How Data Centers Actually Work
Lauren Goode: Well, they are all interested in growing more. Which of us, Mike? But the hyperscalers refers to this class of large tech companies or cloud service providers. So Meta, Amazon, Microsoft, Google, they're all in that category.
Molly Taft: Yes, and I think it's important to remember that these companies have so much money and they have the ability to raise capital like nobody's business. So they can do some really crazy things to build fast and build out really, really big. And they're getting pretty creative because their goals right now are to build these things quickly and get them up and running so they can basically use this physical infrastructure to compete with each other.
Lauren Goode: I think that's right, Molly. I think there's a lot of frenemy building going on right now, and I'd just love to be a part of their group chats when all these announcements are made.
Michael Calore: Yes, and speaking of frenemies, the other sphere of influence in which these companies operate is the political sphere. Of course, to build a giant data center somewhere, you have to have the political will to do it, which means you have to have buy-in from the local residents, the local government, the state, the country. So what is happening in the political sphere with people who want to build more data centers and people who oppose it, regulation? How does that play out?
Molly Taft: That's a great question, and I think when you look at the national conversation, it's very different than what's happening at the local level. You have Washington, you obviously have an administration that is very friendly to the idea of an American AI empire. Important to the energy conversation is the way the Trump administration has approached this support by supporting fossil fuels. They would like all data centers to be powered by oil and gas, a little bit of nuclear and coal. And this works great for that industry too. When you're going to have this massive expansion of energy demand, it's really cool to be in the middle of it and be the one that everybody wants to turn to for energy source. And then on the other hand, there's been this influx of local opposition to these data centers for various reasons, whether it's water use, whether it's fears of rising electricity rates, whether it's noise, and some of the really big struggles have catapulted this issue into national conversation. I'm thinking of xAI in Memphis. When Elon Musk wanted to get xAI up and running, he installed a bunch of unauthorized gas turbines to get xAI to work which he installed in a majority Black community in Memphis that already had severe problems with air pollution and asthma. And those people made themselves known. Earlier this year, there was an attempt in DC to impose a moratorium on any state regulation around AI altogether. It was an incredibly broad inclusion in the Big Beautiful Bill that ultimately failed. But one of the people who publicly opposed it was Marjorie Taylor Greene, who actually mentioned data centers in her opposition, and she compared AI to Skynet, the fictional AI from the Terminator movie franchise. So, this becomes some strange bedfellows in competition with each other, I think this kind of contrast between what the administration is trying to push forward and some very powerful energy companies that stand to gain from it, versus some really local movements and people who are concerned about the consequences of what these things are going to do in their communities.
