Big tech scrambles to offer voters a new AI deal
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Illustration: Sarah Grillo/Axios
The AI industry is scrambling to repackage a $10 trillion infrastructure buildout to appease a hostile electorate that overwhelmingly voted to restrict data center construction in ballot measures across the country.
- It's not just changing the name of data centers to "compute campuses," but offering communities real money, including dividends, benefits for schools or cities, environmental concessions and labor protections.
Why it matters: Tuesday's election proved voters won't tolerate unchecked growth, although the market and many analysts see the blue wave slowing — but not stopping — data center construction around the U.S. To prevent an existential threat, the world's biggest companies are working on a rebrand.
- How well they execute on their promises will determine the pace of the global AI race.
What they're saying: Chris Lehane, OpenAI's chief global affairs officer, compared the turnaround AI must make to the 1996 election, which came shortly after Republicans routed Democrats in a historic midterm election.
- "A lot happens in two years," he told Axios in an interview. "Smart, talented folks take messages from voters and react and respond to them."
- Getting community buy-in for data centers will require "really making clear that these can be long-term, durable, economically transformative projects for communities," he said.
Driving the news: There's no question about how voters feel about data centers after Election Day, with restrictive measures across 10 states going 43-1 at the ballot box. The margins weren't close, with an average of 75% of people favoring restrictions.
- In Texas, a new Democratic governor has promised to keep a moratorium in place until the legislature passes comprehensive reforms.
- Candidates who won in other emerging data center states also favor similar restrictions. Analysts say about 60% of planned 2028 capacity across the U.S. faces a risk of delay.
Between the lines: Incoming Democrats aren't going to kill data centers. Virginia, run entirely by Democrats, is the biggest data center hub in the U.S. Unions are also among the buildout's biggest supporters. But many of the new crop of winning candidates have similar demands.
- Tech companies must pay for infrastructure and bring their own power, ensuring that new strains on the grid from the boom won't hit ratepayers.
- Tax breaks are dead and face repeal, and the companies will have to show that they will ensure environmental and labor protections. Voters also won't tolerate any more nondisclosure agreements or what look like secret deals.
What we're watching: Amazon, Google, Microsoft, OpenAI and other major data center developers began laying out a new vision for winning public approval before Tuesday's "AI earthquake."
- Many of their proposals already include efforts to meet these demands, including commitments to ensure data center developers cover their infrastructure and power costs.
- These concessions may make data centers more costly, but a slower pace could also make it easier to absorb higher costs.
Zoom in: Jobs won't be enough, since they are temporary. Look for more payments akin to the $50,000 teacher bonuses that followed the construction of a massive Meta data center in Louisiana.
- Amazon allocated $1 billion for investing in data center communities over five years, and Microsoft also has its "Datacenter Community Pledge."
- OpenAI on Thursday unveiled a "Compute Campus Policy Blueprint" and outlined tens of millions of dollars of commitments for free school lunches, parks, first responders and other priorities.
- Lehane added that renaming data centers to compute campuses—viewed as a gimmick by some policymakers and consumer advocates—was an intentional effort to "provoke that conversation."
Yes, but: It's far from clear whether Democrats who are poised to take control of powerful congressional committees in Washington will buy the talking points, and some new state leaders campaigned on the importance of binding agreements.
- A report last month from Sen. Elizabeth Warren (D-Mass.) found that major tech companies aren't covering the full infrastructure costs of their data centers, and companies continue seeking billions in tax breaks as well as using nondisclosure agreements.
The bottom line: Data center construction is set to slow, but it won't stop. The race is on to see whether Democrats can translate election momentum into binding restrictions or if the industry tries to head off tougher rules.
