Transcript

Make It Reign · Politix

0:00
SPEAKER_01: Don't work with Donald Trump to freeze utility rates in 2027.
0:03
SPEAKER_00: Don't give him $2 trillion of infrastructure if he wrecks the economy.
0:08
SPEAKER_00: Don't give him stimulus.
0:10
SPEAKER_00: Don't let him sign his name to checks.
0:12
SPEAKER_00: If some industry collapses and needs a bailout, no is the answer.
0:24
SPEAKER_00: This week,
0:25
SPEAKER_00: Donald Trump says everyone should learn to stop worrying and love data centers,
0:30
SPEAKER_00: which are among the most unpopular things in the country.
0:33
SPEAKER_00: So we'll talk about the data center backlash,
0:36
SPEAKER_00: how Democrats should navigate the politics of data centers,
0:39
SPEAKER_00: and whether data center moratoria make any sense as policy.
0:44
SPEAKER_00: Then, is the resistance dead?
0:47
SPEAKER_00: We know resistance chic is cringe,
0:49
SPEAKER_00: and three prominent first Trump term resisters recently lost their Democratic
0:53
SPEAKER_00: congressional primaries.
0:55
SPEAKER_00: Does that mean it's time to stop fighting Trump
0:57
SPEAKER_00: or does it just mean Democratic voters have simply lost patience with grifters
1:01
SPEAKER_00: and cowards?
1:03
SPEAKER_00: We'll talk about all of it.
1:04
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1:13
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1:26
SPEAKER_00: Hello and welcome to the Politics Podcast.
1:27
SPEAKER_00: I'm Brian Boyler.
1:28
SPEAKER_00: I'm Matthew Iglesias.
1:31
SPEAKER_00: How are you doing?
1:32
SPEAKER_00: I'm great.
1:33
SPEAKER_00: Yeah.
1:34
SPEAKER_00: I have our topics pretty clear in mind, but I didn't have any like- I'm
1:37
SPEAKER_01: fired up.
1:38
SPEAKER_01: I'm ready to go.
1:39
SPEAKER_01: I'm ready to let data reign.
1:41
SPEAKER_01: Are you?
1:42
SPEAKER_01: As President Trump called for.
1:44
SPEAKER_00: See, you spent four years or whatever being like,
1:48
SPEAKER_00: increase the salience of popular issues, blah, blah, blah.
1:51
SPEAKER_00: And then- No, I'm excited.
1:54
SPEAKER_01: I got to tell you, I've been in the trenches on developing data center talking points.
1:59
SPEAKER_01: We're ready to go.
2:01
SPEAKER_01: I think if he'd said to like, let it rain, R-A-I-N, that might be better than
2:06
SPEAKER_00: R-E-I-G-N.
2:08
SPEAKER_00: I heard the quote before I read it.
2:10
SPEAKER_00: And so when I went to search for it, I assumed because he's like not super...
2:19
SPEAKER_00: Like high vocabulary person.
2:21
SPEAKER_00: I search for rain as in precipitation, not as in.
2:25
SPEAKER_01: Well, because he's from an oral culture, right?
2:27
SPEAKER_01: But I think it's like, let data rain, like make it rain at the strip club.
2:32
SPEAKER_01: You know, I think like sort of makes sense as a pitch.
2:34
SPEAKER_01: Like we're all going to get rich off data.
2:37
SPEAKER_00: It's a better metaphor because data is something that kind of flows in the same way
2:42
SPEAKER_00: that water flows.
2:43
SPEAKER_00: It's not a thing that we want to Right.
2:47
SPEAKER_01: But so to offer the explanation,
2:49
SPEAKER_01: he said,
2:51
SPEAKER_01: obviously,
2:51
SPEAKER_01: the Trump administration has been strongly,
2:54
SPEAKER_01: if somewhat vaguely, pro-AI in general, but the data center issue...
3:02
SPEAKER_01: Which had been kind of percolating all spring and summer.
3:05
SPEAKER_00: Wait, should I read the whole thing?
3:07
SPEAKER_00: I have it here.
3:08
SPEAKER_01: Yeah, as part of the August news doldrums,
3:10
SPEAKER_01: I think it's just become like all anybody was talking.
3:13
SPEAKER_01: People aren't even just talking about data centers.
3:15
SPEAKER_01: They're like talking about takes about data centers.
3:18
SPEAKER_01: And so President Trump decided to do a truth social in which he weighed in hard on
3:25
SPEAKER_01: the side of the data center industry.
3:26
SPEAKER_01: And I just do think it's important if you read the quote for people to understand
3:30
SPEAKER_01: that the rain is an R-E-I-G-N.
3:34
SPEAKER_01: Because I do think it's important because I think people are...
3:40
SPEAKER_01: And Trump did just like phrase it as like,
3:57
SPEAKER_01: Bow down to the almighty power of data centers rather than like,
4:02
SPEAKER_01: this is a win-win agenda for economic growth.
4:04
SPEAKER_01: You're right.
4:04
SPEAKER_00: It's like contextually important.
4:06
SPEAKER_00: I did like,
4:07
SPEAKER_00: in pasting it into my notes,
4:09
SPEAKER_00: I did like put an editor's bracket to be like, mention that it's REIGN.
4:15
SPEAKER_00: I will read the whole quote.
4:16
SPEAKER_00: I will read the whole quote.
4:16
SPEAKER_00: Let's get it.
