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.
00:19:42 · Erin Griffith, Ezra Klein
[00:19:42] S4: Or irrational. [00:19:43] S2: Is investing too much in data centers because they don't wanna be the company left behind, but that might lead to, say, the end of Oracle as a existing American corporation. Yeah. And a situation in which the CapEx investment is externally paced such that some of, like, the... Particularly the more fly by night players that are beginning to emerge who could really, really collapse easily, either don't get off the ground or can't keep going. The... You know? And and similarly, a situation where players like Anthropic and OpenAI focus more on diffusion and making what they are deploying economically useful as opposed to racing each other to the notional goal of superintelligence. It... It's not obvious that that's bad for markets. Like a like a CapEx bubble is really bad for markets. Yeah. The... You create dangerous AI before you create economically useful AI is actually bad for markets. But in in a a kind of slightly more sober sense, what markets need is a kind of alignment between how fast a build out is happening and how economically useful the product is, and thus how quickly it is adopted. Not at all obvious to me that a slowdown in data center construction from where we are right now is bad for that.
00:21:03 · Max Read, Ezra Klein
[00:21:03] S1: Yeah. Let's talk about tech billionaires. This is sort of the third category of antitech sentiment that I've seen pop up throughout this election season, and it came up quite often, on Tuesday in some of the the victory speeches. We have Talarico effectively calling out Elon Musk, which is something he did many times over the course of the election cycle. Ezra, I'm wondering if you think that the amount of money that Elon was pouring into this election, because he poured in a lot of it, was counterproductive to him in some sense, because it gave politicians like Talarico a a foil to play against. [00:21:35] S2: Hugely counterproductive. So so think about what that money is buying. That money is attempting to buy attention. But this... The sheer size of that money and its attachment to, like, Elon Musk himself, who's, like, an attentional super object, it did get attention. And the attention it got was that Elon Musk is trying to buy the election, buy it from you, and specifically buy it in Texas. And does Ken Paxton... Did Ken Paxton want one of the central themes of the closing weeks of the election to be Elon Musk is trying to buy the election. Like, there's broad anti billionaire sentiment. You know, you you you can poll this. Like, people really don't like billionaires. There's specifically negative Elon Musk's sentiment. I was a little bit surprised actually that in California, the wealth tax proposition didn't pass. In California [00:22:27] S1: I wanted to... Sorry. No.