The Ezra Klein Show: The A.I. Revolt Is Here

Hard Fork

In this episode of The Ezra Klein Show, journalist Jasmine Sun discusses her reporting trip through the Midwest, where she explored grassroo

Key takeaways

Data center opposition is growing rapidly, with 70% of voters now opposing such projects in their communities.
The backlash stems not just from local impacts like power consumption and noise but also from distrust toward Big Tech's influence and lack of transparency.

Main topics

Public opposition to AI data center construction
Environmental and infrastructural impacts of hyperscale data centers

Notable quotes

"These hyperscale AI data centers consume enormous amounts of power, truly threatening to outpace our grid's capacity, and they drive up costs for local ratepayers."

Conclusion

The backlash against AI data centers reflects deeper anxieties about corporate power,

Transcript preview

Speaker 5 (0:00) I'm John Caramonica, a critic at The New Speaker 4 (0:02) York Times. And I'm Joe Cascarelli, a culture reporter at The Speaker 5 (0:04) Times. Together we host PopCast, a weekly pop culture chat show where we speak to the biggest musicians, actors, internet celebrities, and more. Speaker 4 (0:12) We've had Bad Bunny, Olivia Rodrigo, and Anne Speaker 5 (0:14) Hathaway. We've also hosted live performances with Andre 3000 and Erykah Badu. Plus, we end every conversation with a snack. Catch new episodes of PopCast every week on YouTube. And Speaker 7 (0:25) anywhere you get your podcasts. Speaker 6 (0:50) So we are taking this week off along with our producers to get ready for our finale extravaganza, our last ever episode of Hard Fork, which will be next week. And when you see the choreography, you'll understand why we needed a week to prepare. Exactly. There's pyro, there's choreo. It's going to be a big production. There's Oreos. Speaker 6 (1:10) But until then, we have a very special treat to share with you. You may remember past Hard Fork guest Jasmine Sun. She recently appeared on The Ezra Klein Show to talk about her reporting on... data centers. Yeah, Speaker 7 (1:23) she took this really fascinating reporting trip through the Midwest this summer, interviewing people on all sides of the debate throughout Wisconsin and Michigan. She wrote a piece called No Data Centers in My Backyard, Money, Power, and Populism in the AI Buildout on her Substack. Really great, really worth a read. And after you read it, you should listen to this conversation with Ezra. Yeah. And then we'll be back next week one more time. Among other things, we'll tell you what we're doing next. Speaker 6 (1:53) We'll be back in a week to say goodbye and bring you our very special finale episode. But in the meantime, enjoy Jasmine and Ezra talking about data centers. Speaker 4 (2:29) What is big, ugly, and has united Republicans and Democrats at a time when it has felt like nothing else could? AI data centers. Last August, a heat map news poll found that about four in 10 voters would oppose a data center being built where they live. By May of this year, opposition grew to seven in 10. Florida Governor Ron DeSantis, a Republican, of course, has proposed a new citizens bill of rights for AI. The incentives of big tech. are not the same as Speaker 5 (2:59) what's in the interest of the people and the public. Speaker 4 (3:03) Senator Bernie Sanders called for a national data center moratorium. This moratorium will give Speaker 8 (3:07) democracy Speaker 4 (3:08) a chance to Speaker 8 (3:10) catch up with the transformative changes that we are witnessing and make sure that the benefits of these technologies work for all of us, not just the wealthiest Speaker 4 (3:22) people on earth. There are over 100 local or statewide moratorium proposals across the country. And here in New York, Governor Kathy Hochul, not usually thought of as a hardcore populist, just imposed a one-year moratorium on data center construction. Speaker 1 (3:36) These hyperscale AI data centers consume enormous amounts of power, truly threatening to outpace our grid's capacity, and they drive up costs for local ratepayers. And I refuse to let those costs be passed on to New Yorkers who already pay too much for their utility bills. Speaker 4 (3:58) So I wanted to get into the fight over data centers. How much of this is really about water or electricity or aesthetics? And how much is about AI itself and the companies that are behind it? My guest today is Jasmine Sun. Jasmine has been doing excellent coverage of both the culture inside the AI companies, unusual culture. and the anger that is building against them in the rest of the country. I highly recommend following her sub stack, but right now she just finished a reporting trip in the Midwest, talking to the people organizing against these data centers. And I wanted to hear what she learned. Speaker 7 (4:56) I use a Speaker 8 (5:00) different starting word every day. Speaker 7 (5:03) And Speaker 8 (5:04) I love a one-pan recipe because I don't love washing pans. Speaker 7 (5:09) Celebrating 175 years of helping you understand the world and make the most of each day. Subscribe now for a special offer at nytimes.com slash subscribe. Speaker 4 (5:21) Jasmine Sun, welcome to the show. Speaker 3 (5:23) I'm so excited to be here. Speaker 4 (5:24) So you just got back from a reporting trip in Wisconsin, Michigan, covering the fight over data centers. Let's just start with what you see when you're near a data center. What does it look like? Speaker 3 (5:37) I think one of the most important things about rural Wisconsin and rural Michigan is how beautiful it is. I felt like I was in Eden. I felt like I was in paradise. It's incredibly lush, incredibly green. And as you get