4:17
SPEAKER_00: The only reason that communities throughout the USA should not want data centers,
4:21
SPEAKER_00: capital D,
4:22
SPEAKER_00: capital C data centers, is if they want to end up being backwards and poor.
4:27
SPEAKER_00: If they want to be successful and rich with far lower taxes and jobs all over
4:31
SPEAKER_00: the place, let data reign.
4:34
SPEAKER_00: R-E-I-G-N.
4:35
SPEAKER_00: The good news is that there are plenty of other places that want them.
4:39
SPEAKER_00: If we kill the golden goose, you will only have yourselves to blame.
4:44
SPEAKER_00: China could not be happier with this anti-data center movement.
4:47
SPEAKER_00: Actually, they can't believe it's happening.
4:49
SPEAKER_00: President DJT.
4:52
SPEAKER_01: Yeah.
4:53
SPEAKER_01: So...
4:55
SPEAKER_01: You know, I'm working on a piece about data centers.
4:58
SPEAKER_01: Like, I do think it is true that some of the concerns that people have
5:03
SPEAKER_01: about this are not factually accurate.
5:08
SPEAKER_01: It is also true, though, that,
5:11
SPEAKER_00: you know,
5:11
SPEAKER_00: in an earlier era,
5:12
SPEAKER_00: like three years ago,
5:14
SPEAKER_01: when data centers were being built,
5:16
SPEAKER_01: but fewer of them were being built, there was a lot of...
5:21
SPEAKER_01: I don't want to say a lot,
5:22
SPEAKER_01: but actually like one-sided pressure was brought to bear in a lot
5:26
SPEAKER_01: of state legislatures to say,
5:29
SPEAKER_01: well, we want to get data center investment in our state.
5:32
SPEAKER_01: So we should make sure,
5:33
SPEAKER_01: basically because both like industry wanted to build them
5:37
SPEAKER_01: and also they usually sign project labor agreements with the electricians union.
5:43
SPEAKER_01: So a lot of states,
5:45
SPEAKER_01: not the District of Columbia,
5:46
SPEAKER_01: but most states enacted, um,
5:50
SPEAKER_01: Tax incentives for data center construction because when projects are scarce,
5:58
SPEAKER_01: states are like begging to have them come on.
6:01
SPEAKER_01: But the demand for building data centers has soared so much
6:05
SPEAKER_01: that there's now like no real reason that states should be competing
6:09
SPEAKER_01: against each other to get data center construction completed.
6:14
SPEAKER_01: And people have a lot of,
6:17
SPEAKER_01: you know,
6:17
SPEAKER_01: a mix of like real and fake worries about different kinds of impacts,
6:22
SPEAKER_01: including I think most notably energy side impacts, which like are quite real.
6:28
SPEAKER_01: And unless you structure your utility contract properly could lead to higher electricity bills.
6:35
SPEAKER_01: But even setting that aside,
6:38
SPEAKER_01: you know,
6:40
SPEAKER_01: I don't want to say there's only two ways you can power a data center,
6:43
SPEAKER_01: but it's like you can burn fossil fuels to power your data center,
6:48
SPEAKER_01: which one set of people object to.
6:51
SPEAKER_01: Or you can build like utility scale renewable projects to power your data center,
6:56
SPEAKER_01: which a distinct and only, but partially overlapping, people are going to object to.
7:02
SPEAKER_01: Or you can do like some mix of the two.
7:04
SPEAKER_01: And, you know, it's naturally controversial because And J.D.
7:10
SPEAKER_01: Vance went around yesterday trying to have a more measured take than Trump.
7:15
SPEAKER_01: And he was like, look, look, look, it's going to be fine.
7:18
SPEAKER_01: We're just going to tell data center developers that they have to build their own power plants.
7:22
SPEAKER_01: Yeah.
7:24
SPEAKER_01: But that's not actually a very good solution.
7:29
SPEAKER_01: When data center developers build their own power plants,
7:32
SPEAKER_01: what they tend to do is get these low efficiency gas turbines
7:37
SPEAKER_01: that cause more air pollution than like the conventional utility built.
7:43
SPEAKER_01: And Trump's EPA was just putting out a rule to say
7:50
SPEAKER_01: that data center builders aren't going to need to do
7:53
SPEAKER_01: the like normal local consultation process about air quality impacts.
7:58
SPEAKER_01: So, you know,
7:59
SPEAKER_01: I'm not like as anti-data center as like
8:03
SPEAKER_01: the most anti-data center person you will find on the internet,
8:07
SPEAKER_01: but the Trump administration is going to Really around the bend over this in a way
8:12
SPEAKER_01: that I think it's quite easy to rally the troops against.
8:17
SPEAKER_00: I have found it useful to zoom out much further than you are
8:20
SPEAKER_00: to contextualize what people are like, what is the data center fight about?
8:26
SPEAKER_00: And it's like, it is about a lot of things.
8:29
SPEAKER_00: And because it's like people whipping each other up and forging alignments,
8:35
SPEAKER_00: there's a kind of Blending of super valid concerns and less valid ones.
8:44
SPEAKER_00: And also a kind of
8:48
SPEAKER_00: like a fuzzying of like what data centers are,
8:51
SPEAKER_00: what they're for, what purposes they serve, right?
8:54
SPEAKER_00: So I think that like in a world where data centers had zero environmental impact and
9:02
SPEAKER_00: the technology industry was not controversial, right?
