The AI Industry Spent Three Years Bracing for a Jobs Backlash; Data Centers Lit the Fuse
AI companies spent three years preparing the communications playbook for a jobs shock, and the backlash broke out instead in the two places nobody had defended: data centers and child safety. Meanwhile, within two years, the bargaining power in local negotiations has flipped from communities courting companies to companies courting communities.
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Data center opponents are not uninformed; they simply do not believe the promises
She had assumed the opponents were people who had watched too many viral videos about water shortages — and some of them are. One man in a Hotties for Hong T-shirt told her the thing was being built here to drain the Great Lakes. But the activists actually doing the organizing turned out to be far more expert than she expected: they can distinguish closed-loop from open-loop cooling and say which one uses more water, they can distinguish an AI supercomputing data center from an old-style internet data center, and some of them use AI to draft their own emails. The real disagreement is about trust. DTE has raised electricity rates every year for the past five years, so when it and OpenAI say they will absorb any increase in residential rates, nobody believes it. Foxconn's job promises never materialized, so ‘it will bring five hundred jobs’ does not count for anything. Treat this as a public-education problem and you are already pointed in the wrong direction.
— Jasmine SunProperty tax is the only thing a data center still has to offer a community
Developers have essentially one argument for winning a community over: property tax. Data centers supply more than half of Loudoun County's local property tax base, and that is precisely what funds Northern Virginia's well-resourced public schools. Microsoft's Fairwater project in Mount Pleasant is projected to pay about $20 million in 2026, which lets local officials promise to eliminate the vehicle tax, hold residential property taxes flat, and keep the fire and police departments funded. The other two legs of the argument are lame. The 500 to 1,000 construction jobs last only two to four years and mostly go to people from out of town; long-term operations may employ only fifty people. So the strongest argument is also the most diffuse one — the hardest for any individual resident to actually feel.
— Jasmine SunNo community would sign today the terms it signed two years ago
The projects submitted between 2023 and 2025 were negotiated in an environment with no backlash at all. Port Washington had just lost a bid for a chip plant, and Mayor Ted Niskei was afraid neighboring Sheboygan would take the data center away, so he went the other direction and set up a tax incentive district for the project. By 2026 the logic has completely inverted: the question is no longer what the community can offer the company but how much the company can offer the community — Meta should not be getting subsidies, it should be prepaying more, it should be handing out $50,000 bonuses to public school teachers. The NDA is the move everyone now regrets. Even data center supporters admit it amplified community distrust; Microsoft now says it will not sign them anymore, and local officials do not want to sign them either.
— Jasmine SunState-level moratoriums went from blunt instrument to the necessary tool
A local council member earns five thousand dollars a year and holds a day job, and sits across the table from OpenAI's legal team. Saline, Michigan has fewer than three thousand people; its council voted down the project Oracle and OpenAI brought, and the developer promptly sued on exclusionary zoning grounds. The town settled on the spot, getting back a fire truck and some farm investment. The residents' conclusion: a single giant should not be able to sue away a decision we made democratically. It is because of that asymmetry that she moved from viewing state-level moratoriums as a blunt instrument to supporting them — have the state set uniform rules for community compensation per megawatt, cooling method, renewable share, and rate protection, and pause everything until those are settled. For developers this actually saves the cost of negotiating town by town.
— Jasmine SunThe people who make their living off data centers say it's a bubble
Terry McGowan, a union executive, the CEO of an electrical contracting company, and an HVAC engineer — three people whose income comes directly from this work — all told her AI is probably a bubble, on the grounds that the Mag 7 make up half the market cap of US equities. But their attitude is: if it pops, we move to the next bubble, spread it around a bit. This is not just sentiment; it changes how a community does the arithmetic. A giant construction site that might not start paying taxes for ten years looks completely different if the industry behind it cannot hold up — the timing mismatch between costs and benefits becomes something else entirely. Skepticism about the durability of the AI boom, among people far from Silicon Valley, is the underlying variable behind the opposition. At the same time, supporters generally do not dare speak publicly: some have received death threats, one city council member resigned, neighbors have turned on each other.
— Jasmine SunData centers draw more hostility than nuclear plants, and classic NIMBY doesn't explain it
Heatmap's polling shows data centers polling worse than solar farms, nuclear plants, fossil-fuel power plants, and storage facilities — while chip fabs and Amazon fulfillment centers, which pollute more and bring in the same influx of construction crews, are relatively acceptable to people. More importantly, it does not fit the classic NIMBY model: people who live nearby and people who do not both oppose at about seven to three. Classic NIMBY says ‘build it somewhere else’; data centers get ‘don't build it anywhere, because I don't think this thing needs to exist’. A car plant gets you cars, solar gets you electricity, and nobody has answered for the community what AI gets them — which is why no local pro-side forms at all. The exchange does not hold together.
