Will Hild: Big Tech Forgot the Consumer in the AI Data Center Race

Consumers Research Executive Director Will Hild argues that Big Tech has failed to address local communities’ concerns about the rapid expansion of AI data centers. He says companies should engage with residents in good faith and provide tangible benefits, including investments in energy, water, education, and local infrastructure, rather than relying on tax breaks and promises of economic growth. Hild also warns that unnecessary opposition to data centers could undermine America’s leadership in the global AI race.

Listen Below:

Full Transcript:

Pete Mundo: Will Hild, Executive Director of Consumers Research, joining us right here on The Guy Benson Show. I’m Pete Mundo. I do mornings on KCMO Talk Radio in Kansas City. It’s a big issue out by us, and it’s a big issue all around the country. So, Will, when you say the industry forgot about the consumers, how and why?

Will Hild: Yeah, I think they came to the issue of data centers with somewhat of a sense of entitlement and condescension. Obviously, data centers are the digital infrastructure that allows most of modern life in America to exist. We are using a data center right now to communicate and have this conversation.

So they kind of came to the table with that sense of looking down on Middle America or the average person’s concerns around data centers. And so I think that’s a big part of the reason why this has become such a big issue: Big Tech has done such a bad job, both articulating the benefits of data centers, but more importantly, meeting people where they are with their concerns, trying to answer them legitimately in a non-condescending way, and then making sure that they are providing benefits not just to the overall quality of life in America, but to the localities where they’re building these things.

So things like energy infrastructure, water infrastructure, building schools, firehouses, and police departments–that kind of thing. When they move into an area, I think that would have gone a long way to prevent the problem that we’re seeing now.

Pete Mundo: How much of it, too, is, as we’ve discussed on this show, this K-shaped economy that continues, where the haves are growing, the have-nots are unfortunately shrinking and losing and not keeping up with the economy where it currently is right now?

And there’s this boogeyman out there of AI that’s going to take all the jobs and everyone’s going to be out of work. How much has that narrative also consumed the conversation, right or wrong? And the industry’s done seemingly nothing about it.

Will Hild: Yeah, that’s a great point, and it seems like a lot of the cutting-edge, frontier AI companies are throwing gasoline on the flames of that concern.

I think what they’re doing is really pitching their book when they talk about how dangerous their models are or how many people it’s going to put out of work. I think they’re actually trying to brag about how powerful what they’ve developed is. I don’t think any of that is true. I think that’s a lot of hype.

But the average person could be absolutely forgiven for thinking, “Well, why would I want AI? Why would I want data centers if all it’s going to do is threaten national security and put me out of a job?”

And I think the people who’ve been in charge of explaining the benefits of AI have done an absolutely horrible job of it. I’ve seen AI create jobs, and even in our own operations at Consumers Research, I think it’s actually going to make people’s lives much better. But you wouldn’t know that even from the commercials that companies like OpenAI and Anthropic are putting out. They raise some of the same scary issues that frighten people.

So I think you’re 100% correct there. I think people hear about data centers and they think about AI, and they’re thinking, “Well, why would I want that?” They’ve done such a poor job of helping people understand the potential benefits.

Pete Mundo: Now, what about the idea that the big tech giants of today are kind of the robber barons, so to speak, of the 21st century? And it’s kind of a way to stick it to them. Once again, it’s not stopping anything in the grand scheme of things, but it’s a feel-good approach.

So is there something that the industry should specifically be doing if they want to open up a data center outside of where I’m at in Kansas City? There’s a lot of that going on. You have local communities fighting these things. What can these companies do? Because a lot of them are just kind of faceless corporations that exist in the cloud, no pun intended.

Will Hild: No, you’re 100% correct. And they didn’t do themselves any favors during the Biden administration and “woke one,” as AOC called it, by siding with the radical left and attacking a lot of Middle America, or what they often refer to as flyover country. So people are rightly somewhat snake-bit dealing with Big Tech.