9:06
SPEAKER_00: There would still be data center opposition in rural communities for various reasons, right?
9:11
SPEAKER_00: Like they're ugly, you know?
9:13
SPEAKER_00: It's like normal NIMBY stuff.
9:16
SPEAKER_00: And then you might have like a back and forth with the residents
9:19
SPEAKER_00: of those communities trying to come to terms,
9:21
SPEAKER_00: or you might move on to somewhere else.
9:24
SPEAKER_00: But that's not the situation.
9:27
SPEAKER_00: As you say, there are
9:31
SPEAKER_00: like genuine environmental concerns and And energy consumption concerns.
9:37
SPEAKER_00: And the technology industry is very controversial.
9:41
SPEAKER_00: And the AI industry,
9:43
SPEAKER_00: which is part of what the data centers power,
9:46
SPEAKER_00: or the architecture of, are especially controversial.
9:50
SPEAKER_00: So you have a situation where trying to tease these things out
9:56
SPEAKER_00: and reach accommodation is not going to happen, I don't think, without...
10:02
SPEAKER_00: Gaining a little bit of clarity, right?
10:04
SPEAKER_00: So without data centers, it's not just that you'd stop the AI revolution in its tracks.
10:13
SPEAKER_00: You'd also impair the functioning of the internet,
10:16
SPEAKER_00: like the regular internet,
10:17
SPEAKER_00: which is a mixed bag,
10:18
SPEAKER_00: but I think most people wouldn't want to throw baby out with the bathwater.
10:24
SPEAKER_00: And if you could get people to accept...
10:30
SPEAKER_00: That no matter what future lies ahead of us, there will be data centers.
10:34
SPEAKER_00: There'll be more than currently have been built.
10:38
SPEAKER_00: And that they can be made to be cleaner than they are.
10:42
SPEAKER_00: That they are,
10:43
SPEAKER_00: compared to like other industrial facilities,
10:46
SPEAKER_00: not particularly environmentally damaging.
10:49
SPEAKER_00: That they don't cause problems.
10:51
SPEAKER_00: People to get cancer by mysterious means or whatever.
10:58
SPEAKER_00: You can get closer to easing this mass suspicion or hatred of data centers.
11:06
SPEAKER_00: But I think the thing that would really have to happen is that the people
11:14
SPEAKER_00: who were basically coming in and saying,
11:17
SPEAKER_00: we get to build data centers on our terms,
11:20
SPEAKER_00: Would have to submit not just to like the local community terms
11:25
SPEAKER_00: on environmental cleanliness, power consumption, et cetera, et cetera.
11:29
SPEAKER_00: Like tax benefits, whatever else.
11:32
SPEAKER_00: They would have to submit to national scale regulation of the artificial intelligence industry.
11:42
SPEAKER_00: So that the faction within the anti-data center movement that is motivated by a desire...
11:50
SPEAKER_00: To at least gain some democratic,
11:53
SPEAKER_00: small-D democratic control over the AI revolution have their concerns answered.
11:58
SPEAKER_00: If you don't do that part of it, I don't think that this backlash ever really ends.
12:05
SPEAKER_01: Maybe.
12:07
SPEAKER_01: I think it is a little bit unclear how relevant this
12:15
SPEAKER_01: The data center construction question is to the frontier AI company training conversation.
12:25
SPEAKER_01: I think it's like a little bit of like a known unknown in this because
12:30
SPEAKER_01: the data centers that are used to train frontier AI models are
12:37
SPEAKER_01: the most location agnostic data centers in the whole world.
12:43
SPEAKER_01: You know what I mean?
12:43
SPEAKER_01: Like you could train a new AI model like in Northern Canada,
12:51
SPEAKER_01: you could do it on the moon,
12:53
SPEAKER_01: you could do it on Elon Musk's satellites, et cetera, et cetera, et cetera.
12:57
SPEAKER_01: The data centers that sort of like want to be in specific locations,
13:02
SPEAKER_01: some of them are for AI and some of them are for the regular internet,
13:05
SPEAKER_01: but they're for like consumer use.
13:08
SPEAKER_01: And the, you know, something that people have learned It's a series of tubes.
13:34
SPEAKER_01: Is because the internet was originally a military project and like
13:39
SPEAKER_01: an important piece of physical infrastructure underlying the internet for
13:43
SPEAKER_01: the whole East Coast of the United States is just located in Virginia.
13:48
SPEAKER_01: And the East Coast of the United States is an unusually important location,
13:53
SPEAKER_01: in part because Washington, D.C. is a large city, but Philadelphia is also here.
13:58
SPEAKER_01: New York is also here.
14:00
SPEAKER_01: Boston is also here.
14:01
SPEAKER_01: And then because MIT is physically near Boston,
14:05
SPEAKER_01: and MIT was also an important part of the early physical construction of
14:10
SPEAKER_01: the internet, that gateway matters a lot.
14:14
SPEAKER_01: And so to serve internet services to people,
14:18
SPEAKER_01: whether that's Netflix or ChatGPT or whatever else,
14:22
SPEAKER_01: like data centers want to be not like in the middle of major American cities,
14:28
SPEAKER_01: but like near them.
14:30
SPEAKER_01: There's a lot of data centers in New Jersey because they're trying
14:35
SPEAKER_01: to do like Financial services and they need to interact with
14:39
SPEAKER_01: the New York Stock Exchange.
