Kevin O'Leary Warns: Stopping AI Data Centers Could Cost America Trillions

[00:00:00] Speaker 1: Data centers were on the ballot Tuesday, even where they weren't. Democrats flipped governorships in Texas, Ohio, Georgia, Nevada, and Iowa. Many of them campaigned hard against the server warehouses that power AI. A tracker cited by the Associated Press found that 32 of 34 winning candidates for governor want tougher rules and local measures to restrict data centers passed in 44 of 45 completed votes. In Texas, the new agriculture commissioner says his fight against data centers was key to his win because ranchers fear for their water. He put it this way, whiskeys for drinking and waters for fighting. That backlash comes with a price tag. On Thursday, amid fears that the AI buildout will slow, the Nasdaq tanked more than 5%. The Mag 7 lost more than a trillion dollars in value. On Friday, tech stocks clawed back some ground. The Nasdaq closed 1.1%, rose 1.1%. Only a fraction, though, of Thursday's loss. The stakes reached well beyond Wall Street. Economists at ING estimate that AI spending accounted for as much as a quarter of U.S. economic growth this year. Friday's jobs report showed 165,000 new jobs in October, far more than expected. With the AI buildout directly driving gains in manufacturing and construction. In the Wall Street Journal, venture capitalist Brad Gerstner estimated that 25 to 35% of next year's U.S. data center buildout could now be at risk. And it's your money, too. As of mid-year, Federal Reserve data showed that American households held a record 48% of their financial assets in stocks, counting retirement accounts and funds. About three in four voters don't want a data center in their community, but only about one in four call the issue crucial to their vote. So will that opposition hold once the costs show up in paychecks and retirement accounts? I want to know what you think. This is today's poll question today at smirconish.com. Is stopping new data centers worth the cost to the U.S. economy? Joining me now, chairman of O'Leary Ventures, investor Kevin O'Leary. His company, O'Leary Digital, is part of a partnership developing the proposed Stratos data and energy campus in Utah. Kevin, nice to have you back. Voters this week elected candidates promising to rein in AI data centers. At what cost does that come to the economy, in your view? [00:02:19] Kevin O'Leary: Well, I think you did an excellent job of framing the debate. And a lot of people thought it would be a top item. It really wasn't at the end of the day. Data centers are low on the list of concerns to voters because of all the jobs they create. But the volatility in valuation has always been in tech stocks and semiconductor stocks. Yes, a trillion dollars was erased in value. But that happens all the time. The question is, how are we going to satiate the demand for compute and capacity that we need to digitize our economy? That hasn't changed at all. The demand is insatiable. But I think I'm going to tell you a story that I think really sums it all up. This just happened last night to me randomly. I'm in Boston at my home. I'm walking from the train station. I go into my local oyster house. I love it there. And a young man comes up to me. I have his card. Lander Beck is his name. He is the CEO of something called Fairway Glass in Morgan, Utah. He got engaged last night. I saw the engagement ring. Congratulations to both of them. Here's what he said to me. I live in Utah. I want to work with you to build this project. I want to grow my business. I want to hire more people. I'm in Morgan. I'll come to Box Elder. I'll supply your glass. And there are thousands more of us in Utah that want this to go ahead. So everybody's saying, oh, this is bad. That's not true. There are many people like Lander. Here's his card. He wants to do business. And it's not just Utah. It's all across the country. And the mandate given to governors in Texas and other states where they had this change is to make the middle class wealthy. Well, who's the middle class? It's the electricians. It's the plumbers. It's the construction workers. It's the millions of jobs that these data centers and power construction sites are going to provide to America over the next five years. Let's think about that a little bit. And let's congratulate this young entrepreneur in Utah who really wants to do something great with his life. There you have it. [00:04:19] Speaker 1: Okay, so that's what Ryan says. Let me tell you what Bernie says. Put it up on the screen, if you will, and I'll read it to Kevin O'Leary. This is what Bernie Sanders says. He says, seven months ago, AOC and I introduced an AI data center moratorium. Last night, 43 of 44 communities voted for one locally. Americans and big tech oligarchs wrecking the environment, gutting jobs, threatening humanity's future. National data center moratorium now. What do you say to Bernie Sanders? [00:04:49] Kevin O'Leary: I say, Bernie, you better talk to Lander Beck in Utah and the millions of other entrepreneurs that see this as an amazing opportunity because AI is here to stay. There's two camps. Some believe that the robots are going to eat the babies, and the other believe that we're going to cure cancer. I'm in the cure cancer camp, and so are millions of other people. And I think that's at the end of the day. No one wants to stop innovation. No one wants to stop job creation. Nobody wants to stop digitization. I get it. And above all, everybody wants to have prosperity in America. This is the number one use of capital in our economy right now. Number one. And it creates millions of jobs. So, Bernie, think about that while you're trying to shut this down. That's not a good move for you politically. [00:05:36] Speaker 1: Hey, we're six days away, six days away from honoring veterans on Wednesday, November 11, and being in the company of one special veteran. That would be Rob O'Neill from SEAL Team 6, the raid on Abbottabad, the taking out of bin Laden. It's going to be a great night. In fact, it's going to be such an exciting night that C-SPAN is coming and televising it. But that doesn't