Latest / The Clay Travis and Buck Sexton Show / The Tudor Dixon Podcast: Are Data Center Fears Costing Michigan Billions? Mark Mills Explains
Transcript
- 0:01Speaker 1: Welcome to the Tudor Dixon podcast. We are going to
- 0:03Speaker 1: have a great discussion today on data centers. Mark Mills,
- 0:07Speaker 1: the executive director of the National Center for Energy Analytics
- 0:11Speaker 1: is here. And we're gonna discuss this because I just
- 0:13Speaker 1: don't feel like we're getting the full story on data centers.
- 0:16Speaker 1: As we head into election day, we've got all of
- 0:19Speaker 1: these elected or wanting to be elected officials who are
- 0:22Speaker 1: saying they're shutting down data center deals. There's going to
- 0:25Speaker 1: be a moratorium on data centers. And I wanna know, okay,
- 0:30Speaker 1: Is that the right approach? Does that protect us or
- 0:33Speaker 1: does that harm us? Because I don't feel like we
- 0:35Speaker 1: have a lot of experts out there talking to us
- 0:38Speaker 1: about this. I also think that this is a time
- 0:42Speaker 1: when we need to know exactly what's happening in these buildings.
- 0:46Speaker 1: We're being told that there are real dangers. What are
- 0:48Speaker 1: the real dangers? So Mark is going to tell us
- 0:50Speaker 1: everything in just a few minutes. But first, I want
- 0:53Speaker 1: to talk about some striking news that came out on Friday.
- 0:56Speaker 1: I think it's a huge deal. It turns out there's
- 0:59Speaker 1: been a breakthrough in one of the world's deadliest conflicts,
- 1:03Speaker 1: and there's been an unexpected diplomatic role for our first lady.
- 1:07Speaker 1: Reports are saying that Melania Trump has helped secure a
- 1:10Speaker 1: temporary ceasefire between Russia and Ukraine in a war-ravaged Ukrainian city.
- 1:17Speaker 1: This is I mean, impressive. How can we not be
- 1:20Speaker 1: completely amazed by this? What she's doing is opening the
- 1:23Speaker 1: door for humanitarian aid and civilian evacuations for residents who
- 1:27Speaker 1: are trapped in the middle of a war. This could
- 1:29Speaker 1: literally mean the difference between life and death for these people.
- 1:33Speaker 1: The White House says the first lady helped negotiate this
- 1:36Speaker 1: temporary ceasefire in Oleshky. It's a southern Ukrainian city that
- 1:40Speaker 1: is under Russian occupation right now. And the residents are
- 1:45Speaker 1: facing a growing humanitarian crisis. So the agreement is scheduled
- 1:49Speaker 1: to begin on October 29th. It calls for a temporary
- 1:52Speaker 1: halt to military action in the city so that humanitarian
- 1:55Speaker 1: aid can get in and the civilians can be evacuated
- 1:59Speaker 1: through a designated safe passage. Before the war, this is
- 2:03Speaker 1: pretty shocking information. This city was a city of roughly
- 2:06Speaker 1: 24,000 people. Today, estimates are 1,700 to 2,000 people. 24,000
- 2:14Speaker 1: to 1,700 to 2,000. And this is about 50 children.
- 2:19Speaker 1: Right now, they are low on everything. Food, medicine, clean water, electricity,
- 2:23Speaker 1: everything is in short supply. Melania Trump says the agreement
- 2:27Speaker 1: will allow these civilian representatives from both countries, Russia and Ukraine,
- 2:32Speaker 1: to come in and assess the residents' need. And if
- 2:34Speaker 1: they need to, get them back to where they want
- 2:37Speaker 1: to go, whether it's Ukrainian territory or Russian-controlled territory, it's
- 2:42Speaker 1: going to be safe. Remember, the first lady previously worked
- 2:46Speaker 1: to reunite Ukrainian children who were displaced by the war
- 2:50Speaker 1: with their families. She worked with Russia. The White House
- 2:53Speaker 1: says that that effort helped establish a communications channel between
- 2:57Speaker 1: Russia and Ukrainian officials. It was used in this initiative.
- 3:02Speaker 1: So that, working with the kids, has helped her to
- 3:06Speaker 1: work on a ceasefire in this city. So she has
- 3:10Speaker 1: a unique upbringing that we don't talk about enough. Melania
- 3:13Speaker 1: grew up in Slovenia when it was a part of
- 3:16Speaker 1: communist Yugoslavia. Slovenia became an independent country in 1991. Melania
- 3:22Speaker 1: moved to the United States in 1996, so most of
- 3:25Speaker 1: her upbringing was in a communist country. And perhaps it's
- 3:29Speaker 1: that upbringing that makes her uniquely qualified to broker this
- 3:33Speaker 1: type of diplomatic deal. And I'm just sitting here thinking,
- 3:36Speaker 1: what if this were a Democrat first lady? how much
- 3:39Speaker 1: would we be, everybody would be talking about how amazing
- 3:42Speaker 1: this is. They would, first of all, be talking about
- 3:44Speaker 1: how amazing it is that she is an immigrant, that
- 3:47Speaker 1: she speaks multiple languages. She's able to work with the
- 3:50Speaker 1: Putin government. She's reuniting children with their families. I mean,
- 3:55Speaker 1: people would be talking about it. Hillary Clinton, what did
- 4:00Speaker 1: she do? I mean, she went on to be secretary
- 4:02Speaker 1: of state and said, At this point, what does it
- 4:05Speaker 1: matter anyway when talking about Benghazi? I mean, she was
- 4:09Speaker 1: not solving things, sadly. She should have been. Melania Trump
- 4:13Speaker 1: doesn't have to be. But I think she has a
- 4:15Speaker 1: heart of gold. And I think she doesn't get enough credit. Like,
- 4:18Speaker 1: I see the way she acts with children and interacts
- 4:21Speaker 1: with children when they come to the White House. And
- 4:24Speaker 1: it is truly maternal. You can see her love for kids.