What I think they can do is come to the table, recognize the legitimacy of people’s concerns, even if they’re based on inaccurate understandings of how data centers work or what effects they may be having in their community. They need to not have a condescending attitude when they address those concerns and meet them in good faith.

The second thing is they need to make sure that they are benefiting the communities that they’re putting these data centers in. It’s not enough to just say that it’s good for, broadly speaking, the country, because people hear that and they know that these companies a lot of times only care about Silicon Valley or New York and Wall Street and what it does to their share price.

They need to make demonstrable, material benefits materialize in these communities. They need to invest in energy infrastructure, water infrastructure, education infrastructure, and they need to make sure that the jobs that they’re claiming they are bringing into the community are actual American jobs.

That’s a whole other issue we probably don’t have time to go into, but sometimes people hear “Big Tech jobs” and they think, “Yeah, I’ve been told that before. I know what that means. That means H-1Bs coming from a different country.” So all you’re really talking about is bringing foreigners into my town to work at these data centers.

They need to be able to meet those questions earnestly, honestly, and make sure that they can express in material ways how it’s going to benefit these local communities.

Pete Mundo: How do these local communities–and Will Hild is joining us here on The Guy Benson Show, and his article is really, really well written on FoxNews.com about how data centers forgot about the consumer, really, in this AI race. He’s the Executive Director of Consumers Research–how are these local communities in more rural settings actually benefiting when you factor in a lot of the incentives and tax breaks that also come along with these projects?

Will Hild: Well, you know, some of them have gotten tax breaks. Some of them haven’t. And I would argue that, honestly, if a data center goes into an area, it should increase the tax base of an area, not decrease it.

So I would not be in favor of providing them such a tax cut that they don’t actually increase the tax revenues of the area. You’ve had instances like in Loudoun County where they’ve built a whole ton of data centers, and it’s actually reduced–I think it’s paying about 40% of the property taxes or the revenues for that county. And they’ve been able to reduce people’s taxes because of these data centers.

The entities getting tax cuts shouldn’t be the data centers; it should be the people around the data center. They should materially make people’s lives better off in those areas. And if they did that, I don’t think they’d be seeing the opposition that they now meet today.

Pete Mundo: Well, yeah, to your point, though, and we’ve seen a lot of this out here in the Kansas City area, these communities are competing for these data centers, so they’re offering up some of these incentives and tax breaks. And that’s becoming a rub in it as well.

But what do you hear from the officials in communities around the country? They say, “Well, if we don’t do it, someone else is getting them. So we got to get them in here. And eventually, the money is going to flow our way.” Of course, defining “eventually” can be difficult to do with these packages. But that’s the claim.

So are you seeing that in other parts of the country as well, or is that maybe unique to what we’re dealing with here?

Will Hild: I haven’t heard a ton of cases of that. Obviously, that’s something that communities from across the country and states from across the country have historically done to try and attract different corporate headquarters or factories into their area.

In general, I think that’s a loser’s bet. I think these entities, these data centers and these Big Tech companies, are hungry enough to put these data centers in. They ought to be bringing something to the table, not just demands from the local community for tax cuts or deregulation or that kind of thing.

I’m obviously for lower taxes because that puts more money in consumers’ pockets generally. So this isn’t a screed against tax breaks in general, but I think a specific tax break for one of these data centers would not be the best way to approach it.

They are hungry for land, for access, for communities that they can build these in. And I think that if that wasn’t the case, then they wouldn’t really care what the opposition was. If all these communities were clamoring to give them tax breaks, I don’t think they’d be as worried as they are about the massive amount of opposition that they’re now receiving.

And I think, frankly, rightly so. I mean, sometimes it’s based on a false understanding of what data centers do and the effect they would have on their communities. But I think the attitude that these people have come to the table with has contributed greatly to the opposition. And expecting tax breaks would be a perfect example of that.

I don’t think they should get tax breaks. They should be explaining to the local community how they’re going to make their taxes cheaper or add to their local infrastructure.

