Lauren Goode: Well, everyone is interested in more growth. Who are we, Mike? But hyperscalers refer to this class of gigantic technology companies or cloud service providers. So Meta, Amazon, Microsoft, Google, they all fall into this category.
Molly Taft: Yes, and I think it’s significant to remember that these companies have a lot of money and can raise capital like no one else. So they’re able to do some really crazy things that can be built quickly and built really, really gigantic. They’re getting quite imaginative because their current goal is to quickly build these things and get them up and running so they can basically exploit this physical infrastructure to compete with each other.
Lauren Goode: I think that’s true, Molly. I think there is a lot of enemy building going on right now and I would love to be involved in their group chats when all these announcements are made.
Michael Calore: Yes, and speaking of enemies, the second sphere of influence in which these companies operate is the political sphere. Of course, to build a giant data center somewhere, you need to have the political will to do it, which means you need the support of the inhabitants, the local government, the state, the country. So what’s going on in the political sphere with people who want to build more data centers and people who oppose this regulation? How does this play out?
Molly Taft: That’s a great question, and I think if you look at the discussion in the country, it looks completely different than what’s happening at the local level. We have Washington, of course we have an administration that is very amiable to the idea of an American artificial intelligence empire. Importantly for the energy conversation, the Trump administration has approached this support by supporting fossil fuels. They would love for all data centers to be powered by oil and gas, some nuclear and coal. This works great in these industries as well. If you’re going to have this massive raise in energy demand, it’s really frigid to be in the middle of it and be the one that everyone wants to go to for energy resources. On the other hand, there has been an influx of local opposition to these data centers for a variety of reasons, whether because of water consumption, whether because of fears of increasing electricity rates, or because of noise, and some of the really solemn conflicts have brought this issue into the national discussion. I’m thinking about xAI in Memphis. When Elon Musk wanted to launch xAI, he installed several unapproved gas turbines to run xAI, which he installed in a mostly black community in Memphis that already had solemn problems with air pollution and asthma. And these people made themselves known. Earlier this year, Washington attempted to impose a moratorium on any state regulation of artificial intelligence. This was an extremely broad inclusion in the Huge Attractive Bill that ultimately failed. However, one person who publicly opposed this was Marjorie Taylor Greene, who mentioned data centers in her opposition and compared the AI to Skynet, the fictional AI from the Terminator film series. So we are dealing with a collusion between several strange partners. I think it’s kind of a contrast between what the administration is trying to push and some of the very powerful energy companies that stand to benefit from it, and some of the really grassroots local movements and people concerned about the impact that these actions are going to have on their communities.