- 4:28Speaker 1: You can see that she wants to help. So I
- 4:30Speaker 1: say what a blessing to have this deal done. And
- 4:34Speaker 1: to me, this is really big news today. But I
- 4:37Speaker 1: still want to go back to the data centers because
- 4:39Speaker 1: that's been big news this entire election cycle. So stick
- 4:43Speaker 1: around because we're going to get the lowdown on data
- 4:46Speaker 1: centers right after this. All right, today is the day
- 4:49Speaker 1: that we are going to be talking data centers. I
- 4:51Speaker 1: know you all are like, no, we hate data centers.
- 4:55Speaker 1: And that's become like a common discussion. And everybody who
- 5:01Speaker 1: listens to this podcast knows that I come from the
- 5:03Speaker 1: manufacturing world. So I do see this a little differently,
- 5:08Speaker 1: but I wanted to have an expert here. So we
- 5:10Speaker 1: have Mark Mills with us. He is the Executive Director
- 5:13Speaker 1: of the National Center for Energy Analytics. a distinguished senior
- 5:17Speaker 1: fellow at the Texas public policy foundation and a faculty
- 5:21Speaker 1: fellow at Northwestern university school of engineering. He also writes
- 5:24Speaker 1: for the city journal. So Mark, we have to know
- 5:27Speaker 1: this is like the next revolution in the, in this
- 5:30Speaker 1: country that you had the industrial revolution, the tech, the
- 5:33Speaker 1: technology revolution. This is like the next level and we're
- 5:36Speaker 1: all scared.
- 5:37Speaker 2: Yeah. Um, People, there's a lot of hype, but hype
- 5:44Speaker 2: comes around because when something is consequential, it creates hype.
- 5:48Speaker 2: So what we're seeing, I think, is an echo or
- 5:52Speaker 2: consequence of the fact that it is a big deal.
- 5:54Speaker 2: In fact, you did mention in your kind introduction that,
- 5:58Speaker 2: and of course I have to say this, I wrote
- 6:00Speaker 2: a book about exactly this subject called The Cloud Revolution.
- 6:04Speaker 2: And the book came out just before ChatGPT was released.
- 6:09Speaker 2: And my publisher did not want me to use the
- 6:10Speaker 2: words artificial intelligence on the book's title because he said,
- 6:14Speaker 2: nobody would know what you were talking about. It would
- 6:16Speaker 2: go on computer science bookshelves, you know, take it out.
- 6:19Speaker 2: So I did. Obviously, when you write about the cloud,
- 6:24Speaker 2: which is about data centers, I was writing a lot
- 6:26Speaker 2: about artificial intelligence. It's not a new phenomenon. We've been
- 6:29Speaker 2: using artificial intelligence in computing for decades. In fact, it's
- 6:35Speaker 2: not a new thing, nor are data centers. So maybe
- 6:37Speaker 2: it's helpful. to explain what a data center is, because
- 6:42Speaker 2: most people that I encounter in my life, and I've
- 6:45Speaker 2: been around data centers for a couple of decades, working
- 6:48Speaker 2: in the industry, it's associated with designing the power systems
- 6:51Speaker 2: for them. We're using a data center right now. Everybody
- 6:55Speaker 2: watching or listening to this is using a data center.
- 6:57Speaker 2: When you shop on one click with whatever, whether you
- 7:01Speaker 2: like Wayfair or Amazon, you're using a data center. When
- 7:03Speaker 2: you look at your health records, when you do social media,
- 7:08Speaker 2: most people will even still confess that they do. Whenever
- 7:13Speaker 2: you stream movies on Netflix or Amazon, you're using a
- 7:15Speaker 2: data center. The data center is a... In fact, it's
- 7:18Speaker 2: kind of funny. About a decade ago, Google came up
- 7:21Speaker 2: with a name for a data center. They called it
- 7:23Speaker 2: a warehouse scale computer. The name didn't stick. It's still
- 7:28Speaker 2: used in engineering circles. And they essentially were saying, in
- 7:31Speaker 2: order to do all these things, Google search, shopping online, well,
- 7:36Speaker 2: what's happening? I mean, what When you're doing this, when
- 7:39Speaker 2: you click your phone and go, buy now, or I
- 7:43Speaker 2: like the color of this, what in fact is happening
- 7:46Speaker 2: where your phone is a radio, as most people know,
- 7:49Speaker 2: but I've forgotten, it's a radio. It's just like a
- 7:51Speaker 2: walkie talkie. The radio talks to a cell tower, that's
- 7:55Speaker 2: a radio, and connects to a data center. So the
- 7:58Speaker 2: things that you ask about or are looking at exist
- 8:02Speaker 2: in computers that do you know, what's called servers that
- 8:06Speaker 2: send information out, collect information, keep the data processed. That's
- 8:10Speaker 2: where all, where you do a mapping, when you're trying
- 8:12Speaker 2: to use any kind of mapping program, all the analytics
- 8:16Speaker 2: are in computers somewhere in a data center. But the
- 8:19Speaker 2: more people use it, like this is a, falls into
- 8:23Speaker 2: the technical term of no duh. If you, millions and
- 8:26Speaker 2: millions of people using the data that they want constantly,
- 8:32Speaker 2: it takes a lot of computers. And they have to
- 8:34Speaker 2: be somewhere. Well, they're not in your backyard. They're not
- 8:37Speaker 2: in your car. Cars can contain computers, of course, but
- 8:40Speaker 2: they're tiny ones. This involves massive use of computation. And
- 8:44Speaker 2: they exist in these big buildings, warehouse scale, their size
- 8:48Speaker 2: of warehouses, their size of a Walmart, size of shopping malls.
- 8:51Speaker 2: They're big buildings, just jammed full of computers and communications
- 8:56Speaker 2: and memory storage equipment to do all the stuff we
- 8:59Speaker 2: take for granted. That's part of our commerce. You know,
- 9:01Speaker 2: a lot of people, heck, I think it's now about
- 9:04Speaker 2: a third of the population of the United States, has
- 9:07Speaker 2: never lived in a time without data centers. I just think,
- 9:11Speaker 2: you know.