Pete Mundo: What about the energy side of this and the water side of this? It seems like some of that gets overblown at times, but some communities obviously fear, “Hey, our electric costs may go up because the grid is going to be strained.” What’s the answer on that front around the country?

Will Hild: Yeah, that’s an area where I think Big Tech has done just an absolutely poor job, in particular, of meeting people without condescension and explaining what is actually going on.

So let’s take the water, for example. There certainly have been, I would say, “bad data centers” in the past that have used evaporative methods to cool the data center, meaning they pump water in and then they put heat in it and then the water evaporates and takes the heat away.

That is not the way most data centers in America are built today, not just because of the environmental and the water-use concerns, but also because it’s just extremely expensive to be using water that way.

The ones built today, by and large, are closed-loop systems. Water neither goes in nor goes out unless there is some sort of leak, in which case, I can assure you, they want to fix that very fast before they lose tons and tons of their server racks.

So modern data centers today don’t use water any more than your pool uses water by just existing–by just being filled up, and then it’s done.

In terms of electricity, again, people could be forgiven for seeing these data centers as something that’s increasing their electrical costs because, for years, Big Tech was on the side of pushing net zero, which was a part of ESG that was extremely expensive to consumers, raising costs across the board.

And they did this because it made them look better in the eyes of Wall Street. Well, now that AI is created and we need a lot more energy, suddenly they flip the switch and they suddenly want people to be pro-data center and pro-energy use, and they haven’t explained to people that the infrastructure that they’re investing in is actually going to lower their energy costs.

Because these data centers are such energy hogs, these same companies that are building the data centers are investing a ton of money in new energy, bringing it online to the grid, because they know that the existing grid infrastructure can’t support it.

So again, communities should demand that. When a data center comes into the area, it shouldn’t be, “How can we serve the data center?” It’s, “How can the data center add to our energy infrastructure and our water infrastructure?”

But those are two concerns that I think are somewhat overblown.

Pete Mundo: And then, last thing, we’re seeing states around the country–red states to blue states to purple states–all, in some cases, putting moratoriums in place and just slowing down the process of building these data centers.

Does that put us at risk as a country, or is this the right move to make sure all the parties involved are comfortable with these data centers coming in?

Will Hild: Yeah, I do think there’s a significant danger here. And I want to be clear: I’m not suggesting that people in communities who have objections or questions about these data centers should be shouted down with accusations of being Iranian assets or Russian assets or Chinese assets.

That said, we are seeing some of the same tactics in the blue states to attack data centers that we saw attacking oil and gas and coal and energy infrastructure during the ESG and Net Zero movements.

As those things collapsed after the Trump administration took power and a lot of that stuff dried up in terms of support on the left and in corporate America, what you saw was they shifted to this anti-growth, degrowth mentality around data centers.

And I do think that there has been foreign influence in a lot of that. There’s nothing China would love more to see than for us to shoot ourselves in the foot in the AI race.

So, to be clear, I don’t think that people’s local concerns should be shouted down or claimed as some sort of national security threat. But I do overall think it’s a real problem for the future of our country and our leadership in this technology and world security, and our own national security, if we don’t figure out this issue.

Which is why I particularly wrote this op-ed, because a large part of the fault for this problem lies at the feet of Big Tech, not the people who have questions around data centers in their area.

So I’m hoping that Big Tech will hear this and fix the problem, because I do think that this technology is going to be revolutionary for our economy. It’s going to bring benefits to people of all economic backgrounds, but we have to address the concerns earnestly and humbly and still find a way to move forward in technology.

We can’t go full Luddite. We can’t embrace the anti-growth, degrowth mentality the way the left wants, but these Big Tech companies do owe people in those communities an answer for these questions.

Pete Mundo: Will Hild is the Executive Director of Consumers Research. His article is on FoxNews.com. Check it out. He does great work. “Data centers forgot the consumer, and that could cost America in the AI race.”

Will, great to have you on the show. Thanks for being here.

Will Hild: Thanks for having me.