closer to a data center, you start to see more power lines. You start to see more towers. And eventually you just see what looks like an extremely... large, flat warehouse. But you just see this sort of like verdant landscape give way to what is a windowless industrial park. Data centers are very ugly. I think I didn't appreciate this until I started standing in front of them, getting near them, listening to them. People will... time how long it takes to drive past a data center on the highway going 70 miles per hour in Port Washington. I think it's like a minute and 42 seconds. The size of these things. That's Speaker 4 (6:29) long on a highway. Speaker 3 (6:30) It is a long, long ride. Like these hyperscale data centers are huge. They are massive. And so I think that the aesthetic questions right around is this what I want my state, my community to look like? These are really salient to people. Speaker 4 (6:45) You mentioned hearing them. What do they sound like? Speaker 3 (6:49) Oh, my gosh. I mean, they sound like humming, buzzing, whirring. Every once in a while, you'll hear a rattling. Speaker 5 (6:57) Residents who live next door to some of them say they're producing noise that's not only annoying, but debilitating, like this right here. Speaker 3 (7:08) But again, they're windowless. There are not that many workers inside. So they're very mechanical sounds. They are inhuman, as a lot of folks would say. Speaker 4 (7:17) So you spent a lot of time with people organizing against data centers. Who were they? Speaker 3 (7:23) You had stay-at-home moms. You had retired executives. You had farmers who didn't like the impacts on their land. You had... activists, professional activists with environmental groups in the state. It was an interesting mix of people, but a lot of women, relatively more left-leaning, though definitely some right-leaning folks as well. So Speaker 4 (7:46) one question I've heard people ask is, how much is this different than other kinds of industrial installations? I mean, there are a lot of things that are built all over the country. that you wouldn't necessarily want to be right next to? Are data centers unusual in this? Or are they, you know, from fracking to industrial agriculture, just like the latest version of it? Speaker 3 (8:11) It's a good question. It's when I... had and thought a lot about before I went. And I've talked to city officials who are confused by this question of, we had a chip fab here, we had an auto plant here, we had a fulfillment center here, and nobody cared as much. Why are data centers so much more unpopular than, say, solar farms, which also faced local opposition in places like Michigan? And so I think while the quality of life concerns around this thing is loud and annoying and ugly and consumes resources are very similar to other industrial projects. There must be some reason that opposition is so much more severe and widespread, even beyond the communities where the data centers are literally being built. And I think that question has a lot to do with the AI, with the AI industry, and sort of the way that people feel about these companies and these projects. Speaker 4 (9:01) When I read your reporting on this, when I've talked to people involved in this, it always feels to me there are sort of three layers of concerns that are converging into what we call the data center backlash. There's process. Then there's direct impacts, you know, the environment, water, electricity. And then there's AI itself. And maybe let's go through them sort of one by one. One thing that I have been hearing a lot of and I've seen in your reporting as well is the anger over how these processes are going and in particular the use of NDAs, which is Speaker 7 (9:36) not Speaker 4 (9:36) that common, right? I've covered a lot of what does it take to build a housing development and you don't tend to hear a lot of the city councilmen got put under an NDA. So what is happening with these NDAs? Speaker 3 (9:48) Yeah, I mean, this is also something that really surprised me. And I think the NDAs that... I should say Speaker 4 (9:54) non-disclosure agreements. Right, the non Speaker 3 (9:55) -disclosure agreements. This has really inflamed the amount of local opposition that you see. And so basically what would happen oftentimes is there would be some sense starting in city council that maybe a big development project was going to show up. But because of the NDAs, the council members would not be able to disclose. That necessarily it was a data center, necessarily who the customers were going to be, a company like OpenAI or a company like Anthropic or whoever. Or even the size of the project, like how much electricity is this actually going to consume? But whispers would start to get around. I was talking to a VP of a construction union, and he was saying, you know, there's an old Irish saying that the only way to keep a secret between three people is to kill two of them, which I thought was hilarious. And so he's saying when these developers show up, they talk to the general contractor. The general contractor talks to all their subcontractors. The subcontractors talk to all their workers. Yes, maybe everyone is signing NDAs at every part of that process, but whispers get around. as whispers get around, you start to get social media posts, you start to get rumors, and the city council, because they are beholden to these NDAs, they lose the ability to get ahead of the social media narrative. That was something I repeatedly heard from these local government officials, was we could not get ahead of social media because we had signed an NDA and rumors started getting around. But why do the Speaker 4 (11:10) companies want these NDAs signed? Speaker 