- 9:11Speaker 1: Yeah, you know, I think about, I had a cell
- 9:14Speaker 1: phone that I dropped in a lake and that was it.
- 9:17Speaker 1: That was the last time I was ever gonna see
- 9:18Speaker 1: that cell phone. And I remember thinking, I've lost everything.
- 9:21Speaker 1: And I went to the store and they gave me
- 9:23Speaker 1: a new cell phone and it was exactly the same.
- 9:25Speaker 1: I opened it up. It was the exact same. So
- 9:27Speaker 1: my information obviously is not in my phone. It's someplace else.
- 9:32Speaker 1: So that when I lose my phone and I go
- 9:35Speaker 1: get a new one and I just am so happy
- 9:37Speaker 1: that it's all exactly the same, it was stored somewhere.
- 9:41Speaker 2: Well, and there is some information that can live in
- 9:43Speaker 2: your phone, some private security things that Apple is particularly
- 9:46Speaker 2: good at that. But The stuff you're talking about, text, emails, pictures,
- 9:50Speaker 2: all lives in the, quote, cloud. It caused a funny word.
- 9:52Speaker 2: I titled my book The Cloud Revolution because that's what
- 9:57Speaker 2: it's called because it's sort of remote. and big. Clouds
- 10:01Speaker 2: are big, they're remote. And so I think engineers come
- 10:04Speaker 2: up with terms to explain architectures, and that's different than
- 10:08Speaker 2: having a computer on your desktop. And your desktop computer
- 10:11Speaker 2: stores lots of stuff in the hard drive or whatever,
- 10:14Speaker 2: or flash drives. But if you're smart, you're backing it
- 10:18Speaker 2: up protecting it in the cloud. And in the cloud,
- 10:22Speaker 2: it's not stored in just one data center. It's redundantly
- 10:25Speaker 2: stored in usually two or three. So if something happens,
- 10:28Speaker 2: if there's an accident, thing goes on fire, or, you know,
- 10:32Speaker 2: an earthquake, something happens, you have your data. So that's
- 10:36Speaker 2: the predicate, right? There's been data centers for a long time.
- 10:38Speaker 2: We've had, there's thousands of data centers in the United
- 10:40Speaker 2: States before ChatGPT came on the scene.
- 10:45Speaker 1: So, but here's an issue. People hear about data centers
- 10:48Speaker 1: coming to their town. They freak out.
- 10:50Speaker 2: They're loud.
- 10:51Speaker 1: They use a lot of water. They use a lot
- 10:53Speaker 1: of energy. They're huge facilities with not that many jobs.
- 10:57Speaker 1: So how do you respond to that?
- 11:01Speaker 2: Well, first, one other thing. There is a distinction with
- 11:04Speaker 2: a difference now with AI. AI, because to do things
- 11:08Speaker 2: that we think will be useful and in many cases
- 11:11Speaker 2: already are useful, Artificial intelligence is extremely computer intensive in
- 11:16Speaker 2: the same way that, I guess the easiest way to
- 11:19Speaker 2: be analogized is if you want to do something that
- 11:22Speaker 2: doesn't use a lot of energy when you transport humans,
- 11:25Speaker 2: you could take a train or bus. If you want
- 11:27Speaker 2: to go there faster, if you want something more, you
- 11:30Speaker 2: take an airplane. Sure, it uses more energy. Speed and
- 11:34Speaker 2: all those features in the physics of the world we
- 11:36Speaker 2: live in require more energy. AI to do inference and
- 11:40Speaker 2: all these magical things just uses more energy. So the
- 11:42Speaker 2: data sets are bigger and use more energy. And that's
- 11:44Speaker 2: what's triggered this reaction. They're really big. So what do
- 11:48Speaker 2: I say when it comes next? Well, first of all,
- 11:51Speaker 2: let's just dispose of the three big tropes, right? Uses
- 11:54Speaker 2: too much energy, uses too much water, uses too much land,
- 11:59Speaker 2: or maybe the four tropes. It's noisy. So it's really easy.
- 12:02Speaker 2: First of all, building anything that's big is noisy. So
- 12:06Speaker 2: let's just stipulate, and it's perfectly reasonable to object to
- 12:09Speaker 2: big construction projects in your neighborhood. This is true whether
- 12:13Speaker 2: it's a steel mill or a shopping mall or a warehouse,
- 12:16Speaker 2: but that's not unique about data centers. Once they're built
- 12:19Speaker 2: and running, they're not noisy. The noisy part of a
- 12:22Speaker 2: data center is the same thing as a noisy part
- 12:25Speaker 2: of any town or city. The electrical substation can make
- 12:31Speaker 2: a hum if you're near it, but that's true for
- 12:33Speaker 2: all substations, for everything that we have in our society.
- 12:36Speaker 2: So you have sighting issues. Where will I put that?
- 12:38Speaker 2: But otherwise, the building has cooling fans on it that
- 12:41Speaker 2: are no different than cooling fans on skyscrapers or shopping malls.
- 12:46Speaker 2: They're just fans that move air. So the noise thing
- 12:50Speaker 2: is a canard. The water thing is also equally silly. Yes,
- 12:54Speaker 2: they use water to cool things. Of course, anything that
- 12:57Speaker 2: produces heat has to be cooled with water. But at
- 13:00Speaker 2: the high level, they don't have to net use water.
- 13:03Speaker 2: They can do what's called closed-loop cooling. It's what your
- 13:05Speaker 2: car does.
- 13:06Speaker 1: Is that a newer thing?
- 13:08Speaker 2: No, they've been around for a long time. What happens
- 13:10Speaker 2: is in the permitting, if you go to an area
- 13:12Speaker 2: to build something and you need cooling water, whether it's
- 13:14Speaker 2: a factory or a data center or a power plant,
- 13:17Speaker 2: you would ideally locate it where there's plenty of water
- 13:21Speaker 2: and you could do what's called once-through cooling because there's
- 13:23Speaker 2: lots of water. That's true in lots of the country.
