{"text":[[{"start":7.44,"text":"Are data centres becoming the new fracking? It’s a question I first saw posed in a Strategas research report back in February. Since then, growing AI backlash makes me think the answer is yes. While Amazon, Meta, Alphabet, Microsoft and others are expected to spend around $700bn building out data centres in North America this year, these “hyperscalers” are starting to face pushback about the implications of the technology. The economic and market consequences could be significant."}],[{"start":44.69,"text":"According to the Data Center Watch project, $156bn worth of AI data centre projects were stopped or stalled last year because of concerns about everything from rising electricity prices (data centres are massive electricity consumers) to water scarcity to tech-related job losses. Just as opposition to fracking led to “not in my backyard” concerns over environmental and health implications of the technology that stalled drilling, AI worries are now slowing the rollout of data centres."}],[{"start":81.47,"text":"A Jefferies report notes that 47 states had considered new legislation to regulate the technology as of mid-2025, and more than 30 had enacted new statutes ranging from whistleblower protections to requirements around power usage and safety."}],[{"start":99,"text":"It’s telling that after the failure of the Trump administration’s federal moratorium on state-level AI regulation last year, the White House is now trying to get in sync with public opinion. Americans are more negative about AI than the citizens of any other country polled, according to Pew, and so the administration is now requiring Big Tech firms to sign a “ratepayer protection pledge” that would theoretically keep electricity and other utility bills, which have risen in many places thanks to data centre growth, under control."}],[{"start":133.74,"text":"The pledge is voluntary. There are, as of now, no binding rules that force Big Tech to compensate the public for rising prices, strains to an already old and beleaguered grid system, or any other negative externalities from data centres, like higher noise levels or decreased air quality."}],[{"start":155.24,"text":"But as non-tech companies join the public in voicing concerns, that could change. The Louisiana Energy Users Group — which includes ExxonMobil, Chevron and major chemical manufacturers — has opposed what they view as preferential treatment for new data centres built by companies including Meta. Some big corporations (like Diamondback and Devon Energy) have even started building out their own power and utility infrastructure as a hedge against AI overconsumption of energy, something that will undoubtedly fuel public concerns about an AI electricity arms race."}],[{"start":191.84,"text":"It is no wonder Democrats are making AI pushback a big campaign issue in advance of the midterms. Populists like Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez have called for a moratorium on new data centres. And even corporate-friendly Democrats like Senator Mark Warner have pointed out that AI is more unpopular with Americans than the Immigration and Customs Enforcement (ICE) agency."}],[{"start":218.93,"text":"Warner, along with rightwing populist Republican Senator Josh Hawley, has introduced a bipartisan bill that would require major companies and federal agencies to report AI-related lay-offs and job changes to the Department of Labor. If Democrats take both the House and the Senate in the midterm elections, as some polling data indicates they will, I wouldn’t be surprised to see a more serious populist backlash around the technology."}],[{"start":249.47,"text":"This would, of course, force mainstream Republicans and the president into a corner. There have always been big tensions between vested interests in Silicon Valley (represented by the prominence of the tech titans at Trump’s second inauguration) and the Maga base, who would suffer from job losses and utility inflation. It might also give markets further pause about whether the hyperscalers can justify their share prices. Even as there is huge anticipation about the OpenAI initial public offering, it is telling that lenders seeking to back new data centre build-outs are having trouble getting insurance for the massive projects."}],[{"start":294.71,"text":"Tech companies looking to reassure the public, and investors, about their prospects might take a page out of the fracking handbook and do a better job of making their case about the upsides of data centres. Fifteen-odd years ago, energy companies looking to reassure the public about fracking launched PR campaigns touting the benefits of lower gas prices, high-paying petroleum industry jobs and the foreign policy advantages of domestic energy security. Had the efforts been unsuccessful, “US oil production would be one-third of what it is now”, according to Strategas."}],[{"start":331.96,"text":"Selling Americans on the benefits of AI will be ever more important given that at least some new centres, in order to avoid data latency — the time lag between a data request and response — will have to be built near big cities, which tend to have more rules and regulations around construction. It would behoove Big Tech to put aside its usual libertarian contempt for government and figure out ways to spread the potential benefits of AI to the public. In the short term, this might include investments in grid upgrades, workforce retraining and community benefit agreements in places where data centres are built."}],[{"start":374.25,"text":"Longer term, we may need a data dividend for the public that mirrors the sovereign wealth generated from fossil fuel revenues. If America is to win the AI race, the public will need to see what’s in it for them."}],[{"start":395.02,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1775459533_1669.mp3"}