6 US states want to ban data centers. Here’s what can happen.

00:00 passion

Which states are pushing back and why are they pushing back?

00:03 Jake

Yes, Josh, you’ve got six states with bills currently being considered. You’ve got Oklahoma, Vermont and Maryland, but the three major hubs, New York, Georgia and Virginia, are home to data center alley in the Lowden area.

00:15 Jake

Those are the three major areas of development. These bills are structured in a few different ways, but the basic principle is the same

00:20 Jake

This is because they want to stop data center development. Essentially say in a window of about a year to about three years,

00:24 Jake

You can’t develop here, you can’t build here until certain constraints are met or we clear the pipeline until we meet requests or pre-conditions.

00:34 Jake

But essentially it’s saying to those developers, these states, if these bills pass, you’re going to be driven to the wall.

00:40 Jake

And the real argument here is infrastructure stress. These data centers suck a lot of energy. They absorb a lot of water. This will put pressure on ratepayer bills. In these highly developed areas, you see electricity bills rising.

00:48 Jake

You see water stress in those areas. The grid is under a lot of stress. And so lawmakers are now trying to get ahead of that and say, wait, wait, wait, delay. Get some stuff in the books, get some rules in place. But to do that, we need to breathe.

00:58 passion

Jake, what are the chances of these bills actually passing?

01:03 Jake

They are going to face an uphill battle for a few reasons. You must remember that these data centers bring jobs. They bring in tax revenue.

01:10 Jake

Also, the companies behind these centers, Microsoft, Amazon, Google, these are not easy to push together. These are companies with real political clout and firepower, with real pressure. And many of these governors are at least nominally pro-development.

01:21 Jake

So the argument they’re going to come up against from these data center developers is, hey, we’re bringing you jobs. We are bringing you revenue. Why do you stop building us? And they’re going to face the same kind of pushback from business interests, the business lobby.

01:31 Jake

Even if these bills don’t go through, you can still see and probably still will see some form of regulation, cost sharing agreements, water use standards. But now the focus is on these moratoriums because of their top-line impact.

01:42 passion

How much, Jake The final question, could all of this disrupt the big AI ambitions and dreams of Big Tech?

01:48 Jake

I guess the rule of hyper scale is speed now, right? An arms race is underway. You see these companies are spending hundreds of billions of dollars building this infrastructure. And here is the game speed for Microsoft, for Google, for all these companies to build these.

02:02 Jake

How fast can we get these things to power the compute we’re trying to put on the market? Any kind of delay there will hurt those companies and slow them down.

02:10 Jake

I was talking to someone today who works in site selection advising these companies where to go. She was telling me that you already have people inside these companies taking a second look at some of these places and saying it’s not the right idea. Maybe we’ll go somewhere

02:19 Jake

With less legislation on the remaining proposals on the books. The problem is that there is little infrastructure in those areas. So you’re going to run into problems wherever you go.

02:26 Jake

But regardless, especially on big sites like this, big states where it’s getting a lot of development, when the speed laws, anything that’s going to slow down the speed is going to be detrimental.

02:35 passion

OK, big story. Thanks to Jake for covering this. Appreciate it. thank you