- 13:25Speaker 2: If you go to a water-stressed area, you build closed-loop cooling. No.
- 13:28Speaker 2: just recycles the water. And like your car does as
- 13:32Speaker 2: a radiator, you have radiators that cool the water and
- 13:34Speaker 2: reuse it. That's not new. And in fact, in most
- 13:36Speaker 2: regions that are water-stressed, closed-loop cooling is required and used.
- 13:40Speaker 2: But if you count all the water used for those
- 13:42Speaker 2: that don't have closed-loop cooling, golf courses alone use 30
- 13:46Speaker 2: times more water than data centers, even if we build
- 13:49Speaker 2: all the data centers we plan. And the biggest use
- 13:52Speaker 2: for water is agriculture, not industry, to grow food. If
- 13:56Speaker 2: you really were worried about water, the people who are
- 13:58Speaker 2: worried about water, they ought to be opposing ethanol mandates
- 14:02Speaker 2: for gasoline. It takes about 200 times more water per
- 14:07Speaker 2: gallon of ethanol compared to a gallon of gasoline to
- 14:10Speaker 2: make the fuel. So if we really wanted to save water,
- 14:13Speaker 2: we'd oppose that. So, you know, there's something political here
- 14:16Speaker 2: going on.
- 14:17Speaker 1: But does the water get contaminated? Is there any risk
- 14:20Speaker 1: of any environmental risk from this water?
- 14:23Speaker 2: The water is, first, if it's closed loop. It's in
- 14:26Speaker 2: a loop, so it's not going anywhere. If it's open loop,
- 14:29Speaker 2: you're not using the water to do an industrial process.
- 14:34Speaker 2: It's a computer like you, it doesn't look like the
- 14:36Speaker 2: computer on your desk, but if you ripped open the
- 14:38Speaker 2: computer that you have, looked at the boards, those boards
- 14:41Speaker 2: are stacked in racks that look like a refrigerator-sized rack.
- 14:44Speaker 2: And then you could cool them with water cooling, but
- 14:47Speaker 2: it's not running through chemicals or a chemical process. So
- 14:50Speaker 2: it's not a contamination issue. On land use, if we
- 14:53Speaker 2: talk about the size of these buildings, just as, again,
- 14:56Speaker 2: a calibration point, they are big buildings. But even if
- 14:59Speaker 2: we build all the data centers that are planned, there's
- 15:02Speaker 2: 100 times more square footage in warehouses alone in the
- 15:05Speaker 2: United States, 100 times more. Warehouses are big, too. That's
- 15:09Speaker 2: why it's called a warehouse-scale computer. They're the size of
- 15:11Speaker 2: a warehouse. But there's 100 times more square footage in
- 15:14Speaker 2: warehouses nationally than we'll ever build in data centers if
- 15:18Speaker 2: they're all built as planned. So that doesn't hold up.
- 15:21Speaker 2: And then the claim, oh, they use too much power.
- 15:24Speaker 2: It is true. They use lots of power. It's absolutely true.
- 15:28Speaker 2: Too much is a qualitative thing. If you look at
- 15:32Speaker 2: the data, first of all, where data centers have already
- 15:35Speaker 2: been built and try to correlate that with electric rates
- 15:39Speaker 2: for people who live in those areas, you'll find out
- 15:41Speaker 2: there's either no correlation, in fact, or where there are
- 15:45Speaker 2: more data centers, electric rates have actually been moderated or decreased.
- 15:49Speaker 2: What the honest people are saying is if we power
- 15:53Speaker 2: these data centers with public power requiring the public to
- 15:58Speaker 2: pay for the power plants, then citizens will be paying
- 16:01Speaker 2: for the power for those data centers. That's true. But
- 16:03Speaker 2: that's not happening. It's not going to happen. No politician
- 16:06Speaker 2: is going to let that happen. No utility is going
- 16:09Speaker 2: to let that happen. So it's another canard. It's, in fact,
- 16:12Speaker 2: not true.
- 16:13Speaker 1: So then they have their own substation.
- 16:16Speaker 2: Well, if it's connected to the grid, they have their
- 16:18Speaker 2: own substation, which is a means to connect, whether it's
- 16:22Speaker 2: a steel mill or a data center, to the grid.
- 16:24Speaker 2: Those are the ways to convert the high voltage into
- 16:27Speaker 2: the lower power that's needed for a manufacturing facility. The
- 16:32Speaker 2: key issue is the data center operators need to pay
- 16:36Speaker 2: for the full costs of the power they use. And
- 16:38Speaker 2: they have two ways to do that. They can build
- 16:40Speaker 2: their own power plant entirely and not connect it to
- 16:43Speaker 2: the grid. And that's happening. A third or fourth of
- 16:47Speaker 2: all planned data centers are private grids. And this is
- 16:50Speaker 2: not a new phenomenon in the industrial world, as you
- 16:53Speaker 2: know from your family's history. Or they negotiate with the utility,
- 16:58Speaker 2: which they'd rather do because they don't want to be
- 17:00Speaker 2: in the power plant business. If the utility has enough
- 17:03Speaker 2: power or can build it quickly enough, the data center
- 17:07Speaker 2: operator would frequently prefer that. But the negotiation evolves. The
- 17:12Speaker 2: operator of the data center to pay the entire costs,
- 17:16Speaker 2: not just of the power plants, but the extra transmission,
- 17:19Speaker 2: the control systems, everything. And this has already happened in
- 17:22Speaker 2: a number of regions. Georgia recently, for example, negotiated with Anthropic,
- 17:26Speaker 2: put a massive data center campus in, in an industrial site.
- 17:30Speaker 2: It's already an industrial site near the harbor of Savannah.
