Everyone hates data centers

0:00Noel King:On Truth Social, there is no shortage of President Trump lashing out at things. At Iran, at communism, at Hollywood, at Governor Kathy Hochul. That's all in the last day or so. Two days ago, the president did something he doesn't often do. He lashed out at Americans. The only reason that communities throughout the USA should not want data centers is if they want to end up being backwards and poor. If they want to be successful and rich, far lower taxes and jobs all over the place, let data reign. The good news is that there are plenty of other places that want them. If we kill the golden goose, you will only have yourselves to blame.

0:42Noel King:The thing is, Trump seems out of the loop on this one. Americans are leery of data centers, and increasingly so are the people that Americans elect. A growing number of politicians, both Republican and Democrat, are loudly pulling back on their support for data centers in their communities. That's coming up on Today Explained from Vox. Support for the program today comes from Fetch Pet Insurance. Fetch is the most complete pet insurance for dogs and cats, according to Consumer Advocate. You get paid back up to 90 % of vet bills at any vet in the United States and Canada, with claims paid back in as little as two days.

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2:08Noel King:Paul Cobbler is the Texas Tribune's economy and industry reporter. So, Paul, even a year ago, Governor Greg Abbott was very, very bullish on data centers in Texas. What was he saying at the time. Governor Greg Abbott declared Texas the epicenter of the data center boom in the United States. More so than any other country in the entire world, Texas will be the centerpiece for AI data centers for Google in the entire world. You know, really, really was kind of full-throated in his support of this build-out of all this investment we were seeing. Texas was the number two market in the country for data centers at the time.

2:43I think we're now the number one market. We have more planned and more being constructed than any other state. It was kind of full bore, I'd say, and has been for much of this year. Your local McDonald's is going to be using it to better enable their business to function. Your local stores, your local grocery stores, your local HEB and things like that are all going to be operating better because of AI generated right here in Midlothian, Texas. There's also a lot of talk that this will create jobs. It certainly is creating construction and like electrician plumber jobs right now. But, you know, there's a lot of question on how permanent those jobs are.

3:18And then on the other side, just sort of being like a centerpiece of U.S. national security that comes up a lot sort of from GOP and from the governor, but from GOP sort of state officials. They they see this as sort of we are we are supporting the United States in this race against China as well. We need to do better. China is going to win this war, Cheryl. Now we're in a race with China on that AI race. And if they're able to to leapfrog us in that race, it's a very dangerous thing for everybody around the country.

3:47Noel King:All right. So the governor is in favor and then some data centers are built. Yeah. Where'd you guys see him being built? It really is everywhere. But sort of a newer trend with these really, really big ones that we're seeing being planned is that a lot of them are out west. They're out in unincorporated parts of counties that don't have any sort of city government jurisdiction over them because in the state of Texas, our counties, if it's in an unincorporated area, they have no zoning ability. So developers see that as like a very positive thing that they don't have to get any sort of approval to be able to build ahead of time like the way they would in a city.

4:26So we've done like an analysis of I think it's 240 data centers. Yeah. And those are planned for unincorporated areas of counties.

4:37Noel King:OK, so this is interesting. You're not talking about one or two or even 10. You're talking about dozens and hundreds.

4:50Noel King:What goes on in Texas when somebody puts up a data center in a community? You said these are more rural areas. Are you seeing protests? Are you seeing pushback? What's been going on so far? Yeah, it's been really fascinating to watch this kind of build over the course of, I'd say, about a year. I mean, this was something we were sort of seeing minor grassroots resistance to about a year ago. They all packed the courtroom wearing their no data center stickers. We already have Samsung down the street, which is a huge undertaking. And I think the residents just want room for their kids to learn and play and grow safely.

5:27They only have interest in increasing their pockets and in causing themselves to be elevated. But what it will do to the actual people of this community, I don't think they really care. And they've gotten a lot more organized. I mean, they talk to each other now, they go to protests at the state capitol together. Then you really see it at a lot of these local city council and county commission meetings where we have just seen countless examples of meetings that are packed with hours and hours of testimony, hundreds of people there in counties that are not very populous at all and probably typically don't see county commission meetings that have that many people at them.

