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States and communities opposing them will be left behind
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U.S. President Donald Trump said on Wednesday local time that data centers might 'need some help on the public relations front,' but he remains firmly supportive of the AI industry and the construction of necessary facilities. Trump made the remarks to reporters after a cryptocurrency event. He said that if he were a governor or mayor, he would want his community to have these facilities because data centers create a lot of jobs and tax revenue is 'enormous.'
Trump's comments come as governors across U.S. states face increasingly strong opposition and are beginning to tighten incentives for data center construction. Pennsylvania Governor Josh Shapiro announced a set of data center construction standards he called the 'strictest,' citing 'speculators' who are 'bullying' local officials. The same day, former NFL star Jason Kelce in a beer advertisement called on people to mail urine to data centers. The advertisement was jointly launched by Garage Beer, founded by him and his brother Travis, and canned water brand Liquid Death, but the company reminded people not to actually send it.
With the November midterm elections approaching, 'supporting data centers' is quickly becoming a political label used by both parties to attack each other. Trump said that communities and states that choose not to build data centers will be 'left behind,' similar to his comments on New York State's pause on data center construction.
Data centers can bring substantial tax revenue. For example, in Loudoun County, Virginia, data centers contributed more than one-third of the county's general fund total revenue last fiscal year. At the same time, states have long attracted data centers through fiscal incentives; Virginia's sales tax exemption policy saved the industry $1.9 billion last fiscal year.
Data centers are not new, but AI data centers are larger and consume more electricity. A Gallup survey in March this year showed that about 70% of Americans oppose building data centers in their own areas.
The AI and tech industries have noticed the deterioration of their public image. Microsoft President Brad Smith pledged to be a good neighbor to communities hosting data centers. Meta announced earlier this month the establishment of a $1 billion 'Future Belongs to Everyone Fund' to support communities hosting its data centers. Trump also revealed that he will meet with AI industry leaders next week.