- 17:33Speaker 2: So a big industrial site, they want to put more
- 17:36Speaker 2: big industrial buildings on an existing industrial site. Sounds like
- 17:39Speaker 2: a good plan, right? And they negotiated with Georgia Power,
- 17:42Speaker 2: to pay for 100% of the costs and the future
- 17:45Speaker 2: costs and bonded it too. I mean, the utility can say,
- 17:48Speaker 2: we'll do it for you if they're capable, but you
- 17:50Speaker 2: got to pay the future costs, the decommissioning costs. I mean,
- 17:54Speaker 2: these are the kind of negotiations that are in fact
- 17:55Speaker 2: going on in the real world.
- 17:57Speaker 1: So this is what, from a Michigan standpoint, and I
- 18:01Speaker 1: think in most states is probably the same, There's been
- 18:05Speaker 1: a lot of complaint that these data centers have gone
- 18:08Speaker 1: into rural areas, but you're making an interesting point. I mean,
- 18:12Speaker 1: in Flint, we have plenty of open factories that are
- 18:15Speaker 1: no longer running manufacturing. Why wouldn't the governor or somebody
- 18:20Speaker 1: in government here negotiate that these areas where we are
- 18:25Speaker 1: struggling with property taxes, we are struggling... And there is
- 18:29Speaker 1: a struggle for jobs. And I think there's a concern
- 18:33Speaker 1: that these don't bring a lot of jobs. But if
- 18:36Speaker 1: you are taking up this massive amount of space, you
- 18:38Speaker 1: are getting a massive amount of property taxes that could
- 18:42Speaker 1: go into schools, could go into after-school programs, could go
- 18:45Speaker 1: into job training programs. And I think that's where... You know,
- 18:49Speaker 1: we have, I'll say in this state, we have both
- 18:52Speaker 1: gubernatorial candidates calling a moratorium on data centers right now.
- 18:56Speaker 1: And it feels like, oh, gosh, could we be making
- 19:00Speaker 1: a mistake? Could Michigan be left behind in the areas
- 19:03Speaker 1: where we know we have manufacturing, you know, where we could?
- 19:07Speaker 1: And I'll say this, in those areas, companies have been
- 19:11Speaker 1: shy about coming to those areas because of the sins
- 19:14Speaker 1: of the past environmentally. And so I do think there
- 19:19Speaker 1: is a negotiation with the state to say we come
- 19:21Speaker 1: together and this area gets taken over. But how do
- 19:25Speaker 1: these data centers make money? I mean, I'm assuming this
- 19:28Speaker 1: is like renting space, but renting space for like is
- 19:32Speaker 1: Amazon pay? Are all of these companies renting space at
- 19:36Speaker 1: these data centers? Are they wealthy? Like, do they have
- 19:38Speaker 1: the money to pay this for a community?
- 19:41Speaker 2: Yeah.
- 19:41Speaker 1: Well, yeah.
- 19:43Speaker 2: Unsurprisingly, given your history and the world's politics and business,
- 19:47Speaker 2: you're spot on. I mean, in a sense, the question
- 19:50Speaker 2: answers itself that, you know, could you do this? Of
- 19:52Speaker 2: course you could do this. You should do that. And
- 19:54Speaker 2: are you risking abandoning some opportunity for citizens and tax rates?
- 19:59Speaker 2: Of course you are. We know where the data centers
- 20:01Speaker 2: already exist. Those counties have far lower tax rates by
- 20:05Speaker 2: 30 to 40 percent. So the economic benefits to the
- 20:08Speaker 2: county are where data centers locate when they pay their taxes,
- 20:12Speaker 2: are enormous, not trivial, they're enormous. And in fact, I've proposed,
- 20:17Speaker 2: and some data center operators are doing this, that they
- 20:20Speaker 2: could front load their taxes. They say, look, go to
- 20:22Speaker 2: the community and say, when we start construction, we'll prepay
- 20:25Speaker 2: our tax for the next year, once we have our permit,
- 20:28Speaker 2: so that you can benefit immediately from the annoyance that
- 20:31Speaker 2: we're creating in the construction. That's the principal annoyance. So
- 20:35Speaker 2: huge local benefits. So you'd say, well, but what else
- 20:38Speaker 2: do I get out of it? Well, remember, no net
- 20:40Speaker 2: user of water, bring your own power, pay for your
- 20:43Speaker 2: own power. Does it create a huge quantity of jobs? Well, no,
- 20:47Speaker 2: of course not. It's not a huge job creator. It
- 20:50Speaker 2: is for the construction site, which is not nothing, right? Look,
- 20:53Speaker 2: what States fight over building highways for the jobs, okay?
- 20:59Speaker 2: We know this. Every state. And we all know that
- 21:02Speaker 2: when the highway's finished, the construction jobs are gone. Gee,
- 21:05Speaker 2: what a shock. Same thing for data centers. But they
- 21:08Speaker 2: fight over the highway jobs. And knowing that the highway itself,
- 21:13Speaker 2: what's the benefit of the highway? Because most people aren't
- 21:16Speaker 2: living locally that use interstate highways. They're transiting through. Well,
- 21:19Speaker 2: the benefit is a lot of people come off the highways.
- 21:22Speaker 2: You get local development for other things. It's true for
- 21:24Speaker 2: every construction project.
- 21:26Speaker 1: But in an area where a data center goes in
- 21:29Speaker 1: where there are not high property taxes being paid, then
- 21:32Speaker 1: those construction jobs, once the data center is set, there's
- 21:36Speaker 1: more road construction jobs because then you can finally pay
- 21:40Speaker 1: to fix the roads.
- 21:42Speaker 2: Exactly. In fact, you're absolutely right. And you say that
- 21:46Speaker 2: in half and jest, but it's really true. What happens
- 21:49Speaker 2: once you generate the wealth is that you'll rebuild the schools.
- 21:52Speaker 2: You'll rebuild not just roads, but the whole infrastructure and
- 21:56Speaker 2: many data center operators are helping rebuild the local water systems.
- 21:59Speaker 2: So they say, if you think we're stressing it, we're
- 22:02Speaker 2: really good at water management because they're engineers. Let's look
- 22:05Speaker 2: at your water facility and we'll need to upgrade it.