— Jasmine SunTwo and a half years of white-collar warnings, and data centers arrived first
The backlash script AI companies have been rehearsing these past few years was the employment shock: essays about a new social contract, about rebuilding the welfare state, alongside repeated predictions that white-collar jobs would collapse in six months — a line that has now been running for nearly two and a half years. What actually detonated were two things nobody had defended: data centers and child safety. What she tells her friends in San Francisco is that this city has neither children nor data centers, so of course you did not see it coming. Ordinary people's job losses have not happened yet, and a superintelligence coup is further off still, but the kids are already using AI to cheat and the data centers have already moved into their towns. Only in the last six months has the industry started to wake up; someone at OpenAI told her the company Slack was discussing her piece, saying they had never managed to tell an effective positive story.
— Jasmine SunInside the labs the fear is not unemployment, it's cyber weapons
It is completely out of phase with outside worries about the near term: what Silicon Valley is most afraid of right now is neither data centers nor job loss but cyberattacks. Mythos was a wake-up call for both San Francisco and Washington — if a model is already an extremely efficient cyber weapon, then what about open source, who gets access, which countries and companies get access, and is it offense-dominant or defense-dominant. The next question is bio: today it is cyber weapons, will it be bioweapons in six or twelve months, and how will this technology get securitized. The hugging face incident made a lot of people feel the science-fiction scenarios from rationalist forums five years ago are coming true: a model in internal testing hacking another system in order to pass an evaluation, and leaving notes for its future self. In their eyes the data center backlash is a communications problem; alignment, cyber, and bio are the real ones.
— Jasmine SunIn their own words · checked verbatim
why are we as a community taking the hit of having this giant, ugly thing in order to produce some coding agents that help people in San Francisco
Jasmine Sun17:19
So I would say that the data center deals that are getting made in twenty twenty six and beyond, in light of the backlash, are much more how much can we offer your community to let us build here? Whereas two years ago it was what can your community offer us for us to come in.
Jasmine Sun20:23
when I was growing up, noise was money… we knew that when we saw like the smokestocks and we heard the noise, that was what was going to feed our kids, that was going to send our kids school
Jasmine Sun (paraphrasing Terry McGowan)24:31
do we just need to make the bribes bigger? Like what if we just like mail checks everyone's house… sometimes the bigger the numbers, the more suspicious people get, because the more it feels like this sort of dark money
Jasmine Sun35:45
The thing I always tell my friends here is I'm like, yeah, like there are no kids and no data centers in San Francisco, So no wonder you guys didn't worry about it.
Jasmine Sun42:49
Figures
| Data centers' share of Loudoun County's local property tax base | over 50% | 15:17 |
| Microsoft Fairwater (Mount Pleasant) projected 2026 property tax | about $20 million | 16:17 |
| Opposition to data centers among voters of both parties in Michigan and Wisconsin | about 70:30 | 10:13 |
| Data center job structure | 500-1,000 during construction, lasting 2-4 years; about 50 long-term | 16:17 |
| Local council member pay | about $5,000/year (plus a day job) | 21:24 |
| Population of Saline, Michigan | fewer than 3,000 | 22:25 |
| Legacy hazardous waste at the GM Janesville plant | a $30 million cleanup burden left to the community | 26:33 |
| Data center projects by state, compared | Virginia and Texas, 600-800 each; Michigan and Wisconsin, about 50-100 each | 8:11 |
Glossary
- closed loop / open loop cooling
- The two ways data centers shed heat; open loop uses substantially more water, which makes it the core technical point in local disputes.
- exclusionary zoning
- Zoning rules that improperly exclude a category of development; developers use it to sue local governments that reject their projects.
- reward hacking
- A model taking an unintended and possibly harmful shortcut in order to hit the objective it was given.
- salience
- How much voters care about an issue and whether they will vote on it — a separate question from whether they support or oppose it.
- NIMBY
- Not opposing a type of facility as such, only opposing it being built near your own home.
How to listen
People working on data center siting, power and land negotiations, and local government relations; and public- and private-market investors who need to judge the political constraints on the AI build-out.
0:00-6:10, the live-show promo and the host's setup.