Grassroots vs. Gigawatts

**Bill Cohan** (0:01)
I think this is a real grass roots effort, unlike anything I've seen in a long time, that could have political implications, not only in November, but further down the road, if politicians don't take heed of what's going on here.

**Peter Hamby** (0:20)
Welcome to The Powers That Be Daily, Puck's podcast focused on the intersection of Wall Street, Washington, Silicon Valley and Hollywood, and the players who run it all. I'm Peter Hamby. It's Tuesday, August 25th. Today, I'm joined by Bill Cohan to discuss the growing grassroots revolt against data centers, how politicians in both parties are reacting in an election year, and whether the backlash is hurting the big AI companies as they try to scale, cash in and change the world.
We'll discuss all that and much more on today's episode of The Powers That Be.
Happy Tuesday, everybody, and welcome to The Powers That Be. I'm talking today to my colleague, Bill Cohan, author of Dry Powder. We're going to talk about why after a long, terrible run, Bitcoin is surging again. We're also going to talk about the big datacenter backlash in this country against big AI companies, and whether that is going to hurt these companies' bottom line, especially as they race to IPO, at least in the case of OpenAI and Anthropic. Bill, it's good to see you on island as usual.

**Bill Cohan** (1:42)
Nice to be here.

**Peter Hamby** (1:42)
Let's start with the datacenter backlash. This is top of mind for me. Of course, you see Democrats and Republicans racing to distance themselves from datacenters and AI companies. There is some whiplash on the Democratic side. You have Governor Josh Shapiro of Pennsylvania, for example, who's running for re-election this year, probably going to run for president.
Just a year ago, he was talking about making Pennsylvania like the AI capital of the country, welcoming all of this CapEx investment, research, etc. Now he's running away from it and promising to create more of a regulatory architecture around AI companies. The concern, of course, is pressure on energy consumption, water, noise. Look, some of this is just like reactionary panic, I get it. But this is an instance of real grassroots political fury that came really quickly and almost out of nowhere that we haven't seen for a while. The interesting thing you see on the Republican side, and we see this in Texas with Governor Greg Abbott, is they're doing the Josh Shapiro thing on steroids. Donald Trump is in the White House, he's cutting checks and helping broker deals between Jensen and Sam Altman, and the Republican Party generally has been pro-AI. They're pro-business, they're pro-investment, they want to give tax credits to these companies, come to their states, etc. Now National Republicans, especially at the NRSC, are telling their candidates to figure something out. You got to run away from these companies or get the AI companies, if you're not running away from them, to come in and spend big on your behalf, on your campaigns. And so look, Kathy Hochul in New York, Institute of Moratorium, not a ban, a one-year moratorium, where they can just hit pause, figure things out, help local communities learn about these data centers before you welcome them into your state. You have other Democrats proposing that they pay their own taxes, that they figure out a way to pay for their own water, and that they invest in communities if they're going to show up here. And not just create construction jobs for six months, but create real long-term jobs, is that's what we're going to do.
That's a long preamble bill from the political side. If you are open AI, if you are meta, if you are alphabet, what are you going to do about this? And are you scared? It's going to slow you down.

**Bill Cohan** (4:04)
Well, I do agree with you, Peter, that this is a grassroots effort that seems to have really taken hold. And in local communities, statewide, you mentioned Kathy Hochul, I think seven or eight other states are considering some sort of moratorium. None have, Maine almost passed a moratorium, but they did pass a moratorium at the legislative level, and then the governor vetoed it.
So Utah is struggling with this, because that's a drought-ridden state, and one data center can use as much as 15 billion or more gallons a year. And in some, like in Provo, they blocked a data center. Another one that is being sponsored or belonging to Mr. Wonderful of CNBC fame has been dramatically scaled back in Utah because of public pressure. And so, this is becoming a real intersection between business and politics and could have significant repercussions at the state and local level. Our friend, Bernie Sanders, teamed up with AOC to introduce a national moratorium bill to, I think as Bernie might put it, slow things down until we figure out what the hell is going on here. And got to stop the billionaires. Exactly. I mean, I think what is having an effect is that these data centers are designed to keep the AI boom going and may be a requisite part of the AI boom. And who are the beneficiaries of the AI boom? Essentially, billionaires and trillionaires, who are already plenty rich. So they're like moving forward to get even more rich without really stopping at all and pausing at all. And I think that's the purpose of this legislation and what's been going on here to have people pause and really consider some of the consequences of these huge data centers, which use tremendous amounts of water and electricity, obviously destroy the landscape that was existing there and that will probably never be restored.