6:03All right.

6:04Noel King:So Texas wanted to be in the data center business. Was it doing anything to incentivize the building of data centers there? Yes, absolutely. I mean, this was a really interesting thing that I published a story on in April. And this is not, I think, uncommon to a lot of other states in the country, but we had a state sales tax exemption. I think the easiest way to explain what is exempt is like if you tip the data center upside down, it's sort of everything that falls out that contributes to the operation of the data center. So servers, server racks. But the big one, and this is really the sticking point, I think, for a lot of state officials and for the public, too, is that electricity is exempt under this state sales tax.

6:44And I mean, I'm sure you've heard about these hyperscalers that are, you know, one gigawatt in capacity, which is, you know, the amount of electricity that 750 ,000 homes use on average.

6:55Noel King:All right. So the reason we're talking today is that Governor Greg Abbott has changed his mind on data centers. What is Greg Abbott saying today? You know, I wouldn't consider it a wholesale mind change. I mean, it certainly is like the governor and a lot of these Republican officials that are supportive of sort of the overall data center buildup for those reasons we mentioned as far as job growth, economic development. You know, they are also very aware of the politics of this and are trying to take steps to show they are ordering responsible development. They've not been working in collaboration with local governments.

7:31And so they basically dug their own grave for the problem that's been caused for them, and that's why they got the backlash they deserve. They are requiring data centers to pay their own way in power so that costs of those don't go on to residential rate payers, that they provide their own water and aren't using water from the wells or the aquifers that might be running low in a state that's pretty stricken with drought a lot of the time. What we have to do right now is put standards and practices in for data centers, just like we did with oil rigs. He's saying all of these things, but also saying, you know, this is a very valuable industry for the state of Texas and we do not want to leave it behind.

8:07Noel King:How are the companies behind the data centers responding to the governor's, let's say, increased hesitance about their their value to his state? Are they upset?

8:20No, I think you might be surprised to hear that. They've been incredibly supportive and the governor has been very happy to let us all know about that. It was August 3rd that he issued this most recent letter ordering an audit of all of the data centers that are in this interconnection queue before it can be approved to be on the power grid. And basically, that is just ensuring that they will pay their own way in power, that they have water supply, that we know who the operator is, that we have an accounting of all of the local and state tax incentives this data center might have. Ever since that August 3rd letter was sent out, we have just seen a wave after wave of data center companies, developers coming out and saying they're supportive of it.

9:00Governor Greg Abbott today announced that Microsoft, Hut 8 and Equinix, stack infrastructure Anthropic and Night Peak Energy, Amazon, Lancium and Cypher Digital will comply with the standards and guidelines he established for data centers. It's really the governor and the industry are kind of in lockstep on this. They see this as a good and responsible path forward.

9:27Noel King:Governor Abbott is up for reelection in November. How much of his updated, let's say, attitude on data centers comes down to politics, comes down to voters seem like maybe they're getting squeamish about this? Well, yes. I mean, he hasn't said it explicitly that it is tied to the election, but I think you certainly can draw your own conclusions based on a lot of things here. I mean, the polling in the races in Texas, really the big ones are our governor's race where Governor Abbott, like you said, is up for reelection against State Representative Gina Hinojosa. And then our U.S. Senate race where Attorney General Ken Paxton is facing off against state representative James Tallarico.

10:07In both of these races, the polling for a state where a Democrat has not won statewide in more than 30 years is incredibly close. I'm polling in the state has shown the data center build out to be very unpopular. More than 60 percent of people against having a data center built in their own community. You know, the the rural conservative is is the Republican base in the state of Texas. I mean, it's a it's a group that Republicans typically win with more than 75 percent of the vote. And we have seen polling that shows that those folks are dissatisfied. So all of that to say the governor has not said I am doing this because of the election.

10:40But what I will say is the pause on data center approvals is expected to last through November.

