Breaking Points' Saagar Enjeti says data center backlash is a bubbling political force — and tech should stop the fear-based marketing

memory to open the Wall Street Journal app regularly and scroll that news feed separately. Uh and I don't really look for as much craw cross cross-pollination as uh as I thought. Um anyway, we have Sager and Jenny from Breaking Points in the waiting room. So we're bringing in to the TVPL job. Sager, how are you doing?

I'm great guys. Thanks for having me.

Thanks for coming on. Uh where should Let's start with the data center thing. We were talking about Andy Jasse. Oh yeah. Yeah, the tie is I'm getting brutally tied mom.

Yeah. Um,

dude, uh, Jordy gets an exit and immediately starts dressing like a tech [ __ ] What's What's going on here, man?

To be to be clear, I've been I've been I've been having I I have the limited edition

technology in motion.

Okay. Well, why has nobody sent me one? How come I

dro? They're in the works. We'll send you one. Um,

you're going to be you're going to get to wear TVPN all day long. Yeah,

that's great. Uh, so we were talking about uh Andy Jassis's 2025 2026 shareholder letter, $200 billion of capex, tons of new data centers coming online. Every this applies to every company.

You were hoping for a bigger number, wouldn't it?

Yeah.

Oh, yeah. I mean, of course, as an American, I just want all of my farmland. I want all the trailer parks pushed out and I just want to make sure that there's beautiful data centers uh that are just sitting on previously like taken care of and people with generations just get kicked out. So I wanted 400 billion 600 billion something like that.

Yeah. I mean maybe we can start with the the the shape of the push back against data centers because it's fallen in a few buckets but uh let's just start with like the big one which is energy. uh what are the headline numbers and fears that people are are pointing to the case studies that uh people are are nervous about the energy impact specifically?

Well, I think especially guys, you know, this there's a pre-Iran war conversation, there's a post Iran war conversation. I think that's really important to say because, you know, who knows where the price of oil will eventually stabilize, but when you have high inflation at the gas pump and likely at least some moderate increase in electricity bills, we have we don't know exactly where things are going to stabilize. You're going to have a lot more cost consciousness whenever it comes to energy. Now, especially in the midst of a data center conversation, I know that the data center pro data center people are always telling us, don't worry, it doesn't actually impact your electricity bill all that much. Nonetheless, there is a feeling there. And John, I just sent you that study or that story this morning, which is very interesting. My colleague Emily Jashinsky actually talked to me about this, but the a Wisconsin city has now been the first in the nation to actually pass an anti-data center referendum. And so, the ballot measure is basically the last thing that the voters in that town felt that they had at their disposal to effectively ban the entire city from approving any of these new projects. Do you guys remember the guy who went viral in New Jersey who blocked the data center? I interviewed him on my show. He was a longtime viewer actually of the program. He was just like a normal uh activist type, but hadn't really engaged with it. And he went through the zoning and he was like, "Look, these developers are making all kinds of promises and he was concerned about water." And I know, you know, again, the pro people are are always telling me that that's not the case. Maybe, you know, I got to see a little bit more evidence for myself, but there was an problem and city council. Go ahead.

Is your mic I I I don't know that we're you're on the correct mic. We might be on that.

The gain might be a little high. I will I will give everyone some news about this. Wisconsin city passes nation's first anti-data center referendum. The vote suggests ballot measures could become a powerful new tool for grassroots activists.

The chat thinks it's a foreign advert.

Um let let's hear if it sounds any better now.

Is it a little better or turn down?

I think that's great. There we go.

Thank you.

Amazing.

Okay. So, uh is so

is this uh is this what is this local Wisconsin city referendum like the new playbook that will spread all over America? Are there other jurisdictions that are already looking to copy and paste this? How do you think this where do you think this goes?

