What's behind America's data center revolt?

0:00Support for Here and Now Anytime comes from MathWorks, creator of MATLAB and Simulink software, to design and develop engineered systems, accelerating the pace of discovery in engineering and science. Learn more at mathworks.com. WBUR Podcasts, Boston. We actually look at data centers as catalysts that bring a multitude of benefits to the community. A recent Gallup poll found 7 in 10 Americans are against building AI data centers where they live. but some cities are open for business.

0:47It's Wednesday, July 15th, and this is Here and Now Anytime from NPR and WBUR. I'm Chris Bentley.

0:56Today on the show, how did data centers become the big bad in so many Americans' lives? And what's the way forward? We'll dig into the bipartisan backlash against data centers, which goes deeper than concerns about energy and water use. In some cases, it's related to being a proxy or like a totem for the rise of artificial intelligence and anxieties around that too. Those anxieties are an opportunity for politicians in this election year. Take New York's Democratic governor, who just became the first to institute a statewide moratorium on big data centers. This kind of stuff sells with left and center.

1:38So if you can't exactly, you know, talk about Gaza or talk about, you know, socialized subway or buses, you definitely could lean into something like this if you're hopeful. But first, what's it actually like when a data center comes to town? We're going to hear from two communities, one that's very much against data centers and another that's open to them. starting with a Philadelphia suburb. King of Prussia, Pennsylvania, is considering a data center campus spanning more than 4 million square feet. CBS News recorded this at a public planning meeting in Upper Marion Township back in May. We're not lying to the public.

2:17Folks, I'm not sure how many other ways to mention this. The Philadelphia Inquirer's Erin McCarthy was at that meeting. She's been covering the data center controversy in King of Prussia, and she told Peter O'Dowd one of the main concerns is pollution, both from noise and emissions from backup diesel generators. They're concerned about the noise, certainly, but I've also talked to residents who are concerned that these centers could potentially emit pollutants into the air. Some folks that I talked to said they were worried that their children could have physical and mental health repercussions of having to live next to a constant droning center.

3:00I see. Well, after the meeting, the Upper Marion Township's Board of Supervisors issued a statement, this was in June, saying that it plans to revise the current data center ordinance to strengthen some of the regulations that are already in place. Is it your sense that this project is dead or that some kind of compromise might happen? The project is certainly not dead. In fact, I talked with the township manager who mentioned that they have two additional meetings planned for the next couple of months. And if recent history is any indication, the developers behind this project are pretty tenacious.

3:32The data center ordinance that's currently on the books in Upper Marion actually does not apply to this project because the plans were submitted prior to the ordinance being finalized. So this is certainly not dead. The concerned residents are vocal, but there must be some supporters. Is there a way that the development might be good for the township? Certainly. I mean, there are folks that say that these developments could be kind of harbingers for other businesses to come into the township. And there are also union leaders and others who are hopeful about the job prospects. History shows that data centers don't employ a lot of full-time, long-term employees, but at least in the construction phase, this would lead to a large number of jobs in that area.

4:15Do you think that this controversy in King of Prussia sort of fits in nicely with the nationwide backlash against AI? I mean, are these themes all the same as far as you can tell? I believe so. And I've heard similar sentiments from other residents in other areas around Philadelphia. You know, a lot of the folks I talk to say that they use AI and they understand the benefits of AI, but they don't want these data centers in their neighborhoods. They think there are better places for them, perhaps places with fewer residents. Aaron McCarthy is a consumer reporter for the Philadelphia Inquirer. Aaron, thank you.

4:47Thank you. That was one community speaking out against a data center. How about a community that is open to opening its doors for business? Buckeye, Arizona is a fast-growing suburb of Phoenix. And Susie Boyles is the city's director of economic development. Susie, welcome. Nice to talk to you. Thank you for having me. Happy to be here. Yeah, so to be clear, you don't have a data center under construction right now. But Buckeye, I think, can tell that it's possible in the future. And there are a few sites in town where you think a data center could go. What kind of benefit do you think data centers could bring to Buckeye?

