00:02:54 · Sean O’Kane
[00:02:54] S2: Yeah. I mean, I think this was a narrative that really started to take root on election eve. And then also in the days since, there are a number of... I mean, well, first off, let's talk about the fact that one of the biggest, you know, data center builders was also the largest donor to the Republican Party, Elon Musk, And, you know, seems to have gotten basically nothing out of donating $500,000,000, maybe even more by the time we see the final count. And in fact, is now sitting there with all of his businesses in a state that has remarkably turned about as blue as it could possibly turn for the first time in a very long time. So that, I think, is, like, the biggest thing hanging above a lot of this discussion. But, you know, there were also a bunch of ballot measures up around the country for... You know, that would have paved the way for data centers to get built faster. Almost all of them got shot down or voted against. And and so there's just this question now of when you have new leadership, Democratic leadership who has tended to say it wants to pump the brakes on, and we can talk about, like, sort of the spectrum of what that's gonna mean. Right? Like, some people really don't want any of this. Some people just want a bit more caution and a bit more information before things get built. With them in power, you know, there is a consensus view that in the... At least in the tech world, that this is going to mean we have a lot of roadblocks ahead for data centers, especially in places like Texas where, you know, folks like the the governor elect, Caneosa, is... You know, has spoken pretty openly about this being a campaign promise and something that she wants to focus on. So, yeah, it's it's the thing that I think the tech world is maybe a little too focused on. I'm curious what you guys think about that, but it's certainly focused on coming off of Tuesday.
00:04:53 · Anthony Ha
[00:04:53] S0: I don't necessarily think that they're too focused on it, but I understand maybe why it would feel a little bit disproportionate because the amount... You know, the the data center ballot measures, certainly, there were a number of them, but, you know, it wasn't something that was on the ballot everywhere. And in different races, the the dynamics might have been a bit different, but there was this sort of undercurrent and sense that it was... It it seems to be an issue that reaches across the country that is bipartisan in a lot of ways, but that the Democrats had seemed to have been more effective at harnessing, you know, that energy. And, of course, there's probably all kinds of reasons why the Democrats did so well on Tuesday, but it does seem like sort of anti AI and especially anti data center sentiment was a big part of it. And and that seems like a pretty potent political force that is much as... You know, I I suspect, yeah, like, the next two years potentially beyond that are going to be more difficult for tech companies in general and kind of hyperscalers, data center companies in particular. I also imagine that they have to be a little bit worried about, well, also... Like, is this going to continue to be an issue not just with the people who got elected this year, but potentially in 2028 and beyond?
00:06:13 · Kirsten Korosec
[00:06:13] S1: Yeah. Absolutely. I don't think that the data center issue is what brought everyone to the polls and led to the, quote, unquote, blue wave. However, I will say that data centers have been an increasingly grassroots issue that depending on localities, in part because how hyperscalers and companies have gone about getting these data centers very secretive, oftentimes requiring NDAs of elected officials or appointed officials, not sharing information about, you know, the scale of a project in in very environmentally sensitive areas, including in the Southwest where there's very much a water scarcity issue. So I think that a lot of folks, Republican independents and Democrats, all saw this as wrong, and so they were motivated by it. But I don't think it was a singular issue. But now here's the interesting thing. There was a lot of, like, waving of hands about how we can possibly operate under any other circumstances, and we're already seeing companies like OpenAI all of a sudden go, oh, actually, we can change our policies. They just released what they call a compute campus policy blueprint, and guess what? They're not going to require NDAs anymore. They're going to share, you know, their plans and, you know, supposedly operate in less secrecy. And so I think what this shows is that when you put up either a regulatory certainty in the marketplace or at least signals of going in that direction, then corporations will respond. If you don't do that, they will not necessarily do the thing that we hope that they will do.
00:07:49 · Anthony Ha, Kirsten Korosec
[00:07:49] S0: Right. One thing I wanna emphasize from what you were just talking about is that part of what that's doing beyond laying out these policy changes is also an attempt to rebrand data centers because they have become such a toxic phrase. And so they're not data centers anymore. They are are compute campuses. And and I'm curious, you know, whether either of you think that'll take. I will also mention that one of the other very small effects of the election that I think is gonna vindicate a prediction I made on Equity a couple weeks ago is this whole, like, super intelligence term. I think that's going away because I don't think any AI executive is going to be particularly inclined to follow Donald Trump's executive orders, like, right now. So I feel like my prediction is gonna be vindicated very shortly on that front. [00:08:37] S1: I think you just got an endorsement from, you know, one of Sean's pups there.
00:08:37 · Kirsten Korosec, Sean O’Kane
[00:08:37] S1: I think you just got an endorsement from, you know, one of Sean's pups there. [00:08:42] S2: From my dog. Yeah. I mean, like, no. Listen. Compute campuses are where the super intelligence is made, Anthony. Don't you see how this all comes together? This is just the way it works now. Yeah. I mean, this is ridiculous. Like, come on. Like, it... It's not gonna change anything. It's gonna cause them more effort. For a company that likes to say that it's no longer focused on side quests, OpenAI still loves to go in different directions a lot. And this is just like the latest kind of thing where it's just like, why are you spending time on this at all? You know, it doesn't really seem like it's going to move the needle. They have other fish they need to fry. Like, it's just... I felt like such a waste of time to try and, like, make people think [00:09:26] S1: of this. Great idea for OpenAI because in the spirit of making threatening things seem cute, they should 100% create, like, compute campuses, like avatar cutesy thing, and then just present that, you know, instead of, you know, a power energy sucking, water sucking data center.
00:09:48 · Anthony Ha
[00:09:48] S0: I'm sure that's that's gonna happen anytime soon now. I mean, they could also, like, build more of their own offices. And if these are just com... Lovely compute campuses, they should just build their own office... The offices there or work next door, see how that works out for them. I I think it's something else that I'm wondering about is it... To what extent the election is also maybe, like, just this... Actually, kind of the the second part of, like, a one two punch of something that I think we alluded to last week, but but kind of became a little bit clearer shortly after we we recorded, which is also that there's just been this, like, reshaping of how... Or a big shift in how Wall Street is reacting to a lot of these hyperscalers and AI companies in this sense that they're not excited about the idea that, you know, they should be spending all this money building new data centers, spending all this money on compute. And so in a sense, there's now a financial incentive not to build all these data centers. And so I'm I'm very curious how that's gonna play out, that there's regulate... That probably it's gonna be harder to build data centers. Wall Street is probably not gonna reward you for building data centers, but at the same time to get to the scale that they want to get to, they're probably going to need to build data centers somewhere.