How data centers actually work

Lauren Goode: Well, they’re all interested in growing more. Who among us, Mike? But the term hyperscalers refers to this category of large technology companies or cloud service providers. So Meta, Amazon, Microsoft, Google, they all fall into this category.

Molly Taft: Yes, and I think it’s important to remember that these companies have a lot of money and have the ability to raise capital like no other. So they’re able to do some really crazy things for quick builds and really big builds. And they’ve gotten very creative, because now their goals are to build these things quickly and get them up and running so that they can use this physical infrastructure to compete with each other.

Lauren Goode: I think that’s true, Molly. I think there’s a lot of enemy building going on right now, and I’d just love to be part of their group conversations 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. Obviously, in order to build a giant data center somewhere, you have to have the political will to do so, which means you need the approval of local residents, the local government, the state, and the country. So, what’s going on in the political sphere with people who want to build more data centers and people who oppose regulation? How is it done?

Molly Taft: That’s a great question, and I think if you look at the national conversation, it’s very different from what’s happening at the local level. You have Washington, and you obviously have an administration that is very friendly to the idea of ​​an American AI empire. Importantly for energy conversations, the way the Trump administration dealt with this was by subsidizing fossil fuels. They really want all data centers to be powered by oil and gas, and a little bit of nuclear and coal. This works great for those industries as well. If you’re going to have this massive expansion in energy demand, it’s really great to be in the middle of that and be the person that everyone wants to turn to for energy resources. And on the flip side, there’s been an outpouring of local opposition to these data centers for a variety of reasons, whether it’s water use, concerns about rising electricity prices, noise, and some really big conflicts that have pushed this issue into the national dialogue. I’m thinking of XAI in Memphis. When Elon Musk wanted to power XAI, he installed a set of unlicensed gas turbines to power XAI that he installed in a majority black community in Memphis that already had serious problems like air pollution and asthma. These people made themselves known. Earlier this year, there was an attempt in D.C. to impose a ban on any government regulation around AI at all. It was an incredibly broad inclusion in the big, beautiful bill that ultimately didn’t work out. But one of the people who publicly opposed it was Marjorie Taylor Greene, who actually mentioned data centers in her opposition, comparing AI to Skynet, the fictional AI from the Terminator film series. So, this creates some strange bedfellows in alliance with each other, and I think that’s kind of a contradiction between what the administration is trying to push forward and some very powerful energy companies that are going to benefit from it, versus some real grassroots local movements and people who are concerned about the impacts of what these things are going to do in their communities.