- 22:07Speaker 2: We'll pay to upgrade it. And those create jobs. But
- 22:11Speaker 2: the more important part, of course, is that the jobs
- 22:12Speaker 2: that it does create, and it does create jobs, permanent jobs,
- 22:16Speaker 2: in the hundreds, not thousands. But in a rural community,
- 22:19Speaker 2: you put 100 high-paying jobs into a rural community, is
- 22:24Speaker 2: everybody knows, you don't have to be an economist to
- 22:26Speaker 2: know this, the spillover effect of that is five to
- 22:29Speaker 2: 10 to one. It creates hundreds and hundreds of other
- 22:32Speaker 2: jobs that are in the economic ecosystem that all manufacturing.
- 22:38Speaker 2: Jensen Wang, the founder and CEO of NVIDIA, is trying
- 22:42Speaker 2: to get data centers that use AI called AI factories.
- 22:46Speaker 2: That's the word he likes to use. They're AI factories.
- 22:49Speaker 2: It's not a bad word because People are generally more
- 22:52Speaker 2: comfortable with factories because we have a lot more history
- 22:54Speaker 2: with them. He's technically correct. What AI does is it
- 22:58Speaker 2: takes raw material, which is data, and repackages it into
- 23:02Speaker 2: a high-value thing, assembles it electronically. But we do a
- 23:06Speaker 2: lot of electronic assembling in other areas to fabricate something.
- 23:10Speaker 2: So the notion that they don't produce something of value
- 23:14Speaker 2: is wrong. You ask something really important. Do they have
- 23:17Speaker 2: the money to do this? Well, we know they do.
- 23:19Speaker 2: Because some of the wealthiest companies on the planet are
- 23:23Speaker 2: the companies that are building data centers. So the data
- 23:26Speaker 2: center itself, the building, can be operated in sort of
- 23:30Speaker 2: one of three ways. It can be owned and built by, say, Meta, Google, Amazon, right,
- 23:36Speaker 2: the big hyperscalers. You know, Amazon has its own massive
- 23:39Speaker 2: network of data centers that do initially shopping and now
- 23:42Speaker 2: everything else, you know, Prime Movies. Then you also have
- 23:46Speaker 2: a merchant, just like in any real estate business. You
- 23:50Speaker 2: have real estate investment trusts that build data centers and
- 23:53Speaker 2: they rent out the space just like a shopping mall.
- 23:56Speaker 2: The cages are called because they're just bays inside. It'd
- 23:59Speaker 2: be just like a shopping mall. There's Nordstrom's here and
- 24:03Speaker 2: Chipotle there. You do the exact same thing. In fact,
- 24:06Speaker 2: for Nordstrom, Nordstrom's online shopping lives in a cage in
- 24:09Speaker 2: a data center somewhere. So does Chipotle's back office finance operations.
- 24:14Speaker 2: They live in a data center somewhere. So those kinds
- 24:18Speaker 2: of businesses rent out the space and they typically pre-lease
- 24:22Speaker 2: the space before they build the data center. So they're
- 24:25Speaker 2: not taking a gamble. And then there's the third kind,
- 24:28Speaker 2: we'll call them the speculators. And this is true in
- 24:30Speaker 2: any kind of real estate. They build the site on spec, right?
- 24:34Speaker 2: But they typically wouldn't build a data center. It's guts
- 24:39Speaker 2: on spec to be like, again, a shopping mall. Let's
- 24:41Speaker 2: say you're a developer and you've got some investors and
- 24:44Speaker 2: you acquire the land, you get all your permits and
- 24:46Speaker 2: you'll develop the land, bring water in and power and
- 24:49Speaker 2: lights and start building the foundation. And then you, quote,
- 24:54Speaker 2: flip it to somebody else who wants to run a
- 24:58Speaker 2: shopping mall. So the data center world in real estate
- 25:01Speaker 2: terms look just like every other real estate world. The
- 25:04Speaker 2: biggest difference between the data center world and other real
- 25:06Speaker 2: estate is it's new and it's growing fast. And It
- 25:10Speaker 2: has all the characteristics of misinformation that airports had when
- 25:15Speaker 2: we started them. Airports are very annoying and noisy. They
- 25:18Speaker 2: had to deal with all of that when airports began.
- 25:20Speaker 2: Highways themselves, if you read your history, ask Gemini on
- 25:24Speaker 2: the Google thing, did people oppose roads and highways when
- 25:27Speaker 2: the dawn of the age of the automobile? You betcha.
- 25:31Speaker 2: Including today, right? We have a lot of debates about
- 25:34Speaker 2: where a road should go if you have to build
- 25:36Speaker 2: a new road because it has a negative impact on
- 25:38Speaker 2: communities and citizens.
- 25:40Speaker 1: I mean, I've worked at a steel foundry. I've worked
- 25:42Speaker 1: at a steel mill. And the steel mill is a
- 25:44Speaker 1: mill and a forge shop. I mean, those places are loud.
- 25:48Speaker 2: It is.
- 25:48Speaker 1: And there is always fear when there's something new coming.
- 25:52Speaker 1: But this, I don't know if it's social media. I
- 25:54Speaker 1: don't know what it is. It seems like there's such
- 25:57Speaker 1: a rapid... explosion of fear. And there has been rumor
- 26:02Speaker 1: that the Chinese are placing propaganda in the United States
- 26:05Speaker 1: to stop us from forward moving progress, which to me,
- 26:10Speaker 1: I mean, it sounds like it's a possibility. They certainly
- 26:13Speaker 1: wouldn't want us to get ahead of them in the
- 26:15Speaker 1: AI race. And that does scare me. Do you think
- 26:18Speaker 1: that could be true?