14:41
SPEAKER_01: There's a lot of data centers in California because like the tech companies are there.
14:46
SPEAKER_01: There are just like more data centers kind of around Chicago because a lot
14:51
SPEAKER_01: of people live in Chicago.
14:53
SPEAKER_01: Now they're building a lot in Texas because Texas is both a place
14:57
SPEAKER_01: where it's like relatively easy to build electricity infrastructure,
15:01
SPEAKER_01: but also just like there's big cities in Texas.
15:06
SPEAKER_01: I hope that some kind of deal around AI as such can be achieved, but I'm not sure.
15:17
SPEAKER_01: But I do think that just like...
15:20
SPEAKER_01: I've seen a lot of articles that are like,
15:24
SPEAKER_01: you know,
15:24
SPEAKER_01: we need to sort of like take people's slightly inchoate concerns with AI
15:29
SPEAKER_01: and like build it up.
15:30
SPEAKER_01: And...
15:32
SPEAKER_01: I'm not opposed to that.
15:33
SPEAKER_01: But I also do think that just like the granular like tax
15:37
SPEAKER_01: and regulatory issues around this,
15:40
SPEAKER_01: which are like,
15:40
SPEAKER_01: you know,
15:41
SPEAKER_01: a little bit confused by the mass public because that's the nature of
15:45
SPEAKER_01: the mass public.
15:46
SPEAKER_01: They're pretty serious.
15:48
SPEAKER_01: Like it's totally valid for people to...
15:53
SPEAKER_01: I didn't even say valid.
15:54
SPEAKER_01: Like I'm not a conservative.
15:57
SPEAKER_01: I am not upset by the prospect of American farmland being converted
16:01
SPEAKER_01: to utility scale solar projects.
16:04
SPEAKER_01: But if that is something that bothers you, it is true.
16:08
SPEAKER_01: That the development of data centers in Texas is tending to lead toward
16:13
SPEAKER_01: the development of more high-voltage transmission lines,
16:16
SPEAKER_01: more utility-scale solar projects.
16:18
SPEAKER_01: It is also tending to lead to the development of more natural gas burning,
16:22
SPEAKER_01: which you might object to for environmental reasons,
16:25
SPEAKER_01: for climate reasons, for air quality reasons.
16:28
SPEAKER_01: But also,
16:29
SPEAKER_01: like Vance is trying to pitch you on, well,
16:32
SPEAKER_01: if they bring their own power, that's not going to influence your electricity bill.
16:37
SPEAKER_01: But that's not true.
16:39
SPEAKER_01: Unless you build the data center right in the Permian Basin,
16:44
SPEAKER_01: it's going to compete for the supply of natural gas with other things,
16:49
SPEAKER_01: which can be fine, but it depends on how the fee structure is.
16:54
SPEAKER_01: I was dwelling on the ambiguity between let data RAIN reign and let data REIN reign,
17:02
SPEAKER_01: because I do think it's important.
17:04
SPEAKER_01: There's a version Of a data center pitch that's like,
17:10
SPEAKER_01: I have a specific economic formula in mind,
17:15
SPEAKER_01: which is going to ensure that the wealth
17:18
SPEAKER_01: of this exciting new industry is broadly shared and
17:21
SPEAKER_01: that it makes most people better off.
17:24
SPEAKER_01: And there's a version of the pitch that's like,
17:28
SPEAKER_01: all I care about is the performance of the S&P 500, so I want to defer that.
17:34
SPEAKER_01: Endlessly to what maximizes the short-term profits of the tech industry.
17:40
SPEAKER_01: And like, those are just different ideas.
17:42
SPEAKER_01: And Trump,
17:44
SPEAKER_01: both through his choice of spelling,
17:46
SPEAKER_01: but like also actually in his policies, is choosing the second one.
17:51
SPEAKER_01: And it's, you know, it's bad.
17:57
SPEAKER_00: So I take issue with some of that, right?
18:02
SPEAKER_00: That the banding together of various inchoate opposition to data centers is just a good thing.
18:10
SPEAKER_00: I don't want people to labor under misinformation or disinformation or delusion about stuff.
18:19
SPEAKER_00: And so I think there is work you could do at the margin to try to make
18:24
SPEAKER_00: the opposition more coherent.
18:32
SPEAKER_00: Don't really have that reason.
18:34
SPEAKER_00: It's not like they're lying to the pollster or whatever,
18:36
SPEAKER_00: but they're not really quite clear about what it is,
18:39
SPEAKER_00: but they know there's something about this that they don't like.
18:43
SPEAKER_00: And even if this approach where just like every community
18:49
SPEAKER_00: where people can get organized, you say no data centers here.
18:54
SPEAKER_00: And like that,
18:55
SPEAKER_00: just because it's so scattershot doesn't like Perfectly target the AI data centers.
19:07
SPEAKER_00: It is still like a important leverage tool to force a negotiation that isn't hyperlocal, right?
19:16
SPEAKER_00: That is at least at the level of whole states,
19:19
SPEAKER_00: if not at the national level, which is where it ultimately should be.
19:23
SPEAKER_00: Because like, you know, you say you can...
19:28
SPEAKER_00: You can train the AI models on the moon.
19:32
SPEAKER_00: I mean, to be clear, I can't.
19:35
SPEAKER_00: It is technically feasible.
19:37
SPEAKER_00: I have my doubts.