10:46Noel King:Has this risen to be one of the top issues in this election, do you think? I would say it is. The candidates are kind of making that own case on their own. And in the U.S. Senate race, both State Representative Tallarico and Attorney General Paxton have recently released their own plans on, you know, what they'll do about the data center build-out. I mean, obviously, they're running for federal office. So kind of from their perch in the U.S. Senate, if they're able to win that seat. Texas Attorney General Ken Paxton released his data center plan just yesterday. And in a news release, the AG says he would ban Chinese technology from U.S.

11:18data centers and hold companies criminally liable if their data centers power AI chatbots that endanger children. We need a senator who's going to fight for all Texans, not just billionaire megadonors. And it's why I'm here listening to the folks in Abilene. It's why we're traveling the state listening to Texans. And it's why we've rolled out a comprehensive plan to rein in these data center companies. But then same with State Representative Hinojosa, the Democrat running for governor, and then obviously Abbott and his recent actions being taken.

11:55Because I think there are dual pressures going on here. And so we're seeing, you know, candidates talk about it. We're seeing advertisements pop up about it. We're hearing voters on the street talk about it. I mean, I think it's getting, yeah, it's up there. I think maybe the easiest way to say that. It's near the top.

12:20Noel King:Paul Cobbler is the Texas Tribune's economy and industry reporter. Coming up, the data center backlash goes national.

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15:37Data, look at this. Data. What? My name. It is pronounced today explained.

15:48Noel King:I'm Noelle King. Jeremy Merrill is a data reporter at The Washington Post. Jeremy analyzed thousands of social media posts and newsletters to see what elected officials on both sides of the aisle are saying about data centers. And he found that earlier this year, a lot of them started changing their minds on the issue. Data centers didn't used to be a big deal. And now, almost all of a sudden, they're a big issue. Candidates are sort of falling over themselves, to sound tough, about data centers. And data centers are kind of overwhelmingly portrayed as a problem rather than an opportunity or a benefit.

16:25A great example is Senator John Husted, who's a Republican senator from Ohio, who's up for election this November. I am an Ohio guy with Ohio values, and I will fight for those values in Washington, D.C. He used to praise data center projects that were coming to Ohio when he was lieutenant governor, because it would help establish Ohio as, quote, an important tech hub in America. and he said that data centers are essential to our digital lives. If we want to have economic dominance and national security dominance, we need to have technological dominance. And AI and data centers are a big piece of that.

17:01And I know that the American people want to win. And now he's saying he's trying to, quote, protect Americans from having to foot the bill for data centers. What I have taken the position of is that any data center that's built should be first a local decision. If the local community wants it, then they can negotiate with the data center on the terms. He's really emblematic of a shift that happened all across the Republican Party in about February of this year. That's when the bulk of messages from Republicans about data centers flipped from focusing on them as bringing benefits to their states and communities to talking about their downsides.

17:39This is really a case of the anger and unhappiness bubbling up from sort of everyday people up to political elites. And that grassroots anger was all across the political spectrum over a whole range of issues. Power bills, claims about how much water data centers may use, air pollution, eminent domain, taxes, subsidies. and, you know, according to some people, sort of generalized anxiety, sort of physical manifestation of general anxiety that people feel about what AI is going to do to our society, to our brains, to our kids, and to our jobs.

18:21Noel King:Okay, so we know that it's not just one single candidate, maybe even not just a handful, because you reported that the National Republican Senatorial Committee warned that, quote, data centers are the anchor hanging around Husted's neck. That is pretty that is pretty strong language. Is the National Republican Senatorial Committee admitting that the wrong position on data centers is enough to lose a candidate a race at this point? I think it's something that they're they're certainly worried about. He's in a tough race. It's a toss up. And presumably you're looking for any kind of an edge or to prevent your opponent from getting an edge over you.

19:01Noel King:OK, so Republicans running for Senate, for governor, they're telling a different story. What about President Trump's messaging on data centers? He initially, at least, was very, very bullish on AI investment in the U.S. Let's get these AI companies out here. What has Trump been saying? This is sort of a story in two or three parts.