- 26:20Speaker 2: Well, sure, it could be true. And I think it
- 26:21Speaker 2: is true. But that doesn't imply that that people who
- 26:26Speaker 2: don't like data centers are Chinese dupes, right? I mean,
- 26:28Speaker 2: that doesn't imply that, obviously, because you might hold an
- 26:31Speaker 2: opinion and you don't like it for all kinds of reasons.
- 26:36Speaker 2: And some of the reasons for the opposition to data centers,
- 26:38Speaker 2: as you know, is that people are unhappy about, say,
- 26:41Speaker 2: social media, or they just dislike, to use Senator Sanders' words,
- 26:44Speaker 2: the tech oligarchs. They just dislike them. Or they're afraid
- 26:48Speaker 2: of AI taking their jobs, and the data center sort
- 26:51Speaker 2: of epitomizes the target. Because, I mean, how do you oppose...
- 26:55Speaker 2: AI taking your job, well, you could oppose a data center.
- 26:59Speaker 2: You know, you might guess I'm in the camp that
- 27:01Speaker 2: says AI creates jobs, but it also takes jobs. It
- 27:05Speaker 2: is disruptive. It's not nothing to disrupt the workforce and
- 27:10Speaker 2: the marketplace. But I think your question about our geopolitical
- 27:15Speaker 2: enemies is well-placed and exposes something that people would be
- 27:20Speaker 2: profoundly naive not to believe. Russian adversaries, Iranian adversaries, North Koreans,
- 27:27Speaker 2: Chinese have always meddled in our politics. We have plenty
- 27:32Speaker 2: of evidence of that. They've always meddled, especially in the
- 27:35Speaker 2: last two decades, in social media to excite people. We
- 27:39Speaker 2: have hard data. Congress has done investigations like this before.
- 27:43Speaker 2: We have hard data, not just of them hacking our
- 27:46Speaker 2: institutions to cause damage, but also to promote dissension in
- 27:51Speaker 2: political campaigns. It would be obviously in their interest to
- 27:55Speaker 2: slow us down in the data center world. But that, again,
- 27:58Speaker 2: and while it would accelerate, it's like throwing gasoline on
- 28:02Speaker 2: the fire. I don't know the answer to sort of
- 28:07Speaker 2: who lit the match and to get everybody wound up
- 28:10Speaker 2: about data centers because it's happened so fast. Color me
- 28:14Speaker 2: cynical that it's pure grassroots, and this is what they
- 28:17Speaker 2: call in politics, astroturfing. And then it's become hugely political.
- 28:24Speaker 2: And every Republican to run away from this being an
- 28:29Speaker 2: issue that they're fighting to get reelected on in the
- 28:31Speaker 2: midterms is a genuflecting to the same anti-data center moratorium
- 28:36Speaker 2: mentality that all the Democrats are doing. Because they essentially
- 28:39Speaker 2: want to take it off the table as a debate.
- 28:41Speaker 2: Because no one, I think, in effect, doesn't want to defend,
- 28:44Speaker 2: let's say, meta and social media. Or they don't want
- 28:47Speaker 2: to defend job losses from AI. So you take it
- 28:50Speaker 2: off the table by saying, oh, we should be careful too.
- 28:53Speaker 2: We'll go slow to be safe. It's kind of a
- 28:56Speaker 2: coward's way out. I mean, I recognize politics is not
- 29:00Speaker 2: always full of people that are brave.
- 29:02Speaker 1: There's always the, if you're explaining, you're losing. And because
- 29:05Speaker 1: people don't understand data centers, there's that feeling that you
- 29:09Speaker 1: have to explain them. I think you brought up a
- 29:11Speaker 1: great point of 200 high paying jobs in a community
- 29:15Speaker 1: like mine would be incredibly significant. And I say that
- 29:18Speaker 1: because that changes grocery stores, that changes restaurants, that changes
- 29:22Speaker 1: so much of the the dynamic of what the town
- 29:25Speaker 1: is like. And I will tell you, my own experience
- 29:27Speaker 1: is that our factory was really driven off the lakeshore
- 29:32Speaker 1: and put out of business. But it was at the
- 29:34Speaker 1: same time as there are probably at the same time,
- 29:37Speaker 1: five factories around the lake here in Mitel. The county
- 29:41Speaker 1: just drove them out. I mean, they just closed one
- 29:44Speaker 1: after another, one after another, after another. And they had
- 29:46Speaker 1: this whole like watch our town go theme. And they
- 29:50Speaker 1: were going to make this town into a tourist attraction.
- 29:53Speaker 1: And what they have found out is that when you
- 29:55Speaker 1: don't have wealth in a town, nobody wants to come visit.
- 29:58Speaker 1: You can't even get a chain restaurant to come because
- 30:03Speaker 1: they're like, the median income here is not high enough
- 30:07Speaker 1: for us to bring our chain restaurant here.
- 30:08Speaker 2: Right.
- 30:09Speaker 1: So the roads are suffering. The community is suffering. And
- 30:12Speaker 1: that's my point when I've seen it firsthand. And I
- 30:15Speaker 1: think this is the hard thing to explain on the
- 30:18Speaker 1: campaign trail. But when you go from community to community
- 30:21Speaker 1: and you go into a place where they've got potholes
- 30:24Speaker 1: that you could actually build a home inside of and
- 30:27Speaker 1: you say this could change. This could change. This old
- 30:31Speaker 1: factory here that is sitting empty and has been for
- 30:35Speaker 1: 10 years could be buzzing with activity that would end
- 30:38Speaker 1: up giving your kids an after-school program, giving your kids
- 30:42Speaker 1: a tech school. It's a discussion that has to be had,
- 30:47Speaker 1: but I think people are afraid or they don't understand
- 30:49Speaker 1: enough about how to explain it.