19:40
SPEAKER_00: Anything that requires people,
19:42
SPEAKER_00: even if it's a small number of people,
19:46
SPEAKER_00: to do service work on the data centers,
19:49
SPEAKER_00: it's not going to be easy to put them in orbit.
19:52
SPEAKER_00: Just not.
19:55
SPEAKER_00: People go into orbit.
19:57
SPEAKER_00: It's not like a growth industry, okay?
20:02
SPEAKER_00: But my point is less about like Elon Musk fantasies about this all being put
20:06
SPEAKER_00: into outer space at some point.
20:09
SPEAKER_00: It's that when you have hyper-local opposition,
20:15
SPEAKER_00: then the frontier AI people can be like,
20:19
SPEAKER_00: well, we can just build these anywhere we want.
20:23
SPEAKER_00: You can say, okay, yeah, go ahead.
20:24
SPEAKER_00: Like inconvenience yourself,
20:25
SPEAKER_00: go out into the hinterlands or just build AIs around your fucking mansions
20:29
SPEAKER_00: or I'm sorry, build hyperscalers around your mansions.
20:32
SPEAKER_00: Like don't bring them here.
20:34
SPEAKER_00: Is it like A,
20:35
SPEAKER_00: does cause them some inconvenience and B,
20:38
SPEAKER_00: it leaves them to choose this status quo where everyone hates them and nobody wants
20:43
SPEAKER_00: to see their industry succeed, right?
20:45
SPEAKER_00: So that is the leverage, right?
20:46
SPEAKER_00: That is the thing that will get them to the table.
20:49
SPEAKER_00: And then you can have like some kind of,
20:52
SPEAKER_00: Like reason settlement about A,
20:57
SPEAKER_00: like what communities should expect from the tech companies when they come to town
21:03
SPEAKER_00: to build a data center and B, what are they building it for?
21:07
SPEAKER_00: And like,
21:08
SPEAKER_00: How much say do we,
21:10
SPEAKER_00: as opposed to they,
21:11
SPEAKER_00: have over how it is going to insinuate itself into our lives and into society?
21:16
SPEAKER_00: And so it's just good.
21:18
SPEAKER_00: That is better than the status quo ante,
21:22
SPEAKER_00: where they were just doing this irrespective of public opinion.
21:27
SPEAKER_00: It's like a positive change.
21:30
SPEAKER_00: And there's another- Well, hang on.
21:32
SPEAKER_00: And then there's another reason why it's good,
21:36
SPEAKER_00: which is- 75% of the country is opposed to data centers.
21:41
SPEAKER_00: Not all those people hate Donald Trump,
21:43
SPEAKER_00: but the ones who do,
21:44
SPEAKER_00: which are a significant chunk of the 75%, they should realize that Trump is trapped.
21:51
SPEAKER_00: The reason he tweeted that insane thing that puts him on the wrong side of a 25-75 issue
21:57
SPEAKER_00: Is that if the data center build out stalls or slows dramatically,
22:04
SPEAKER_00: the economy could enter recession because it is really what's fueling the economy at
22:08
SPEAKER_00: the moment.
22:12
SPEAKER_00: That would plunge the right wing into an even more serious political crisis
22:16
SPEAKER_00: than it's already in the midst of, right?
22:19
SPEAKER_00: And I know it's uncouth to hope for that to happen.
22:22
SPEAKER_00: But this is the world that Trump made.
22:25
SPEAKER_00: And we should not exceed to runaway AI to letting data reign, REIGN.
22:32
SPEAKER_00: Like when we have real misgivings over it just to protect Donald Trump from seeing
22:37
SPEAKER_00: the bottom fall out of his economy.
22:39
SPEAKER_00: So there's like...
22:41
SPEAKER_00: I am with you.
22:43
SPEAKER_00: At some point,
22:44
SPEAKER_00: there will be value in having a really granular,
22:51
SPEAKER_00: fact-based, reasoned debate over what well-calibrated data center policy is.
22:59
SPEAKER_00: But for now, corner these guys.
23:03
SPEAKER_01: Yeah, but like, so, okay.
23:05
SPEAKER_01: So, I mean, just for example, this is like a late-breaking policy scoop.
23:10
SPEAKER_01: But yesterday,
23:12
SPEAKER_01: Morning, I saw,
23:13
SPEAKER_01: you know,
23:14
SPEAKER_01: a guy I know works in the progressive think tank infrastructure,
23:19
SPEAKER_01: you know,
23:19
SPEAKER_01: uncovered that,
23:20
SPEAKER_01: I don't want to say uncovered,
23:22
SPEAKER_01: but just like went back through the text of the One Big Beautiful Bill Act.
23:27
SPEAKER_01: And saw that part of the stated purpose of the expansion of
23:33
SPEAKER_01: the Opportunity Zone tax credits that were included in that bill was to make sure
23:40
SPEAKER_01: that data center investments were
23:43
SPEAKER_00: covered under the umbrella of this tax credit.
23:47
SPEAKER_01: And, you know,
23:47
SPEAKER_01: he was workshopping this around, like,
23:49
SPEAKER_01: passed it to some other wonks because,
23:51
SPEAKER_01: you know,
23:52
SPEAKER_01: people like to check out,
23:53
SPEAKER_01: like, If we run with this claim, are our allies going to say we're full of shit?
23:58
SPEAKER_00: Hang on, hang on.
