00:13:55 · Erin Griffith, Max Read
[00:13:55] S4: Well, I think there's two groups, though. There's, like, the there's, like, the kind of employees that that are very worried, like, you're talking about, especially at places like in... At the labs. And then there's the the the investors who I spend a little bit more time with, and they're not so worried about the existential risk kind of piece of it, and they're more... They think that... They don't think it's inevitable because they worry about regulation. And so that's like... And they worry about not having the data centers and the and the compute. And, like, so they're kind of on the on the flip side of that a little bit. [00:14:26] S1: Yeah. Let's talk about data centers for a second. So Tuesday night, near total route for data centers on basically every level. Nearly every local referendum went against them, but also a bunch of the states that have been building the most intensely. Democrats took control often on anti data center platforms. But I'm still sort of trying to figure out how big a deal it is because there's a certain amount of, like, it's not necessarily as salient as tariffs, affordability, as Iran, as immigration, but it also clearly animated voters all year. So I'm wondering how big a driver do you think the data center issue was of these results?
00:14:26 · Max Read, Erin Griffith
[00:14:26] S1: Yeah. Let's talk about data centers for a second. So Tuesday night, near total route for data centers on basically every level. Nearly every local referendum went against them, but also a bunch of the states that have been building the most intensely. Democrats took control often on anti data center platforms. But I'm still sort of trying to figure out how big a deal it is because there's a certain amount of, like, it's not necessarily as salient as tariffs, affordability, as Iran, as immigration, but it also clearly animated voters all year. So I'm wondering how big a driver do you think the data center issue was of these results? [00:15:03] S4: I mean, it was interesting because last week, we talked about how it was, like, you know, ranked in the bottom maybe five out of, like, 30 some issues when you're asking voters, like, what they care most about. But it's clear as you're as you're describing that when asked on a binary yes or no question, the answer is absolutely not. And so whether or not that drove people to the polls, Ezra, you probably have a lot more info on that, but it's obvious that it's, like, going to be continuing to be an issue.
00:15:33 · Ezra Klein
[00:15:33] S2: Yeah. I I think it was spiky. So in states where there is a ton of data center build out happening, so, you know, states like Texas and Ohio and Georgia and Arizona, it was a really big issue. Yeah. I think you have to look at the Texas results, and Texas is a place in the country that's been building the most data centers. They were the most vulnerable. It was a huge part of the campaign, particularly in the governor's race, and it worked. I mean, it it was just a huge wedge. And it's a wedge that I think very importantly doesn't split, like, doesn't polarize normally. You can win over Republicans that way. But you just... You look at that list, Texas, Ohio, Georgia, and Arizona, those are just all states where Democrats performed really, really well. And in Ohio, in particular, they really went at Ramaswamy and Husted, the the Republican gubernatorial and and senate candidates on the data center issue. I think what you see here is, like, I don't think data centers were a huge part of the Alaska race. Yeah. But in the place where they're building a lot of them, it really mattered.
00:16:32 · Max Read, Erin Griffith, Ezra Klein
[00:16:32] S1: Yeah. That... That's interesting. And it does feel like there's going to be a big shift in how we think about the build out. It doesn't necessarily mean, you know, a a full sort of cessation of data center build out, but it's gonna take more time, and it's gonna be moving to other states. Maybe Louisiana, maybe Oklahoma. Erin, I'm wondering how you think this is gonna play out among the VCs and investors you talk to, like how they're changing their plans or thinking about thinking about it differently now. [00:16:59] S4: I mean, I think in general, investors are a little bit terrified by the results, particularly in Texas when, you know, I I was watching the all in feed last night. And as the Texas [00:17:10] S1: As you do as you do every Tuesday [00:17:12] S2: night. And
00:17:12 · Ezra Klein, Erin Griffith, Max Read
[00:17:12] S2: night. And [00:17:14] S4: the Texas the Texas governor race was the one that they they seemed most upset about. There was this kind of, like, cope moment of, like, oh my god. Well, that's... They're they're only reporting the the liberal... The, you know, the the Blue District so far. Like, we still have a chance because they they know that, you know, of the sort of 45 gigawatts or so of total compute that's... Or of energy that's supposed to come online next year, 10 to 15 gigawatts of that could be now in in danger of not coming online because it's in Texas because, you know, they all expected that the moratorium that was put on for building data centers in Texas up through the elections would just be, you know, removed, and they would all go back to building, and everything would be great. And so this is going to slow down a lot of the AI development. This is going to make capacity... Compute capacity much more constrained and ergo much more expensive. And it's going to sort of hurt the growth, not just of the frontier labs that need the compute, but of all the ecosystem of companies that are sort of playing into the quote unquote AI trade, all of the kind of chips and neo labs and and cloud resellers, all of that. So, you know, that is potentially going to hurt this kind of bull market that we've been on for a long time. So so so they're, like, getting a little bit dramatic about that. I... You know, I've I've heard there was a little [00:18:39] S1: bit No. Investors getting dramatic. I don't
00:18:39 · Max Read, Erin Griffith, Ezra Klein
[00:18:39] S1: bit No. Investors getting dramatic. I don't [00:18:41] S4: think there's a little catastrophizing, like, you know, no less than, like, the entire market's gonna tank. The economy's in the in the shitter. Like, we're... China's gonna win. We're... All of that. I I think I even saw a tweet. Beff Jezos, the, you know, the kind of Internet personality tweeted that this is the end of Western civilization. It's time to move to space, which is where the data centers were moving anyway. [00:19:03] S2: So Gotta gotta gotta gotta get that space real estate. What I thought was interesting about this, I was hearing some of this from from investors too, and then the the Nasdaq futures were down. And then it's like the market opens up on Wednesday morning, and it bounces up. And so first, create them... Like, the market doesn't think this is so bad, but but a a good contrarian take I've seen floating around a bit is that this might be good for investors because I do think there's a widespread suspicion that there is a a kind of a collective rationality problem happening right now where [00:19:42] S4: Or irrational.