- 30:51Speaker 2: So Anthropic and OpenAI should be hiring you. No, you're
- 30:57Speaker 2: exactly right. And not to trivialize it, I think what
- 31:00Speaker 2: will happen and is already happening is what are called
- 31:03Speaker 2: brownfield industrial sites that had industrial facilities before. That's what
- 31:10Speaker 2: happened in Georgia. It's happening around the country. In some cases,
- 31:13Speaker 2: you have to build in a greenfield site for practical reasons,
- 31:17Speaker 2: either velocity or permits or where the fiber is and power,
- 31:21Speaker 2: all kinds of issues. But where you are in particular,
- 31:25Speaker 2: and the so-called odiously named Rust Belt, but the former
- 31:30Speaker 2: industrial heart of the country, it's still significant industrial activity,
- 31:35Speaker 2: as you know, particularly in Ohio and Pennsylvania, because of
- 31:39Speaker 2: their good fortune of being on top of the big
- 31:42Speaker 2: shale fields. But that's spilled over into overall broad economic
- 31:46Speaker 2: growth because the number of people actually work in the
- 31:49Speaker 2: oil and gas industry is small compared to the number
- 31:51Speaker 2: of jobs that are created by their wealth. So you
- 31:55Speaker 2: take old industrial sites, which already have power lines to them,
- 31:58Speaker 2: steel mills to your point, Use a lot of power.
- 32:01Speaker 2: So you already have infrastructure. They take water and they
- 32:04Speaker 2: take roads and they take all the kinds of things
- 32:07Speaker 2: that data centers need. I think what probably will happen,
- 32:10Speaker 2: and this is what should happen, the data center businesses
- 32:16Speaker 2: that are facing all this unhappiness are learning quickly that
- 32:21Speaker 2: what they have to do is be better explainers and
- 32:23Speaker 2: better citizens rather than just coming in and plowing and
- 32:27Speaker 2: doing things under secret agreements. And remember, a lot of
- 32:29Speaker 2: the secret agreements are not because they're hiding anything. It's
- 32:31Speaker 2: because they are from you or the citizens are hiding
- 32:33Speaker 2: it from their competitors who they don't want to know
- 32:35Speaker 2: how fast they're doing or what they're doing and where.
- 32:38Speaker 2: That's part of it. But they'll have to be more open.
- 32:40Speaker 2: And they're starting. And the other thing you could do
- 32:43Speaker 2: is to essentially run auctions. I mean, if you want
- 32:46Speaker 2: to say to six communities and you could identify where
- 32:50Speaker 2: you'd want to build a data center that will generate
- 32:53Speaker 2: hundreds of millions of dollars of free money for the
- 32:55Speaker 2: local county and jobs, say, well, we want to go any,
- 32:59Speaker 2: if I'm the company, I want to go any one
- 33:01Speaker 2: of these five or six places. And you all let
- 33:03Speaker 2: me know if you want me to come there. And
- 33:05Speaker 2: if you can help me get my permits and, you know,
- 33:07Speaker 2: we'll be transparent and open, you know, run an auction.
- 33:10Speaker 2: That's starting to happen. You know, versions of that are
- 33:13Speaker 2: starting to happen. But mostly it's very old fashioned. It's
- 33:17Speaker 2: a very new technology with an old fashioned problem. It's big,
- 33:21Speaker 2: it's new, it's disruptive in the way all big industries are.
- 33:25Speaker 2: And the industries that are doing it In this case,
- 33:28Speaker 2: we're naive, I think, about public reaction. And of course,
- 33:33Speaker 2: our enemies, both political and foreign, take advantage of naivete
- 33:37Speaker 2: every time it happens.
- 33:39Speaker 1: Yeah, I've watched this from the outside and I've just
- 33:42Speaker 1: thought so many times, there is such an opportunity to
- 33:45Speaker 1: flip this narrative and explain that for all of the
- 33:50Speaker 1: politicians out there that are saying, we're going to find
- 33:52Speaker 1: ways to increase revenue. And we know what that means.
- 33:56Speaker 1: This is actually a way to increase revenue without taking
- 33:59Speaker 1: it from the people. You know, there is there are
- 34:01Speaker 1: ways to increase revenue when you are not affecting you're
- 34:05Speaker 1: actually benefiting the people of the community. But it's hard
- 34:08Speaker 1: to get that across. I do think we need to
- 34:09Speaker 1: have more people out explaining it. So I appreciate what
- 34:12Speaker 1: you've been able to do today.
- 34:14Speaker 2: Thanks for having me on, and good luck getting a
- 34:16Speaker 2: data center in your backyard. I hope that happens. Yeah.
- 34:20Speaker 1: I don't know if that's going to happen under either
- 34:23Speaker 1: administration that could come into Michigan, but I do think
- 34:26Speaker 1: that there's definitely the room for that conversation. I think
- 34:29Speaker 1: there are great, great places in Michigan that could benefit
- 34:33Speaker 1: immensely from something like this, and it's a hard discussion
- 34:36Speaker 1: to have, but I think the discussion needs to be had. So,
- 34:38Speaker 1: Mark Mills, I appreciate you having the discussion with me
- 34:41Speaker 1: today on the podcast. Please stay tuned. We'll be right
- 34:43Speaker 1: back after this. Thank you for tuning in today. Make
- 34:47Speaker 1: sure you come back on Wednesday to learn about Stand
- 34:50Speaker 1: Up Sunday. I think we all feel beaten down by
- 34:53Speaker 1: division and the division of this election season. But we're
- 34:57Speaker 1: going to talk with Karen Schreier Dressback. She is with
- 35:01Speaker 1: the Appeal of Conscience Foundation. So on Wednesday, we're going
- 35:05Speaker 1: to have her here and we're going to find out
- 35:07Speaker 1: what they're doing to protect people of faith, to protect faith,
- 35:11Speaker 1: but also unite people of faith. And it's interesting because
- 35:15Speaker 1: regardless of their faith, they're standing together to defend our rights.
- 35:19Speaker 1: I'm telling you, she is a truly inspirational person. So
- 35:23Speaker 1: I will see you back here on Wednesday to lift
- 35:25Speaker 1: your spirits. I'm so grateful for you for your tuning
- 35:29Speaker 1: in today. I want to make sure you share and
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- 35:51Speaker 1: Tudor Dixon podcast and have a blessed day. Thank you.