23:59
SPEAKER_00: Give this person credit because I noticed it, but I don't know who.
24:04
SPEAKER_00: Brendan Duke.
24:05
SPEAKER_00: Oh, I know Brendan.
24:06
SPEAKER_00: Center of Budget and Policy Priorities.
24:08
SPEAKER_00: Yeah, he unearthed the oppo factoid of the whole cycle maybe.
24:14
SPEAKER_01: Well, so like, I mean, he put this out, you know, like ran it by various people.
24:18
SPEAKER_01: And we're like, yeah, like this checks out.
24:19
SPEAKER_01: He put it out on Twitter.
24:21
SPEAKER_01: And then, you know, by the afternoon, Hakeem Jeffries was doing a press conference.
24:25
SPEAKER_01: We're going to talk about what he sort of like formally rolled out.
24:29
SPEAKER_01: But in the kind of just like,
24:31
SPEAKER_01: Jibber jabbering portion at the end, like he's now using his talking point.
24:36
SPEAKER_01: He's saying almost every Republican in the House voted to give like
24:39
SPEAKER_01: a special tax break to data center development while also,
24:43
SPEAKER_01: you know,
24:43
SPEAKER_01: cutting Medicaid and SNAP and blah, blah, blah, blah, blah, blah,
24:46
SPEAKER_00: blah, blah.
24:47
SPEAKER_00: Which this pairs with an earlier talking point that's still valid that they also voted for.
24:54
SPEAKER_00: And for federal preemption of local development rules around data centers, right?
25:23
SPEAKER_01: The essence of the data center debate is not about the expansion of
25:27
SPEAKER_01: the federal opportunity zone tax credit.
25:30
SPEAKER_01: You know what I mean?
25:30
SPEAKER_01: Like that is like not what this is about.
25:34
SPEAKER_01: That being said,
25:35
SPEAKER_01: it's like by shrinking things down,
25:40
SPEAKER_01: it is sometimes more possible to like do politics because everybody is now going
25:47
SPEAKER_01: to say some version of If you're a Democrat,
25:51
SPEAKER_01: like we need a,
25:53
SPEAKER_01: Warnock was like,
25:54
SPEAKER_01: we need a data center moratorium until the data center industry can prove.
25:58
SPEAKER_01: And then he has like X, Y, and Z demands.
26:01
SPEAKER_01: And then you have somebody like Vance,
26:02
SPEAKER_01: anyone who's like a little more nimble than Trump or Greg Abbott was like,
26:06
SPEAKER_01: I'm doing a data center moratorium.
26:09
SPEAKER_01: But then like his moratorium just amounts to like four kind
26:13
SPEAKER_01: of like pretty lightweight conditions that people are going to need
26:16
SPEAKER_01: to get approval versus Warnock.
26:18
SPEAKER_01: Warnock was like heavier.
26:20
SPEAKER_01: So you get into this granularity.
26:22
SPEAKER_01: It's going to be really, really challenging for people to parse in detail.
26:27
SPEAKER_01: What's not challenging to parse is like who voted to give a huge tax break to
26:32
SPEAKER_01: the data center industry and who didn't.
26:35
SPEAKER_01: You know,
26:36
SPEAKER_01: even though it's like a little bit petty compared to like the scale
26:40
SPEAKER_01: of existential concerns about artificial intelligence and so on and so forth.
26:44
SPEAKER_01: Like, I think that that is sort of productive, you know.
26:48
SPEAKER_00: Well, it's revelatory.
26:49
SPEAKER_00: You know what I mean?
26:50
SPEAKER_00: I think it's more than that.
26:52
SPEAKER_00: I think like.
26:53
SPEAKER_01: By the time people- You don't want to go too big because you know who proposed
26:56
SPEAKER_01: a big tax break for data center development in her 2024 presidential campaign?
27:01
SPEAKER_01: It's former Vice President Kamala Harris.
27:03
SPEAKER_00: But this can also bury her 28 aspirations.
27:06
SPEAKER_00: So, I mean, it's crazy because if you, you really do, I think, politics isn't fair.
27:13
SPEAKER_00: The politicians are not going to be fair to each other.
27:15
SPEAKER_00: I'm saying that like we should know that like-
27:21
SPEAKER_00: The concerns about AI percolated before Donald Trump was elected,
27:27
SPEAKER_00: but really exploded when he gave those people who all donated
27:32
SPEAKER_00: to his campaign carte blanche to do whatever the fuck they wanted.
27:34
SPEAKER_00: That's when it really kicked into hyperdrive.
27:37
SPEAKER_00: And if you had polled...
27:42
SPEAKER_00: Opinion on data centers back in mid 2024 or 2023.
27:46
SPEAKER_00: I do not think you would have found 75, 25 against.
27:49
SPEAKER_00: I think you would have found a lot of people who had no idea, like, or no strong opinion, right?
27:54
SPEAKER_00: And so it's true.
27:56
SPEAKER_00: If you go back to like the first phase one of the data center build out,
28:00
SPEAKER_00: Democrats, Republicans, everyone was like, come build the data centers here.
28:05
SPEAKER_00: We'll throw money at you.
28:06
SPEAKER_00: And like now that looks like they swallowed poison, like without realizing it.
28:12
SPEAKER_00: But I think that the question is much more ripe circa mid 2025
28:18
SPEAKER_00: when Republicans are weighing what to do in the OBBBA.