mean you should sit on the sofa. You want to be there and be a part of what's going to be a very special night. Rob O'Neill, Parks Casino, next Wednesday, November the 11th. And, by the way, so many mingling opportunities at Parks upcoming. They've got monthly Latin dance nights, monthly jazz nights, country line dancing, comedy. Then they've got the Excite Center where the headliners go. Bachman-Turner Overdrive is coming early in 2027. Comedian David Spade, comedian Pete Holmes. The Get the Let Out Zeppelin tribute is in December. So, go to Parks, P-A-R-X-Casino.com to get your tickets. My social media has all the information about the Rob O'Neill event. You can find it there as well. I hope you'll be there on Wednesday when we honor all veterans. You've got to be 21. Gambling problem, call 1-800-GAMBLER. How did you interpret the market move? AI stocks lost about $2.5 trillion in value this week before bouncing back a little bit on Friday. Do you think that was a reaction to the election, or was it a sign that the AI boom was overheated? [00:07:01] Kevin O'Leary: I think both, really. I thought, you know, what happened there, and we've all seen this movie before, go back and look at the chart of Amazon, which was one of the first to bring tech on the internet this way, in commerce. The volatility in that stock over the decades I've owned it has been extreme. And that happens generally in technology because there's so much optimism and high P.E., price-earnings ratios. I think what's going to happen, and I'm an optimist, and I'll tell you why I say this. I have an interest in over 50 companies that are private, small, 5 to 500 employees. I've talked to my CEOs after the election, I said, what are you going to do different? They said, nothing. We're having our best quarter in years right now. The economy and the consumer is doing very, very well. In fact, we're almost at full employment. And we have inflation to deal with because there's so much demand for goods and items. And we have high energy. There's a lot of headwinds that seem not to have been affecting the economy or growth. And I believe the reason that has happened is the benefits of AI across all 11 sectors of the economy. It's a remarkable thing that happened. You would think with two wars and high energy and high food costs and everything else, that we'd be on our way to a recession. Not happening. AI is part of the reason that this economy is so buoyant. And I think we have to support that. How do we do it? We need more power. We need more data centers. And I think most people understand that. [00:08:24] Speaker 1: I only have 30 seconds, but you better address those who are now going to bombard me and say, well, Kevin O'Leary is not saying anything about affordability. What about the affordability issue? [00:08:35] Kevin O'Leary: The thing we have to do on affordability and where it's felt most is in energy and in food costs. So I think we have to adjust the tariff policies a little bit around those sectors. We have to take for a while the tax off energy, which is oil, jet fuel, diesel fuel. And obviously that hurts because that's transportation. But I 100% agree. Food costs are very painful. And you saw what happened in the election. But that's driven by energy and warehousing and transportation. These are very fixable because they're domestic. And at the end of the day, everybody would like to see this conflict in the Middle East over with. Everybody. Everybody. Because it's hurting the entire global economy. [00:09:15] Speaker 1: Kevin O'Leary, thank you. We appreciate your visits. Thank you for that. Let's see what everybody else is saying via social media. You can find me on all the usual platforms. Follow me on X, Facebook, YouTube. Absolutely not. This is to the poll question, I imagine. The Dems have to be careful not to let their green climate obsession undermine our economy. And those who invest in it, the left wing of the party, have a total disdain for Wall Street and those who own stocks. If that is their agenda, their momentum will die. And this is in response to today's poll question. Could we put it up, actually, and show the poll question of the day? Is stopping new data centers, there it is, is stopping new data centers worth the cost to the economy? I don't know how this one is going to turn out. I'm really happy with the framing because I think that the market shift this week is clear. The implication of a shutdown or moratorium mode, I think everybody knows that we need them. Just nobody wants them in their own backyard because of some of the concerns. Some of the concerns that I think have been blown out of proportion based on the data that I have seen. By the way, I have a great debate on AI data centers, which is posted on my YouTube page. Go and check that out. You'll be better informed if you spend an hour watching it. One host, two guests, insightful debate. We're not finding balance on anything in our country right now because everything's just a fight. I mean, this is a live conversation that's happening in Virginia right now. I'm very familiar with the politics and the economic. I completely disagree with that. Get perspective on topics that impact our daily lives. Is it time for an amicable American divorce? The machines are no longer coming, they're here. Trump and presidential power. Data centers. Hear diverse opinions. As Ryan correctly puts, we agree on many things. I respectfully disagree. [00:10:59] Kevin O'Leary: So, Senator, now you're tapping into the real problem. [00:11:01] Speaker 1: When did greed, which was labeled one of the deadly sins, when did that become a virtue? Decide which side of the debate you're on, get involved. I want you to hear a sample of what some of the audience has told me. Roll that tape. Dave, you're in Arizona. We all know that California sets the regulations for the rest of the country as it goes anyway. I love your show, I love your callers. Thank you. You're good for my demographic. Be an independent thinker and listen with an open mind. Can we agree? Available now for your viewing pleasure on this YouTube channel. Subscribe, watch, enjoy.