Silicon Valley oversold the 'benefits' of AI to investors in ways that not only exaggerated the potential economic impact, but did so in ways that alienated a growing majority of American voters, who are headed into mid-term elections in just over two months.
Even before the elections, state and local governments are rejecting data center construction permits and some are even passing ordinances prohibiting their construction. The impact of such opposition could stall the building of the centers the tech industry claims it has to have to meet growth targets which were already fanciful. A cascading effect would then take place due to the amount of debt issued by tech companies which they may then be unable to pay off. Without the expected computing capacity, stalled due to local opposition across the US, AI projections appear even further out of reach and the industry only recently has begun to wake up to the seriousness of the threat, but has not yet proven able to cogently address voters' concerns, in large measure because it never occurred to them that they might be held accountable for the financial, environmental and social affect as well as the fact that a significant majority of Americans believe AI will enrich billionaires while impoverishing everyone else. That is not a winning platform for Big Tech. JL
Amrith Ramkumar and Sabrina Rodriguez report in the Wall Street Journal:
A growing voter outcry over data centers that strain resources and fuel a technology capable of putting Americans out of work is becoming a mounting liability for Republicans and some Democrats in this fall’s elections. More than 60% of Americans now oppose new data centers in their area, up from 49% in March. The backlash is a crisis for AI companies, which are facing bans or pauses on new projects in dozens of states and localities. They pose a risk to investors heading into the 2028 presidential election due to the volume of such proposals. The opposition has the potential to slash 2% to 3% off annual economic growth if it metastasizes.