3 (11:12) I mean, I think they didn't think about it. They didn't realize there would be a backlash. They just thought it would be easier in case. They changed their mind. These companies signed lots of NDAs with their own workers, with anyone who works with them. I don't think there's a good reason. Microsoft has actually decided to stop using NDAs because of the level of backlash. I've heard from people managing compute at some of the other AI labs that they are thinking of making the same decision. One thing that surprised me is all of the pro-data center, pro-build people who I spoke to, whether workers or AI developers, they all regret the NDAs. They all think that they made the situation much worse. Speaker 4 (11:48) What is the impact of a new data center on water usage, water availability in a town? Speaker 3 (11:55) They do require some of it, obviously, primarily for cooling the data centers because these chips and servers run really hot and they need AC. The thing that's gone a bit wrong in the water debate, I think, is that today's new data centers are almost all closed loop systems, closed loop in the same way that air conditioning is closed loop, which means they're... recycling the water within the system and they use a fraction of the water that, you know, golf courses use. And in fact, in places like Janesville, Wisconsin, we would often see a literal golf course right next to the data center site. But they do use some and it has sort of become a very sticky icon of like these things, resource consumption. A lot of folks I talk to in Wisconsin and Michigan, they would say things like, you know, they're building right by the Great Lakes. Why would they do that if they weren't trying to drain the lakes? Why would they do that if they didn't need all this fresh water? Speaker 4 (12:43) And so your view is at this point, the technology has changed such that water is not as big of a deal as maybe it actually was a couple of years ago. I think the next thing people have heard a lot about is energy usage. So walk me through that. Speaker 3 (12:57) The electricity consumption issue is real. So data centers do, in fact, use an incredible amount of electricity. These chips and these servers that are processing gigantic mathematical calculations to make AI work require. tons of energy. All these chips and clusters are talking to each other. You need the interconnections to be really fast in order to get like a chat GPT answer really quickly with low latency. You need these super fast connections, all of that's powered by electricity. So we are talking about a really, really significant amount of new electricity that is going to require new generators, new power plants. It's probably going to be natural gas in the near future. Once the data center is fully operational. There is not a ton of air and water pollution, assuming that everything's working correctly. They are relatively clean facilities. But, you know, like a lot of folks are concerned about the electricity use. They're saying, yeah, maybe the data center doesn't use that much water. Maybe the data center doesn't pollute that much. But what about all of these, you know, new power plants that they're going to build in order to power it? Speaker 4 (13:58) When the tech companies come into these towns and begin talking to the city council members, when they begin talking to the community, what are they? sort of promising on the one hand, right? This is why this will be good for you. And what are they asking for on the other? Speaker 3 (14:14) Yeah, I mean, so these things do provide an incredible amount of tax revenue, right? And so in Mount Pleasant, the... on the old Foxconn site, which ended up being bought out by Microsoft. They saw, oh, there's all this infrastructure already here. Why don't we build a hyperscale data center on this unused, industrially zoned land? Microsoft is on track to pay $19.6 million in property taxes in 2026. This is expected to continue for many years. Again, this is a small village of 28,000 people. And so there are really meaningful property tax benefits. And I do think I find it frustrating personally when anti-data center organizers say, that the job creation is a myth because I think that 500, you know, maybe six-figure jobs for folks who go through apprenticeships that maybe don't need college degrees that last two to six years, that's enough time to build a family. That's enough time to buy a home. I think it's super meaningful. And when I talk to technicians, when I talk to workers, clearly it was extremely meaningful work. I think one of the things that was the most surprising to me when I talked to data center activists was that they responded to so many of the pro-arguments with, I don't believe them. So like this company says that they are going to treat the water with chemicals in it so that it doesn't flow into the lakes. People would say, I don't believe them. I don't think they can do it. People would say, the companies would say, we are going to cover the cost of our own electricity grid build out. We are going to ensure that rates do not go up for all Michiganders. A lot of folks would say. I don't believe them. DTE has raised our electricity rates basically every year since 2022. Why would this be the year that they decide not to do it? I do not believe them. We are going to create 500 jobs and some of these will stick around after the data center is built. People just said, I don't believe them. It was really clear to me that data centers are showing up in an environment of extremely low trust in both governments and in corporations. to the extent where the pro arguments almost do not land because people just aren't interested in anything an outside tech