Prof G Markets
00:26:47 · Alex Bores, Ed Elson
[00:26:47] S6: I, myself, am blown away by exactly that how unanimous it was. I think there were 41 local referenda on data centers, and some of votes are still being counted. But I think there's only one where the pro building data center side of that initiative won. I mean, from coast to coast, people were expressing that they want there to be more guardrails. They want there to be more restrictions. And of course, no conversation about the impact on data centers and AI from Tuesday is complete without looking at the Texas governor's race, where a long shot bid by Gina Hinojosa, who ran strongly on rolling back data centers and putting a moratorium on data centers, took out Greg Abbott, who had been the biggest champion of data centers until maybe the few months of the campaign where he saw the political wins and and turned the other way. And so that by itself, Texas being one of the biggest markets, biggest opportunities for growth in data centers, that switch could really have national and and even international implications. [00:27:52] S3: Did that issue define that race? And and did it define other races? I mean, I'd look at Sherrod Brown in Ohio. His his sort of move was calling Husted, quote, the face of data centers in Ohio, and it seemed like that became, like, a a big issue. But, I mean, that was one of the biggest upsets is, you know, also taking governor in Texas. No one thought that was gonna happen. Is that a data center story?
00:27:52 · Ed Elson, Alex Bores
[00:27:52] S3: Did that issue define that race? And and did it define other races? I mean, I'd look at Sherrod Brown in Ohio. His his sort of move was calling Husted, quote, the face of data centers in Ohio, and it seemed like that became, like, a a big issue. But, I mean, that was one of the biggest upsets is, you know, also taking governor in Texas. No one thought that was gonna happen. Is that a data center story? [00:28:18] S6: It's a huge part of the story, and it goes beyond just data centers. I think data centers were dominating the conversation three, four months ago. But by election day in most of these places, it had evolved to be a broader conversation about AI itself, about who gets to set the rules, about whether this is something that democracy still can express, if that's local communities on data centers, or if that's states being allowed to pass their own laws on our AI, or whether they'll be banned from doing so as industry has tried to pass federally. So the fact that there were people running who were made clear that they were going to stand up to entrenched interests, that they were gonna try to empower the American people was a resounding message, and and whether that was on data centers or broadly on regulation on AI. [00:29:06] S3: What do you think voters are most concerned about when it comes to the data centers? I I feel like there's a whole swath of things that people have expressed, but, I mean, what what ranks highest, do you think?
00:29:06 · Ed Elson, Alex Bores
[00:29:06] S3: What do you think voters are most concerned about when it comes to the data centers? I I feel like there's a whole swath of things that people have expressed, but, I mean, what what ranks highest, do you think? [00:29:17] S6: It's tough to separate out the different pieces of it, but there's a debate about whether it is AI itself or just the data center. There... There's lots of things that are just local concerns with the data center. People express a lot of concern about water usage. So in The US, that's pretty highly regulated and we've seen much better behavior than what we've seen in other countries. But the energy prices that might spike because of it, even when a data center is promising to bring its own energy, if it puts a lot more demand on the components that generate energy, that could raise prices for your local utility that's doing it as well. So whether people will truly get their bills frozen or or reduced because of a data center has become a big issue. But there was really interesting polling that showed if you ask people if... How they felt about a data center versus how they felt about an AI data center. Data centers by themselves were still underwater, but an AI data center was another 20 points underwater. Just that it was tied to AI made a big difference. And so you saw OpenAI saying that they are going to try to rebrand data centers as AI compute campuses. I mean, campus sounds fun, but they're still tying the AI into it in a way that I think won't alleviate the very real concerns and fears that Americans have.
00:30:38 · Ed Elson
[00:30:38] S3: You have have proposed, more stringent regulation on AI and data centers. You you had co sponsored a bill in New York that that would have paused data centers... Data center construction for a year. It ended up happening by by a different measure that that governor Hochul later implemented. But when I hear that, this idea that, like, AI data centers are so much worse than data centers, to me, that makes me think that maybe voters are misunderstanding data centers or that that there's... They're being sort of mischaracterized, caricatured in some way as AI equals bad, so we hate this thing. Am I wrong in thinking that? Is is is there a little bit of, I don't know, sort of an anti AI cult that is causing people to maybe irrationally dislike these things, or is it all rational and and warranted?
00:31:38 · Alex Bores
[00:31:38] S6: Well, I think it was Camus who said humans aren't rational. They're rationalizing. So the philosophy of the mind, we can... And and of the voters, can put off there. But there is a... You know, if a data center... I like to point out there are plenty of data centers that exist in my hometown of New York City. They're just in buildings. They're not these big campuses that that impose on land use in lots of ways. So there are legitimate concerns about land use, about power, about noise in some of these places, and all of that's reasonable to talk about. And then there's the separate fact that data centers are the first time that AI is meeting democracy. And so let's say you're fine with a data center, but you're really upset about the way AI is being forced into schools as we saw news with Google this week. Or you're worried about the impact of AI on chatbots or even AI automating your job. You haven't gotten a vote on any of those changes. Polling that Who Decides did that our organization did found that over 70% of Americans agreed that AI has been forced into their workplace, their kid's school, or some other part of their daily life without them being consulted. And so they just feel alienated from being able to make any choice with this technology. And if the first choice you get is whether you could build a local data center, well, I understand people then expressing a broader preference through that vote.
00:33:03 · Ed Elson
[00:33:03] S3: Yeah. It's a great point. Just looking at the market's reaction, so it seems as though investors basically believe that this blue wave, this blue tsunami essentially means that we're gonna have very, very stringent regulation on data centers, or at least data center construction is gonna be significantly slowing down. Neo clouds have sold off massively. All of the all of the names that... Whose only business is to build data centers, they are they are plummeting right now. Interestingly, big tech did not, and it seems as though investors believe that maybe they'll have a competitive advantage over the NeoClouds now, or maybe just that this means that they'll stop spending crazy amounts of money on these data centers, and maybe that's a good thing because it sort of derisks their businesses, unless you disagree with my characterization of what's going on in the markets right now.