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There is a great new Substack article about the populist backlash to AI data centers by Jasmine Sun. She also did an interview with Ezra Klein for those of you who like audio content.
I like the article because Sun speaks fluent Silicon Valleyish while also taking the time and effort to visit and talk to the people on the ground in the rural Midwest instead of condecending at them from the coasts. She asks an important question: why precisely do people hate data centers so much?
Looking only at the statistics, AI land use and water use issues are fake. Nowhere is running out of land, and nowhere (West of San Antonio at least) is running out of water. Are the people in these communities stupid? Do they not know how to shut up and multiply?
It turns out that a lot of the fear and anger stems from a combination of distrust and PTSD from deindustrialization. An interesting example is Janesville, Wisconsin, a town with a giant concrete slab in the middle of it where the GM plant used to be.
Fascinating. The collapse of the auto industry in 2008 was apparently so bad that it is better to prevent industrial development alltogether in order to avoid the risk of another collapse. It almost makes sense until you think about it for 30 seconds.
Some of the objections Sun hears in other towns fare a bit better.
This is the steelman of the anti-data center position. People are worried that the big companies proposing data centers are going to Foxconn them and not deliver the supposed benefits.
One of the things that comes across especially clear in the Ezra Klein interview is just how unprepared the AI companies were for the backlash. They didn't realize how sketchy it comes across to insist on NDAs with local officials when negotiating deals. They thought, as a straightforward application of Coase's Theorem would tell you, that any bumps in the road could be ironed out by handing over a big bag of money. It turns out that people don't work that way. It feels like a bribe, and Americans do not like being bribed.
One thing about data centers I keep hearing is that they don't meaningfully contribute jobs to the local community, and I'm not sure why this would be, relative to any other commercial project of similar scale in a given community. Even if the compute on these servers are being used at some arbitrary location on Earth that's completely unrelated to the data center, that specific server needs to be installed, maintained, upgraded, replaced by someone who is physically there. In the long run, sufficiently cheap AI- or remote-controlled robots could replace this, but we're not there yet and I don't think that many people think it's around the corner either, like how so many people seem to believe AGI or even ASI is right around the corner. That person who physically checks on the servers and fixes or replaces it when something breaks or upgrades it just when faster hardware is sufficiently cheap and available to make economical sense would almost definitely live near their job at the data center, and so either that person would be a local or a local import who would spend the money the data center company pays them buying stuff and services from local shops. This seems exactly analogous to any other job of e.g. being a baseball stadium clerk or a warehouse worker.
Yet data centers get talked about as if they're just big slabs of compute that these AI companies build and just place somewhere for other people to be bothered by, never to require paying humans to actually maintain or upgrade the thing. Do these data centers require less jobs or less paying jobs on a per-dollar-invested basis than other similar commercial projects to such a great extent that they can be rounded down to zero? If so, what if we mandated that data centers provide make-work jobs to the local community where people are paid to stand watch to maintain computers that need 1000x less maintenance than they can provide? I've sometimes thought that, given the sheer complexity of the code and tools AI is capable of generating, which far outstrip the ability of any human or even possibly team of humans to understand, and the fact that AI lacks agency or the ability to be held responsible, every company in the future would eventually have precisely one and only one employee, whose job is just to sit around watching the AIs that are literally incomprehensible to them and be summarily fired and replaced if anything goes wrong as a result of AI behavior. Give them an official job title of "scapegoat." We could start doing something like that with AI data centers (give them all golden parachutes so that the money flows to the local economy regardless).
Contrast AI data centers with more traditional industry, say a car factory (perhaps from 20 or 30 years ago).
Per million dollars invested, the car factory created tremendously more local economic activity. I imagine they might have multiple full-time jobs per million dollars, welders and mechanics and office workers who would in turn go to cinemas and super markets and so forth.
In AI, 1M$ buys you perhaps 25 H200 GPUs. They probably fit within a single 2m rack. You install that rack, along with thousand similar ones, and send a technician to replace failing fans. I don't think that this is the price segment where you care about saving a few dollars on fans, so it seems entirely plausible that your 1M$ investment will never require a technician during its economic lifetime. Sure, there is some overhead, like power supply and cooling, but this likewise is stuff which can be made reliably if you are willing to spend big bucks on it.
The intellectual labor of running the data center (to the degree that it still involves humans) is not local at all. The nerds sit in SV and do not spend a dime in the local economy.
For a community, the liability of an industry is proportional to the investment. Permitting someone to build a small theme park for a few million dollars is a limited risk, at worst the town can cough up the costs and shut it down. With a billion dollar investment, things look different. Once that data center is built, it will run, come hell or high water (though paperclips or the bubble bursting might still cause it to be shut down), because the investors have billions on the line and will be sure to phrase the contract in such a way that whomever is running on a "cancel the datacenter" platform will not be able to do so.
If the datacenter offered a thousand local jobs, that might still be worth it. But it does not, it offers a handful of jobs -- plus some temporary economic surplus while it is being built.
Furthermore, the locals likely have an acute awareness of how likely their elected representatives are to actually make a great deal instead of a complete blunder.
From their perspective, it may be fairly described as a Faustian pact -- you do not know that the demon is going to fuck you over, but you know very well that he is much smarter than you are and does not have any straightforward incentive not to fuck you over, so you do the math and decide that you will pass.
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