I definitely do think it will serve as a model especially as other remember this is really a bottomup phenomenon. at the community level and here in the state of Virginia where I live 40% of our power is actually consumed by data centers and so you've seen it became a major issue in the gubanatorial campaign both the Republican and the Democratic candidates were against data centers and both a lot of the candidates are seeing all of the energy I'm sure around this I'm saying at the community level I'm sure you guys also have seen all of these viral videos I referenced the one more recently of this trailer park which is being basically told they have to go out because they're going to build a new one. There's the famous one recently, I think it was in Kentucky, of a woman being I think she was offered like $20 million for her land. She's like, I'm born on this land. I'm going to die on this land. So, I I really think that this is one of those bubbling political issues which no major polit politician, maybe Bernie Sanders, the only one that I've seen which has been willing to like jump on top of it. Uh, but I think it's going to be a major issue in 28. 28. I think in 28 both candidates are going to have a data center uh platform. Maybe the Republican one, depending on who it is, is going to try and square the circle around GDP, but I don't think that voters want to hear anything about it. That's just my my personal opinion.

Do is is the sense in Virginia that Virginia would would be better off if the state had never had a data center? M

well it it's complicated. Remember, you know, we're full of a military-industrial complex, but uh don't forget this. We had Amazon, remember when they were going to leave New York and they were going to come here. They're actually going to come near where I live. It it really didn't work. And there's a lot of local opeds. They're like, "Hey, we didn't get all the jobs that we were promised. Uh Virginia threw all these tax credits." And so people do feel really taken advantage of, I think, especially by Amazon here in Northern Virginia. But look, the backbone of our economy is always going to be the military-industrial complex and all of these like ridiculous server farms that serve the CIA and the Pentagon. But I mean, in Oregon, I think it was 30% of power in the state of Oregon is being used by data centers. It's like 20% in a few uh uh different states. Virginia is definitely we were the highest in the nation. But I can tell you at the organic level, Fredericksburg, more of the rural communities where there are the new projects that were being us looked at all of those city councils, people were lining up for hours to campaign against this. Same thing in New Jersey, people lined up for, you know, in the middle of the night. And I've talked about this before, guys. Do you know what it takes for a voter to actually care? You could barely get people to come out for election day for the president. Now for to come up for a local meeting against zoning. Usually that's just really old people. This time people are bringing their children. They're sleeping in the room. They're waiting all night just to be able

What is your What is your What is your advice for uh the data center developers out there? Cuz certainly I I like you feel you don't think that we should just not build any data centers.

It depends. You know, I I don't know. I mean, I'm becoming more radical uh as as times go on. And so maybe we do just need a butlerian jihad. I'm testing the limits of your editorial independence, by the way. Shout out to you, Sam. Uh but uh I mean, look, I I'm not giving any advice to the enemy. I I think really what I would say uh to the tech community more generally, and John, you and I have talked about this is just prove to me that this is going to make my life better. Uh and stop talking about all these scary things because I'm starting to believe you. In fact, I do believe you. Uh what is this new claude news that their new model is so scary they have to pre-release it to the cyber security company so that they can develop so no so that the new model can develop defenses against itself every day with you that the the fear-based marketing like needs to stop because it's not it's not helping anyone like part of the whole back

I don't know guys I mean Jordy you have always made the case and maybe you're right is that that's a great way to fundra every I'm the company that bought you wants more money. They have to go and be like, "Look, we're changing the world. We're going to destroy all these shops." Like, I don't know. I mean, for for let's say like with Anthropic, I feel

so so my point my point was that it it was very effective when there was no revenue in the industry, right? Yeah. And and and it was kind of this kind of far out idea. Nobody had had like a magical experience with AI. They hadn't had like a question, didn't have anyone to ask it to, and then asked AI the question, they got a good answer. like when when when the average American had not had a very cool experience with AI, they hadn't generated an image that was, you know, photoreal or gotten help with their homework or help with,

you know, writing any of these things that like now everybody has had the experience of, I it clearly like was necessary to kind of marshall enough capital for bunch of upstarts to be able to compete with the biggest companies in the world on this like the the Googles of the world. And I just think at this point I made the case like you know at the end of last year where it was like we need to stop we need I I think we need to stop this as as an industry because why would why would average American be excited about this if you're just trying to give them you know Terminator nightmares but clearly the entire you know some people in the industry still feel like they need to uh

because I think they really believe it.

