economy
Data center investors are overlooking the political risks
There is more than one way for an AI bubble to burst.
TL;DR
- The data center business is booming, with significant investment from public and private equities.
- Political opposition to data centers is growing sharply on a bipartisan basis.
- States like New York, Pennsylvania, and Texas have implemented new restrictions or moratoriums on data center projects.
- Investors often dismiss political opposition as a solvable education issue or a temporary hurdle that will dissipate after elections.
- They believe there are still plenty of states where data centers can be built or expanded, and they advise against focusing too heavily on any single state.
- Local political fights could escalate to national issues, potentially involving federal government intervention.
- Arguments about economic benefits might not resonate with the general public, especially if electricity costs are rising.