28:24
SPEAKER_00: And the fact that they were like,
28:26
SPEAKER_00: let's supercharge this,
28:29
SPEAKER_00: even though there's no regulation,
28:31
SPEAKER_00: these guys,
28:32
SPEAKER_00: and like they are, you know, they think that they're masters of the universe.
28:37
SPEAKER_00: It like really does tell you something.
28:39
SPEAKER_00: It is revelatory.
28:41
SPEAKER_00: Now, that doesn't mean that I'm saying that when Trump won,
28:46
SPEAKER_00: all Democrats found Jesus and became huge data center skeptics or AI skeptics.
28:51
SPEAKER_00: There is a spectrum of opinion in the Democratic Party,
28:54
SPEAKER_00: just as there's a spectrum of opinion on tariffs and trade.
28:58
SPEAKER_00: But as with everything,
29:00
SPEAKER_00: I think there is a reasoned debate in the Democratic Party about that stuff.
29:04
SPEAKER_00: And then there's Donald Trump's bullshit.
29:05
SPEAKER_00: There's a reasoned debate about...
29:08
SPEAKER_00: What AI regulation should look like,
29:09
SPEAKER_00: whether there should be a real hard moratorium or just like a slowing down,
29:14
SPEAKER_00: like something stronger than what Greg Abbott has done while we try
29:18
SPEAKER_00: to get our hands around it.
29:19
SPEAKER_00: And then there's the let data reign people who voted for the OBBBA
29:24
SPEAKER_00: and support Donald Trump tooth and nail.
29:26
SPEAKER_00: Like I think that paints a more accurate picture of like Like how the politics
29:32
SPEAKER_00: of this have changed and that if you like take a snapshot from 2023,
29:36
SPEAKER_00: you can make someone who today has like come around or sees the picture differently,
29:42
SPEAKER_00: look like they're cozying up to whoever,
29:45
SPEAKER_00: you know, like Anthropic or OpenAI or Sam Altman or whoever.
29:50
SPEAKER_00: And it's just not really what happened.
29:53
SPEAKER_01: Yes.
29:54
SPEAKER_01: You know,
29:54
SPEAKER_01: the other thing I would say,
29:55
SPEAKER_01: you mentioned the idea that like The data center build out is like holding
30:00
SPEAKER_01: the whole economy aloft.
30:03
SPEAKER_01: And that might be true.
30:05
SPEAKER_01: But I think to an extent, Trump,
30:10
SPEAKER_01: I think that Trump is being manipulated by industry propagandists a little in terms
30:18
SPEAKER_01: of believing this.
30:20
SPEAKER_01: There's crowd out of both financing and of real resources.
30:26
SPEAKER_01: I talk to people who develop apartment buildings for a living,
30:32
SPEAKER_01: and they're saying that the pay for skilled tradespeople is escalating way ahead
30:40
SPEAKER_01: of rents because they're getting diverted into data center construction.
30:47
SPEAKER_01: And, you know, on an infinite time horizon, it's like it's fine.
30:51
SPEAKER_01: Like more people will train as plumbers and electricians
30:54
SPEAKER_01: and they'll probably like earn better living as plumbers and electricians
30:58
SPEAKER_01: than it's like guys working at Chipotle or whatever they're doing now.
31:02
SPEAKER_01: But in the short run,
31:04
SPEAKER_01: the fact that such a large share
31:08
SPEAKER_01: of economic growth is data center construction doesn't mean that if we slow the pace
31:13
SPEAKER_01: of data center approvals, the whole economy will go down the tubes.
31:18
SPEAKER_01: That's a convenient...
31:23
SPEAKER_01: Talking point,
31:24
SPEAKER_01: if you're a lobbyist for data centers to help sell Trump,
31:30
SPEAKER_01: you have to steer the course on this unpopular thing.
31:32
SPEAKER_00: I mean, imagine like a very rapid slowdown of data center construction or like
31:40
SPEAKER_00: an immediate moratorium nationally.
31:42
SPEAKER_01: Yeah, that
31:43
SPEAKER_00: would be bad.
31:45
SPEAKER_00: I am not saying that's going to happen.
31:47
SPEAKER_00: It's quite clearly not.
31:49
SPEAKER_00: But Trump is correct that if that happened,
31:52
SPEAKER_00: it wouldn't just be like, oh,
31:53
SPEAKER_00: all the Loudoun County data construction people would fan across the country
31:57
SPEAKER_00: to build housing for everyone, right?
31:59
SPEAKER_00: Like there would be a...
32:03
SPEAKER_00: A layoff period and then a relocation period and people would be pissed.
32:09
SPEAKER_00: It would fuck things up.
32:10
SPEAKER_00: I mean, I did not get the impression that the data center build out was propping up
32:15
SPEAKER_00: the economy from tech people.
32:17
SPEAKER_00: I got it from the economists who read Bureau of Labor Statistics.
32:22
SPEAKER_01: No, I know.
32:23
SPEAKER_01: I know, I know.
32:24
SPEAKER_01: I'm just saying that these identities are not necessarily a cause of relationship.
32:28
SPEAKER_01: I just, I want to, how do I put it?
32:31
SPEAKER_01: Reassure people that I think,
32:34
SPEAKER_01: you know,
32:36
SPEAKER_01: so on a state level,
32:39
SPEAKER_01: I think there's like actually a risk to moving really aggressively
32:44
SPEAKER_01: with data center moratoriums
32:46
SPEAKER_01: because you could lose out,
32:50
SPEAKER_01: you know, I mean, Politics are complicated.