5:21Yeah, sure. Absolutely. So these data centers, they do represent hundreds of millions of dollars in private investments and generate ongoing tax revenue. So that's one of the benefits. We focus on data centers bringing and advancing regional infrastructure, roadway improvements, public safety facilities, water and sewer infrastructure, as well as utility investment that really serve as a catalyst for a much larger acreage around a data center, not just for the data center themselves. I see. And I think it's important for folks who aren't familiar with Buckeye. This is a city that's growing really fast and you're kind of a blank slate.

5:57You have hundreds of square miles of desert to move into on the outskirts of Phoenix. So a lot of this stuff you don't have yet. Correct. Absolutely. And that's actually one of the benefits to why we believe Buckeye's data center strategy is so proactive. We are 640 square miles. And today we're only about 16 % built out. The city of Buckeye really has the opportunity to place these employment nodes in the right location in the community. So you're saying they wouldn't be near houses, but those houses that haven't been built yet, that may someday be built, will need water. And that is a big deal.

6:32So I see that Buckeye is primarily on groundwater with some water from the Colorado River, which, by the way, is under extreme stress. And there are people who are concerned that a resource like groundwater or the Colorado River can't easily be replaced. So how do you build a data center without draining your aquifers? That's a great question. And we do get that question quite often. And so these new facilities, they're increasingly using closed loop systems, air cooled systems or a hybrid cooling technology that really dramatically reduces the water consumption that a traditional or older data center would look at.

7:07And so most data centers that are coming to Arizona, let alone in Buckeye, we want them to focus on alternate modes of cooling. You know just how unpopular data centers have become in the United States recently. We just heard from King of Prussia. People don't want them nearby. How are you preparing for the potential backlash if and when one of these comes to town? Sure. I think that goes back to, you know, our original strategy is putting them in the right location. For example, we have two data center campuses. One's called the Buckeye Tech Corridor and one's called Grandview, Arizona. Both are located in areas that don't have a lot of development around them today.

7:46Locating them away from those residential neighborhoods is one of the main factors that we look at making sure they're in the right location from an entitlement perspective. All right. Susie Boyles, Director of Economic Development for Buckeye, Arizona, a suburb of Phoenix. Susie, thanks so much. Absolutely. Thanks so much for having me.

8:06Coming up next, the data center revolt goes national. Lots more in just a minute, but now would be a great time to click that follow button in your podcast app and make sure here and now anytime stays in your feed. We've got new episodes every weekday of the year, digging into stories about water use, climate change, housing, and so many more things that shape your world. Follow us. Or if you're already following this podcast, leave us a good review. And thanks. When we return, how big tech bungled its data center build out and what it's dealing with as a result.

8:55This message comes from Workday, the enterprise AI platform with a deep understanding of your organization's context and guardrails. So every AI action is permission aware, giving you the ability to get work done right. It's a new Workday.

9:12Will you be quiet and let our citizens hear what needs to be said, please? That was a public meeting in May in Box Elder County, Utah, where hundreds of residents protested a massive AI data center project. Backlash to that project forced developers to downsize it. And it's far from the only example. Dozens of data centers have been canceled in the past year after local opposition and many more delayed. as people across the country and across the political spectrum come out to voice concerns about energy and water use, noise pollution, and more broadly, angst about artificial intelligence. J.L.

9:53Holzman is a senior reporter for the climate news site Heatmap. She's been digging into the data center revolt, and she tells Peter O'Dowd the sheer size of some of these projects is enough to elicit backlash. In many cases, these projects are millions of acres. They're campuses. It's not just one building. We're talking about large, sprawling structures. It's not too dissimilar from building a giant mining complex in terms of size or a very, very large real estate project. Is the size what explains how universal the backlash has become? In some cases, it's the size. In some cases, it's the cultural change and the environmental change.

10:33In some cases, it's fear of increases to power bills and water costs. In some cases, it's related to being a proxy or what I've heard from some in the industry as like a totem for the rise of artificial intelligence and anxieties around that too. What data centers have come to represent to a lot of Americans is a sudden change in their lives. It's this general social change and economic change that people feel they don't have any control over. And then that becomes projecting onto donors and the elites and all these other symbols. I'm sure you saw that voters in Missouri kicked out four city council members after they approved a$6 billion data center project earlier this year.