company is going to tell them. They say they have big PR teams. They can say whatever they want. One thing that became really obvious to me when I talked about people at the AI companies and local officials is that two years ago, no one thought that data center backlash was going to be like this. And so these companies were, in fact, looking for things like, does the state have a sales tax exemption, as Wisconsin does, to ensure that they don't have to pay sales taxes on their very expensive chips, on their very expensive GPUs? They were often looking to build in places that might even offer local subsidies to the companies for building in that area. I think that a lot of the... balance of power has shifted as local opposition has ramped up. Now it's the case that I'm hearing from some local officials, if we did this again today, we wouldn't have to offer any subsidies because in fact, now there is so much local opposition that the developers are really looking, where is there going to be a local community and a government that is friendly to our project? How can we have a Christmas tree ornaments worth of community benefits agreements? And so just the nature of these deals and how much they are skewed towards communities versus the AI developers has really changed. Speaker 4 (17:28) One of the things that came up a lot in your reporting and that I thought was interesting was the fear that this is a bubble. For Speaker 3 (17:34) sure. And Speaker 4 (17:35) what's going to happen is your community will agree to something. And then in the middle, the bubble is going to pop and you're Speaker 2 (17:42) going Speaker 4 (17:42) to end up with a. half-finished data center or one that is not being kept up correctly or something where the, you know, promised benefits don't emerge. I mean, you were in Wisconsin, which had a very, very bad experience with Foxconn, which seems to be structuring the way people are thinking about at least some of this. So talk to me a bit about that set of concerns. Speaker 3 (18:04) Absolutely. Yeah. I think in terms of what people in these communities with these data centers feel when they see the projects come in with their gigantic, like $2 billion of investment, like these gigantic numbers that are being dangled, it feels like a bubble to them. One, they're seeing news articles saying maybe AI is a bubble. We don't know it's a bubble, but it could be. Two, you do have experiences like Foxconn where you have an... big tech company show up in a very small community, in this case, Mount Pleasant, Wisconsin, a city of like 28,000 people. It's not very big. Get, you know, hundreds of millions of dollars in infrastructure investment and tax subsidy from the town. Promise 13,000 high-paying manufacturing jobs. And then... pull out because the contract wasn't set up correctly. They decided they didn't actually want to build a bunch of flat screen TVs in Wisconsin. And the, you know, the town is left on the hook having invested all of this money in the grid and in roads. They got, I think, a thousand jobs in the end. Foxconn is still paying back all of this debt that has been accumulated. And so experiences like that have really, really soured people on the question of when an outside big tech company comes in and, you know. promises these gigantic numbers and all of these jobs and all this tax revenue. And it's for this technology that like you can't, a lot of people, they don't see, they don't feel, they don't find personally extremely, extremely useful, not at the levels of these valuations. They have a lot of questions about if the bubble pops, are we going to be the ones left with a stranded asset in our community? I mean, in Janesville, Wisconsin, it was famously the site of this hundred-year-old GM plant that was... centerpiece of the community that employed a ton of people when they left during the financial crash in 2008 and the plant closed down. Not only did it sort of devastate the community from a work perspective, but they also left. $30 million of contamination and hazardous waste in the middle of the city that has never been cleaned up. There's forever chemicals in there. This is why developers have not been able to sell this brownfield is because there's so much waste that GM never cleaned up. And so I think that people worry about what happens if the AI bubble pops, if maybe it doesn't pop and the data center developers just decide. never mind, we want to build elsewhere. Never mind, this data center isn't good enough. We have newer, better technology. And who's going to be left holding the bag? That was the question I heard over and over again. But Speaker 4 (20:19) this is something that I do think is in people's minds. You bring this in, and right now you're at this time of very, very high valuations. And if AI demand isn't quite what you think, or even just the company that was behind this particular data center is not part of the winner's circle, that in a couple of years, what you got is this giant box. Speaker 3 (20:40) Yeah. Speaker 4 (20:40) That's not going to continue being valuable. And so whatever the promised benefits are from it, you know, tax revenue, et cetera. But yeah, maybe they show up for a while. Yeah. Speaker 3 (20:50) But Speaker 4 (20:50) then what if in five years they're gone, but you are left with this infrastructure? It's like they can leave Janesville. Right. With no real concern. They're not there. Their people don't live there. Right. But if you're in Janesville, you do live there. Speaker 3 (21:02) Yes. Yeah. I Speaker 4 (21:03) mean, Speaker 3 (21:03) it's a real concern. You see things like this with Elon's giant Colossus data centers, right, that he built. Out in Memphis. And what Speaker 4 (21:09)