fear? Yeah, I mean it's interesting because at the same time folks are realizing, oh yeah, the rest of the

country is worried about these more near-term risks or near-term harms. The thing that people here are honestly worried about is cyber attacks. Like I think mythos was a huge wake-up call both through people in SF and frankly people in D.C. is like, what does it mean that this thing is now an extremely effective cyberweights? What does that mean for OpenSforce? For who gets access to the cyber weapon, which countries, which companies, is this defense or offense dominant? I think people are starting to think about bio more seriously of, okay, maybe it's a cyber weapon

today. Is it going to be a bioweapon in six months or 12 months? What does that mean for the national securitization of this technology? And then the hugging face incident was to a lot of people look like these sci-fi stories that rationalist forums were talking about five years ago, they were like, shoot, is it coming true. Like our internal model that we were testing decided to like cheat on its eval, cheat on its homework, basically, by like hacking into another system and leaving notes for its future self. I think this worry about AI's trying to take a bunch of steps autonomously to pursue a goal you've

set and then reward hacking, basically, taking some unexpected, harmful route to get to the end result. That story is actually starting to play out in a pretty serious way. And so while the AI industry sees, say, the data center backlash has something to manage. on the public perception front, the thing that they are truly, truly worried about right now is, I think, alignment to cyber and biarisk. All right. I think that's a good place to end it. Maybe not a good place, but a logical place to end it.

A place to end it. Jasmine, thank you so much coming back on all thoughts. It's always good to chat. Yeah, this is so fun. Thanks for having me. Yeah, Joe, that was a fascinating conversation. I mean, it does feel like some of the struggle right now. I mean, I wouldn't even necessarily say it's a marketing problem.

It's just identifying the upside problem for large hyperscalers who are building models that, you know, like not only can take your job, but maybe they'll, I don't know, take control of your bank account or kill us all with some new bio weapon. That seems like a tough sales pitch. Right, but we'll give you a $50,000 bonus. And people still don't trust the $50,000 bonus. It is weird that I believe, maybe I'm wrong, but I believe there's still probably like, cities, town, states, etc. That have tax incentives for data centers. And it always blows to my mind when I read that because, like, this is the bottle neck. This is the bottleneck to end all bottlenecks.

This is the scarcity to end all scarcity. You should be milking it for all its work. And it's like you're still competing or you still nominally have something on your books to attract data center companies. Like, it seems like the obvious first move is like get rid of that and just reverse all the signs. Right? It's like, no, you're paying double sales tax or whatever. This was the other thing I was thinking because Jasmine described the balance of power shifting to exactly that, right?

Like, there aren't a lot of places that still have, there are some, but not a lot that still have tax incentives to attract data centers. Most of them are asking for payments from the companies themselves. And so I was thinking as that becomes the standard maybe template for a lot of these projects, you know, hyperscalers and data center companies are really going to have to pay up for that space. it's another liability on their balance sheet, right? Oh, totally. Everything is just getting more expensive. Yeah, that's right. So everything is getting more, every component and like maybe look, at the mergers,

meta's like cuts to teachers and that one parish in Louisiana is not really going to move the dial. But like on their own and every one of these, yes, it's like the whole thing is just going to get more expensive. Because think about every data center you have now has a tax guarantee. Like that could be a substantial. liability even for a big tech company. No, of course. Every single thing is going to add up. So obviously, prior to the last three years, there were a lot of data centers being

built in America. It's interesting to me that like the people Jasmine talked to felt they had different opinions on like a GPU AI data center versus the old data center that may be like how is the cash of Netflix films for that area or whatever and that people receive to be their indifference. I am not surprised that, A, given how easy it was to build data centers up until recently, and B, how most people in the AI industry, their own anxiety is about something much more existential that they just didn't really anticipate in a very good way that, like, no, this would be where the rubber

hits the road, because it's like, if you're worried about, like, AI causing human extinction, like you're probably not thinking like, oh, are the people in Janesville? Like, have we convinced them enough that like their tax bill is going to go down? Hey, but if you want AI to cause human extinction, you got to get that data center up and running. That's the first step. All right.

Shall we leave it there? Let's leave it there. This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Joe Wisenthal. You can follow me at the stalwart. Follow our guest, Jasmine's son.

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