Jasmine Sun on What the AI Industry Got Wrong About the Public Backlash
Jasmine Sun discusses her reporting on data center opposition in the Midwest, revealing that backlash against AI infrastructure is driven by distrust in corporations and government rather than misinformation, and that this opposition is uniquely intense compared to other industrial projects. She argues the AI industry failed to make a compelling case for why society needs AI development, leaving communities skeptical about accepting significant local costs.
Summary
In this episode of the Odd Lots podcast, Jasmine Sun discusses her investigation into data center opposition in Michigan and Wisconsin. She conducted a road trip through the Midwest to understand why communities are rejecting AI data center projects at remarkably high rates (roughly 70-30 opposition in both Democratic and Republican areas).
Sun found that contrary to expectations, anti-data center activists were generally well-informed about technical details like cooling systems and the differences between AI hyperscale and traditional internet data centers. The opposition stems primarily from deep distrust in corporations and government institutions rather than from misinformation. Communities remember broken promises from companies like General Motors and Foxconn, which have made residents skeptical of corporate commitments regarding job creation and tax benefits.
The pitch for data centers is almost entirely centered on property tax revenue, which is diffuse and hard for residents to grasp. While data centers do generate significant tax income (Microsoft's Mount Pleasant facility is projected to pay $20 million annually by 2026), the permanent job creation is minimal—often just 50 positions compared to hundreds during construction. Construction workers are frequently from out-of-state, limiting local benefit. Crucially, people simply don't perceive AI as essential to their lives in the way they view car manufacturing or energy production.
Sun notes that data centers face more intense opposition than solar farms, nuclear plants, or battery storage facilities—industries that also have environmental concerns. This unique opposition appears tied to public skepticism about AI itself and the expedited, secretive approval processes used for data center projects. She observed that even among construction workers and trades people benefiting from the work, there's skepticism about whether the AI boom is sustainable, with several expressing concerns that AI is itself a bubble.
The power asymmetry between small towns and massive tech companies creates additional friction. Saline, Michigan, a town of less than 3,000 people, voted against the OpenAI and Oracle data center project, only to be sued for exclusionary zoning, forcing them to settle. Communities recognize that small-town city councils cannot effectively negotiate with well-resourced legal teams from hyperscalers.
Sun argues that state-level moratoria (like those by governors Kathy Hochul and Greg Abbott) could address power imbalances by establishing baseline standards for environmental protections, community benefits, and tax arrangements at the state level rather than forcing individual municipalities to negotiate separately. This could streamline the process for developers while protecting communities.
The conversation touches on how the AI industry's focus on discussing job displacement and existential risks has blinded executives to the immediate, material impacts AI is having on communities through data center construction. Executives have only recently begun adjusting their messaging after realizing that emphasizing job loss makes the public unhappy about AI development.
About this episode
<p>Within the AI industry, even the builders of it have been very anxious about the technology. They've talked for years about its potential to create destabilizing job losses. They even spend a lot of time thinking about rogue AI that could lead to human extinction. But for all their anxiety, they missed the thing that's become the most publicly salient: how upset people would be about building data centers. Part of this was understandable. Data center construction has been happening for a long time in America, and it used to be relatively uncontroversial. In fact, cities and states would often design their tax code to incentivize data center construction. Now there's this complete 180. On this episode, we speak with independent writer and Substacker Jasmine Sun, who recently traveled to Wisconsin and Michigan for some on-the-ground reporting about the communities and activists trying to stop data center development. She explains what the pushback is really all about, what it represents, and what future developers will have to do in order to be welcomed in.<br /><br />Come see <a href="https://events.bloombergevents.com/event/ODDLOTSLA/summary">Odd Lots live in Los Angeles</a>, get your tickets now.</p> <p>Read more:<br /><a href="https://www.bloomberg.com/news/articles/2026-08-19/anthropic-tied-data-center-inks-1-3-billion-private-credit-loan?utm_medium=referral&utm_source=podcast&utm_campaign=odd_lots&utm_content=article">Anthropic-Tied Data Center Inks $1.3 Billion Private Credit Loan</a><br /><a href="https://www.bloomberg.com/news/articles/2026-08-18/pennsylvania-governor-shapiro-puts-guardrails-on-data-centers?utm_medium=referral&utm_source=podcast&utm_campaign=odd_lots&utm_content=article">Pennsylvania Governor Josh Shapiro to Limit New Data Centers</a></p> <p>Only <a href="http://bloomberg.com/">Bloomberg - Business News, Stock Markets, Finance, Breaking & World News</a> subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at <a href="https://www.bloomberg.com/subscriptions/oddlots?in_source=oddlotspodcast">bloomberg.com/subscriptions/oddlots</a></p> <p><a href="http://bloomberg.com/subscriptions/oddlots">Subscribe to the Odd Lots Newsletter</a><br /><strong>Join the conversation:</strong> <a href="https://discord.gg/oddlots">discord.gg/oddlots</a></p><p>See <a href="https://omnystudio.com/listener">omnystudio.com/listener</a> for privacy information.</p>
Key Insights
- Data center opposition is uniquely intense compared to other industrial projects like solar farms, nuclear plants, and battery storage facilities, despite similar environmental footprints, suggesting opposition is tied to skepticism about AI itself rather than industrial projects generally.
- Anti-data center activists in the Midwest were surprisingly well-informed about technical details of data centers but opposed them primarily due to distrust in corporate and government promises, informed by experiences with companies like GM and Foxconn breaking commitments.
- The economic pitch for data centers centers almost entirely on property tax revenue, but this benefit is diffuse and hard for residents to grasp compared to the tangible local costs of construction, noise, and traffic over years.
- Data centers create minimal permanent jobs (often around 50) despite hundreds of construction jobs, and construction workers are frequently from out-of-state, limiting the promised local economic benefit to communities.
- Communities are skeptical that AI technology is essential to their lives, making them unwilling to accept significant local costs for data center development, unlike their acceptance of manufacturing facilities or energy infrastructure.
- Even construction workers and trades people employed by data center projects expressed concerns that AI is a bubble, indicating widespread doubt about the sustainability of the AI boom even among those benefiting economically.
- Small towns face severe power asymmetries when negotiating with hyperscalers—Saline, Michigan was sued for exclusionary zoning after voting against a data center project, forcing settlement despite democratic opposition.
- State-level moratoria on data centers, rather than local negotiations, could establish baseline environmental and community benefit standards that would both protect communities and streamline development by eliminating individual negotiation processes.
Topics
Transcript
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