What Do the Midterm Results Mean for Future of AI Data Centers?

[00:00:00] Speaker 1: Voters across America spoke loudly on Tuesday about a variety of issues: the economy, corruption, immigration, health care, and data centers. Construction of the sprawling buildings that serve as the engine for artificial intelligence was rejected on all but one of the ballots where it appeared. Residents objecting to the center's drain on electricity and water, to the noise, and to the limited economic benefit to their communities. NBC News business and economy reporter Ali Canal has more in our Sunday Focus. [00:00:36] Ali Canal: It wasn't just the Republican Party that took a beating Tuesday night. [00:00:39] Speaker 1: This is close to an extinction level event. [00:00:43] Ali Canal: Data centers didn't fare much better. From coast to coast, voters sending a clear message about the massive facilities powering the AI boom. I voted to just ban them outright. According to NBC News exit polling, 76% of voters oppose building data centers in their communities. [00:01:02] Speaker 3: Who wants to live next to a data center? Nobody. [00:01:05] Ali Canal: That question now front and center after Tuesday's blue tsunami. Texas governor-elect Gina Hinojosa, a Democrat who defeated three-term incumbent Greg Abbott, bowing to crack down. [00:01:18] Gina Hinojosa: It is not that I hate data centers. I hate the way they are taking advantage of Texas, and that stops when I'm governor. [00:01:25] Ali Canal: Those comments echoed by other Democrats who chose to target Republican opponents on the campaign trail over their support for the massive facilities. In Ohio, Republican Senator John Husted faced particular scrutiny. [00:01:38] Speaker 3: John Husted led the charge to bring these data centers to our state. [00:01:42] Ali Canal: Ohio voters like Angel Shelton listened. She spoke with NBC's Ryan Nobles ahead of the midterms. I mean, John Husted's on the ballot. Does this issue take that into account, how you're going to vote? Absolutely. And he's not getting that vote. Husted ultimately went down to defeat, despite pushing back against the criticism. [00:02:02] Paul Kudrosky: Local citizens and communities make those decisions, not me. [00:02:06] Ali Canal: The backlash coming as tech companies pour billions into new data centers. But for some communities, the cost is already too high. In West Virginia, Randy and Marsha Frame once lived next to a soybean field. Now, construction is underway on what's expected to be one of the country's largest data centers. NBC's Stephanie Gosk spoke to the couple in September. What has this done to your neighborhood? Destroyed it. [00:02:32] Paul Kudrosky: It has basically destroyed it. [00:02:35] Ali Canal: President Trump has been a supporter of the industry. Writing in August, communities that resist will end up being backwards and poor. And how significant overall do you think these elections and the results will have on the long-term outlook for AI? [00:02:49] Paul Kudrosky: Oh, I think they're going to be huge. [00:02:51] Ali Canal: Paul Kudrosky is a venture capitalist and fellow at MIT and Oxford. Will this give China the edge over the U.S. when it comes to AI development? [00:03:00] Paul Kudrosky: I strongly believe that it will because models are more than adequate right now for doing most of the things that you and I do. And the only thing we care about is if it's fast and cheap. Well, who's going to do it fastest and cheapest? China. [00:03:12] Ali Canal: It's all raising new questions on Wall Street. After years of soaring stock market gains powered by AI, markets took a historic plunge on Thursday, erasing nearly $3 trillion in value. And now the tech industry is facing growing pressure to win over the public that's pushing back. [00:03:31] Speaker 6: If the midterm means more focus on data centers and communities, we're going to keep doing the work to get into those communities and to build trust. [00:03:38] Speaker 1: And Ali joins me now live. Ali, good morning with voters saying clearly on Tuesday, they really want to put the brakes on data centers. And as you say, the market's reacting to that this week. What is the impact on an economy increasingly built on AI? [00:03:54] Ali Canal: Good morning, Willie. Well, by some estimates, the AI boom has accounted for nearly half of U.S. economic growth. So if data center construction slows significantly, that could hurt the economy and hit profits for companies heavily invested in AI, putting even more pressure on the stock market. But there is a flip side to this, too. Some economists say a slowdown could help ease inflation, lower interest rates and potentially free up investment for other industries. Meanwhile, National Economic Council director Kevin Hassett told CNBC there's still plenty of room for data centers and communities that want them. So the big question is whether this AI build out will slow at all. And if it does, what happens to the billions of dollars behind those massive projects? Willie? [00:04:41] Speaker 1: For now, Americans saying not in my backyard. Ali, fascinating look at this. Thanks so much. [00:04:45] Speaker 3: We appreciate it. Hey, thanks for watching. And don't forget, you can catch the Today Show every morning on NBC or take today when you're on the go. Just follow the Today podcast on Apple Podcasts, Spotify, or wherever you listen.