11:17Do you think that this is a big enough issue to become a major issue in the midterms this fall? So we're seeing in congressional races, but even more so in local government races, this issue comes up in primary after primary. These issues come up even in communities where there is no data center development. I see towns and counties banning data center development that have never had a project proposed or solicited by the local government, right? People are proactively just very upset and anxious about this industry in a way that reminds me historically of the fracking boom and backlash, as well as other historical cultural changes, all the way to like nuclear fears.

12:02Wow. Well, I hear you, but people are still using it. I mean, you know, for all the hatred that's out there, people are still turning to AI every day. And clearly it's here. Absolutely. And that's why, as a journalist, I'm trying to acutely determine at what point does a data center represent a positive for a community as opposed to a negative, right? So I've heard folks opposing data center development laying out one hypothetical. Let's say there was a requirement that a giant data center can only rely on renewable energy sources and then transmission infrastructure to renewably power the communities surrounding.

12:42So that way the data center company, Big Tech, would be essentially paying for the energy transition, paying to wean us off of fossil fuels. That is quite utopic and quite idyllic, but it's also a way that these things could represent a good. I also want to say that the communities developing data centers willfully, the people who are still accepting this stuff, many of these communities are struggling with declining revenues for social services. In those communities, this can still represent obviously not a perfect deal, not something everyone wants to swallow, But I hope that some people understand why a community would still accept this stuff, even if there are tradeoffs that exist in this economy and are real to consider.

13:22Well, I'm curious how the tech companies are responding to all this. I mean, do they see this public backlash as a threat or just an inconvenience? How do they see this? So before I covered the data center boom and the backlash, I was writing about the renewable energy transition and the solar farms, wind farms, battery storage projects, transmission lines that many were trying to build under. What I saw is that even in the cases where these projects were being opposed, the solar industry and the wind industry was doing a better job at PR and community relations in deep red Republican communities than I've seen any large tech company so far demonstrate in any of its relations with any community.

14:11Even the oil and gas industry is better at this, right? You know, you have for a long time had federal royalty structures and state royalty structures where oil and gas development brought people more revenue but also funded social services, right? And there was a long history of resource development in this country where people knew how to do this. Why do you think they're approaching it that way? Well, for a long time, the tech industry, for one part, has relied on secrecy to develop products and projects. The practice of requiring anyone you talk to to sign in a bunch of NDAs so you can't talk about anything, that is something the tech industry knows very well.

14:51Unfortunately, when they went to go and build out these hyperscalers, they came to government and after government, River and Dell, and they forced mayors, county commissioners, state legislators to sign NDAs. Every single time it comes out that a public official signed an NDA, the community around it no longer believes that the government is actually working in their interest and believes that the tech company has things to hide. Time after time again, I've heard from the largest players that this was actually a really crucial error on their part. J.L. Holzman is a senior reporter for Heatmap talking to us about the backlash against the rise of large data centers across the country.

15:34J.L., thank you so much. It's been a pleasure. Thank you.

15:41Well, that error that J.L. Holzman says some of the big tech companies made trying to get their projects built with minimal public consultation has cost them. Communities all over the country have considered or even passed bans on new hyperscaler construction. And New York just became the first state to issue a statewide moratorium. More on that plan and the politics of it coming up in just a minute.

16:33action is permission-aware, giving you accuracy 24-7 and the ability to not just get work done, but get it done right. It's a new workday. New York is hitting pause on data centers. Governor Kathy Hochul, a Democrat, signed an order this week to ban the construction of new data centers that use at least 50 megawatts of electricity. It's the first statewide measure of its kind in the country, and it's got to be in place for one year. A ban is an extreme measure, but our next guest says the data center boom happened so quickly and the backlash was so strong, it's no wonder politicians are grasping for ways to respond, especially in an election year.

