AI backlash threatens trillion-dollar data centre boom, say tech leaders

Tech industry leaders believe that growing anger over the development of AI is threatening to derail the most expensive infrastructure build-out in history.

AI company executives speaking at the FT’s Future of AI summit on Thursday said they have fuelled opposition to the construction of AI data centres, leading regulators and politicians to consider ways of stalling the rapid build-out of AI infrastructure.The US midterm elections — in which voters elected anti-data centre governors in Texas, Georgia and Ohio and passed 38 local votes in favour of restrictions on their development — have forced the tech industry to reflect on its failure to connect with the public.

“The reason is not that people are Luddites . . . it’s much like the protests against the masks in Covid. It has become a political symbol,” said Vik Bajaj, co-chief executive of the Jeff Bezos-backed AI start-up Project Prometheus.

“As a profession, we have spent two years pretty dangerously telling people that AI will change the future of work for the worse — that they will be out of jobs, that their children will be out of jobs, their grandchildren will live in a world that’s unrecognisable. And then for the last year or so, we’ve also been flirting with the idea that it’s an existential crisis.”

“I think this election was a big wake-up call . . . to take a pause and think about what’s happening and approach this in a way that’s maybe a little more thoughtful,” said John Hanke, founder of Niantic Spatial, the AI world model company and gaming group that made Pokémon Go. “It’s been go, go, go, build, build, build, and some of that has been . . . with head buried in sand.”

AI labs and Big Tech groups have committed to spending trillions of dollars over the coming years on computing capacity, believing this is needed to meet the growing demand to use AI models and products. The vast spending has been met with criticism over how data centre projects compete for energy and water, as well as create pollution and other negative effects for local residents.
In response to such concerns, AI and data centre companies have sought to burnish their social credentials. OpenAI, Amazon and Microsoft said this year that they would no longer use controversial non-disclosure agreements with governments when pursuing data centre developments.

More than 200 companies, including the so-called hyperscalers such as Amazon, Microsoft and Google, have signed up to US President Donald Trump’s nonbinding “Ratepayer Protection Pledge”, which aims to ensure that electricity costs associated with data centres are not passed to the consumer.

Executives at data centre and energy companies said that they had to get better at community engagement, which could make or break projects.

“If you’re not able to manage the relationship, if the communities don’t benefit from these investments — like truly benefit from these investments — you are going to face opposition,” said Jeff Gustavson, the head of Chevron’s new energies division.

“In 2009 . . . nobody knew what a data centre was,” said Adam Eaton, chief executive of the UK-based Virtus Data Centres. “Customers wanted us to be secretive, so we were. We didn’t have numbers on our buildings, no logos on our buildings . . . AI has really driven the exposure of data centres in the market. It’s incumbent on us as an industry to work harder to educate the communities.”

Other industry figures questioned whether opposition stemmed from data centres being the physical manifestation of AI, at a time when many people are concerned about how the technology could eliminate jobs or lead to catastrophic outcomes for humanity.

“We sort of only have ourselves to blame in a way,” added Verity Harding, former head of global policy at Google’s AI arm DeepMind and director of the AI and Geopolitics Project at the University of Cambridge.

“With data centres . . . I know people have real concerns about them, but is it that or is it that they’re just the . . . tangible thing that you can vote against and can stop?”

Additional reporting by Cristina Criddle and Rachel Millard in London