AI data centers bring 'REAL BENEFITS' to local communities: Manhattan Institute economist

[00:00:00] Speaker 1: - Thank you very much for that report, we appreciate it. [00:00:02] Speaker 2: - Joining us now, Manhattan Institute Economist and Research Director, Judge Glock. Judge, great to see you. You wrote a piece, or you have studied this extensively. There is report after report on how these data centers, because they are essentially spreading the load, the cost spreading across more infrastructure that has already been built. It actually, at the retail level, can lower people's electricity costs. But I don't understand why we're not hearing boo from the tech companies building these doggone things. [00:00:46] Judge Glock: - Yeah, it's real tragic. I don't know where a lot of these myths started. Data centers do use an immense amount of electricity, about 5% of all electricity in the United States. But for consumers in households and residences, that's good. The power they use and they buy, that pays for the electric lines, that pays for generators. And study after study proves this is reducing prices for the average human in America. What's driving up prices, including for me here in Northern Virginia, is not the data centers nearby, it's things like the offshore wind that's being built off of Virginia's shores. It's closing down the nuclear power plant in New York. That's what's driving up people's electricity prices. But a lot of politicians see a chance to blame data centers and deflect the blame for those higher prices onto someone else rather than themselves. [00:01:36] Speaker 1: - You know, it seems to be like there's good faith opposition to data centers and bad faith opposition. On the good faith side, you got people who just say, I don't trust big tech, okay? They've burned us a few times with other things. I don't trust them. I don't know what this future looks like. And so I'm concerned that we're getting out into something that's gonna have terrible side effects. But I don't think, and I think this is a point that Dagan was making, tech hasn't been out there selling the benefits of this. It seems like they've kind of tried to move fast, jam it down throats before anybody noticed, Judge. Do you think that's gonna change? Is it possible for the companies building these things out to get out there in communities and have a more persuasive conversation about the benefits? It's just, it's not happened yet. [00:02:26] Judge Glock: - Yeah, I mean, this is an industry that barely existed 20 years ago, or even 10 years ago, really, and now is becoming one of the biggest sources of investment in the United States. And actually the early months of President Trump's term, it probably accounted for around half of all economic growth. So it became huge really, really quickly. And I don't think a lot of people in the tech industry understood the extent of the backlash or the concern, but I think they're trying to do a better job to answer that. You know, we can all admit these things aren't beautiful. They're big concrete boxes, really. They've been trying to prettify them with some windows and some extra decorations, but we all have to admit we need these. We need these for the internet. We need these for AI. We need these for our basic business training. And that's the sort of thing they need to sell to the American public. Hey, maybe a power plant isn't the most beautiful thing in the world, but obviously we need that. And the debate is just gonna be hopefully community by community convincing people, this is just part of modern industrial civilization. And there really can, as I've tried to show, bring huge benefits to some of these communities. [00:03:30] Speaker 2: Somebody explained it to me that Google and Amazon became multi-trillion dollar companies by scaling their businesses mercilessly and by not engaging with humans and their customers. That's how they got so big. And quite frankly, they're maniacally focused on efficiency and eliminating the parts of the business where they have any human contact. And quite frankly, the people they need to be communicating with are just kind of digital flesh and the wood chipper in terms of making money like Google. They're scraping your data. You can't even get your email account turned back on at Gmail if your identity is stolen. They just don't care about individuals. And that's a lot of the backlash, Judge. But we want to get your take on maybe people will hate politicians more than big tech. New York Governor Kathy Hochul is not worried about AI companies leaving her state after her first in the nation moratorium. Listen. [00:04:33] Kathy Hochul: So they can go there right now. I think when they look for the state that has the most clear road ahead, that we remove uncertainty and say this is what our expectations are. But you meet them, you'll be able to move forward. They'll come back to New York. I have no doubt about it. But they'll come back to New York on our terms. That's the difference. Do you buy that? [00:05:01] Judge Glock: No, I mean, I think businesses are pretty smart. And when a whole state tells them you're not welcome here, I think some of those businesses are going to have second thoughts next time around about trying to put down some shovels and trying to make some real investments in the state. I mean, listen, like, Virginia is the global epicenter of data centers. And specifically, we have this one county, Loudoun County, that has more data centers than anywhere else on Earth. And one of the reasons is a lot of people here understood that there are real benefits to the community. Right now in Loudoun, the data centers are paying almost half of all taxes in the county. Wow. That's enabled -- that's enabled the county to lower taxes there for average homeowners, just like the electricity use has allowed them to spread the cost among more homeowners and reduce those as well. So there are real advantages here. And, yes, the tech industry has, of course, had some trouble communicating those in the past, like for a lot of its products. But I think a lot of this animus against data centers is actually just general animus against the tech industry. Right. And it's misplaced on these real concrete things that are bringing real benefits to local communities. [00:06:04] Speaker 1: Judge Glock, we appreciate your expertise tonight. Thanks for joining us.