17:17Robin Farzad is host of the podcast Full Disclosure. When you have that kind of money, when you have capital spending in the trillions, this stuff gets done, and it's blindsiding for governors and state capital delegates and the like to come in. But we do know that the Democratic Socialists of America have really been insurgent in New York, and Mayor Mamdani in New York is the epicenter of that. And this kind of stuff sells with left and center. So if you can't exactly, you know, talk about Gaza or talk about, you know, socialized subway or buses, you definitely could lean into something like this if you're Hochul.

17:51Here's a video that she posted on social media today. We want AI companies to invest here, grow their businesses and do well. But when you benefit from the talent and energy of New York, we expect you to protect our resources and give back to our communities. Robin, is this a situation where over the next year, the state considers new regulations, new rules that could give cities a framework that would eventually allow big hyperscale data centers to come into the state? Well, states invariably have utility regulators. And if you're a regulated utility, if you're a Con Edison or a Dominion, which is being acquired by Florida Power and Light, you can only push through so much in the way of rate hikes.

18:29But it has become zero sum. It's like it's our power bills. It's ever hotter outside. We're using more of this stuff in the summer. And who is going to incur that incremental cost? There is the broader desire for these hyperscalers building data centers to bring their own sustainable energy sources with them, to not be tapping the same natural gas lines, to not be sullying the air with diesel generators or worse. So I think that's where this fight heads to next. It's with renewable energy. It's saying if you are going to come and avail yourself of this technology, which all of society theoretically benefits from, you better come with a renewable energy source or something that's not going to increase rates on John Q.

19:08Public, who's already really ticked off about this. AI is already here. Does New York miss out if they ultimately say no to these projects? And that's the worry is we have seen that sort of environmental regulatory arbitrage with manufacturers in the past. They go to states such as Mississippi, South Carolina. Elon Musk, there's a reason why he's in Memphis. There are fewer questions asked and there are weaker union states and there's less of a blue streak clearly to them. And that's the concern. Do you go and co-locate in places where you could do worse? You cannot have any clean air aspects in Louisiana and other places along the Texas Gulf Coast.

19:44And that's a concern. But again, these are not high job density data centers. They're enormous things that run on minimal skeletal staff with huge, huge, huge infrastructure and architecture and hardware in them. And so it's not that great a loss in the grand scheme of things outside of the tax base. Briefly, I'm wondering why we operate in this order. I mean, why don't we have regulations first? because the technology is truly disruptive. It came out of nowhere, right? I mean, why are we waiting this long, 20 years into the smartphone, to have regulations about teens and social media and screen time and universities saying this?

20:23This really, truly came out of nowhere. There was a technological tipping point and trillions of dollars and Wall Street saying, here, go and spend it and ask questions later. And invariably, regulators are the ones following too late to the game. Robin Farzad is host of Full Disclosure. Always a pleasure to speak with you, Robin. Thanks. Thank you. There is more to that conversation between Peter O'Dowd and Robin Farzad at hereandnow.org, where you can also find lots more stories about just about everything under the sun. Or if you'd like to keep up with us on social media, you can follow us on Instagram at hereandnowradio.

21:04H-E-R-E, by the way. Here and Now Anytime comes from NPR and WBUR Boston. Today's stories were produced by James Mastromarino and Kalyani Saxena. Our editors are Todd Munt, Michaela Rodriguez, Michael Scotto, and Kat Welch. Technical direction from Caleb Green and Matt Reed. Our theme music is by Mike Moschetto, Max Liebman, and me, Chris Bentley. Our digital producers are Allison Hagen and Grace Griffin. And here and now's executive producer is Alan Price. Thanks for listening. We'll be back with you tomorrow.

21:51This message comes from Workday, the enterprise AI platform with a deep understanding of your organization's context and guardrails. So every AI action is permission aware, giving you the ability to get work done right. It's a new Workday. This message comes from Capital One. Capital One offers checking accounts with no fees or minimums. What's in your wallet? Terms apply. See CapitalOne.com slash Bank Guy for details. Capital One N.A. Member FDIC.