32:53
SPEAKER_01: You know,
32:53
SPEAKER_01: I was up in Maine all summer and you've got towns where absolutely nobody
32:57
SPEAKER_01: in their right mind would ever consider building a data center,
33:00
SPEAKER_01: adopting data center moratoriums.
33:02
SPEAKER_01: And it's like kind of funny.
33:04
SPEAKER_01: And, you know,
33:05
SPEAKER_01: I talk to people at these companies and they're like, yeah,
33:07
SPEAKER_01: believe me,
33:07
SPEAKER_01: like nobody, nobody wants to build a data center in Maine or Massachusetts.
33:11
SPEAKER_01: It would cost a fortune.
33:13
SPEAKER_01: But like Wisconsin, right, where this has been an issue of wrangling.
33:18
SPEAKER_01: Is deriving genuine economic benefit.
33:21
SPEAKER_00: It's actually just an unfortunate coincidence that
33:24
SPEAKER_00: the person Democrats finally nominated to be governor,
33:27
SPEAKER_00: like the safety candidate,
33:28
SPEAKER_00: his name happens to start with,
33:29
SPEAKER_00: Happens to start with the letter D so that you can alliterate it
33:32
SPEAKER_00: as data center David.
33:34
SPEAKER_00: Because if his name was James, it doesn't really work.
33:37
SPEAKER_01: He's data center David Crowley.
33:38
SPEAKER_01: I mean, it's DCDC.
33:41
SPEAKER_01: No, no.
33:41
SPEAKER_01: But I mean,
33:41
SPEAKER_01: just to say,
33:42
SPEAKER_01: you know,
33:42
SPEAKER_01: in these cold weather Midwestern states that have been struggling
33:47
SPEAKER_01: to attract investment capital for a long time,
33:50
SPEAKER_01: there is like a real question of like,
33:53
SPEAKER_01: how do you modulate this appropriately to have a good economic opportunity
33:56
SPEAKER_01: for your state?
33:57
SPEAKER_01: I think that when you flip this to the federal policy conversation,
34:01
SPEAKER_01: like how should Congress think about this?
34:04
SPEAKER_01: I'm actually like much more comfortable saying
34:07
SPEAKER_01: that like Congress should go pretty hard against the industry because slowing down
34:13
SPEAKER_01: the pace of domestic data center construction,
34:16
SPEAKER_01: not like bringing it to a screeching halt,
34:19
SPEAKER_01: but slowing it significantly by giving it less favorable tax treatment,
34:23
SPEAKER_01: by making it do proper environmental reviews.
34:27
SPEAKER_01: And by some kind of FERC process to ensure that these energy deals are on the level,
34:34
SPEAKER_01: like we'll be fine.
34:35
SPEAKER_01: Like the national economy will weather that storm just fine because even
34:40
SPEAKER_01: though these skilled tradespeople would prefer to have like an insane bidding war
34:45
SPEAKER_01: for their services, like we will live if they build apartment buildings instead.
34:49
SPEAKER_01: So, you know, I think I was interested to see Jeffries mention this tax angle.
34:59
SPEAKER_01: Schumer and Jeffries have both talked about the EPA angle.
35:03
SPEAKER_01: There are many questions,
35:04
SPEAKER_01: as we know,
35:05
SPEAKER_01: about the fate of independent executive agencies and the basic rule of law in
35:11
SPEAKER_01: the United States of America regarding this.
35:13
SPEAKER_01: Like, what is the point of having a Clean Air Act if the president can just be like, hmm?
35:22
SPEAKER_01: Like I'm not enforcing the rules as long as I'm in office.
35:25
SPEAKER_01: Like there's a question.
35:26
SPEAKER_00: What's the point of having a law called the Clean Air Act?
35:29
SPEAKER_00: If for everything the agency entrusted to implement it tries to do to clean the air,
35:35
SPEAKER_00: they have to go back to Congress for like an explicit...
35:39
SPEAKER_00: Because otherwise it's not unitary executive.
35:41
SPEAKER_01: So, you know, there's many fruitful federal public policy issues here.
35:47
SPEAKER_01: And like,
35:47
SPEAKER_01: I don't think I worry a little bit about the like level of hysteria around water,
35:54
SPEAKER_01: just because companies can address that in a really,
35:57
SPEAKER_01: really, really low friction kind of way.
35:59
SPEAKER_01: But these energy system stuff, you know, there's good stuff to do.
36:03
SPEAKER_01: And We should take a break and go to the turn because it appears
36:08
SPEAKER_01: that House Democrats are going to do what we've been calling on them
36:13
SPEAKER_01: to do sporadically over these many months and develop some kind of agenda.
36:18
SPEAKER_01: And they teased the main building blocks of that, but they have a ways to go.
36:25
SPEAKER_01: And data centers just seems obviously like something...
36:29
SPEAKER_01: Something you're going to want to have something on in this fall election.
36:32
SPEAKER_00: What Matt is trying to say is that if you want
36:34
SPEAKER_00: to know what Democratic leaders are going to do because they get their ideas
36:41
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36:44
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36:45
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36:50
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36:52
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36:55
SPEAKER_00: All right.
36:56
SPEAKER_00: We'll talk about that on the other side of the paywall.