Yeah. Yeah.

No, I think they believe it. That's See, I'm with John. Like I feel like Dario believes it and he just goes on every podcast in the world and says it like over and over again. And at a certain point, especially like with the new Claude news, I'm like, "Dude, maybe I should just believe you." And you know, people, what is it? People are taking leaves of absences because they're afraid. And I mean, you know, you can only call yourself the new digital god so many times before. Look, again, I'm a lite. I I don't know a ton about the technology. I listen to smart people like you guys and many others to try and figure out what's going on. But if anything, I just want to be able to convey to the people who watch this show, uh, you're not very popular right now. Uh, and especially in the midst of a global energy crunch. Uh, I would just be real careful about strolling around town and talking about how it's going to bring jobs in because a nobody believes you. They all think that their bills are going to go higher. There needs to be I I think what this really needs, guys, is I don't think it can be solved at the federal level or sorry, at the company level. I think the government is going to have to step in and genuinely like codify let's say the executive order that Trump wanted to put in place where every data center project is going to have to supply the initi the amount of energy that it's going to use it have to prove it to the local city council to the state to the feds like there needs to be genuine democratic buyin if we're all going to decide like this is cool for us and I'm not sure that uh I'm not sure really that the tech companies are ready for that although maybe Sam is uh you guys saw saw his new social contract. I I was about I was going to do a segment about it on my show, but I didn't have I didn't have the chance because of this entire Iran war thing. But I mean, look, I mean, clearly he's he can foresee what the problem is. I don't really agree with some of the stuff he laid out, but yeah. Anyways,

yeah, it was notable. So, uh Deus had an interview with with Harry Stebings uh this week. It's just 30 minutes. You you would probably appreciate it because Demis is, you know, one one of the the the godfathers. Uh and he even was kind of talking about potentially uh you know one solution to this is like sovereign wealth funds like investing in the labs getting a piece of it so that every sort of citizen benefits. I thought that was notable because it was, you know, Google and and uh you know, the Gemini team is the most heavily funded lab in in the entire world. And um so we'll we'll see how this stuff works out. How in in Virginia, uh Tyler Tyler on our team just dropped a a truth nuke. He said in some localities in Virginia, 31% of total local tax revenue is from data centers. Is there is there like do you think that uh like like I guess like part of what I'm trying to wrap my head around is like it seems like there are plenty of places in the United States where that uh putting a data center somewhere that would generate a huge amount of of of local tax revenue would be a net positive. Right.

Maybe. And I believe that you're right that that

individual areas should be able to decide is this an industry that we want to support is this an industry that we want as a part of like personally do I want um you know uh uh people you know drilling oil like you know 10 ft from my property line like probably not right but there are places in the United States where people have decided we're going to drill for oil here and and we're going to you know be okay with those trade-offs and So I think uh I I I generally you know I I've said this before I think there's a lot of reasons for somebody to like citizens need to understand okay what is the benefit of putting this data center in our county in our town and it and it needs to be it needs to be um there needs to be some positive benefit other that for for the local community and so I think we agree there because

you're not going to be using the models because the data center could be halfway around the world or in

you still get you still get access all the AI tools that you want. It doesn't need to be in your backyard. And so I believe

to Tyler

uh to who's in the chat. But I mean I I do think though that that tax argument the problem is that largely again I'm speaking from a voter level is they do not feel either that impact or that they often like with the Amazon you know example that I gave you is that we give these tax credits away and then the promises a lot of these things don't end up happening. Come on, guys. This is a tale as old as time. Every state in the country, remember when Amazon did that ridiculous pony show for every state to throw whatever it could to them and then they ended up Yeah. for HQ2. That's the project I'm talking about is that Virginia, where I live, also did that. And then, of course, you know, local politicians feel very burned and a lot of the voters do as well. But ultimately, Jordy, I don't think we're disagreeing, man. Like, local control is really what it's all about.

That's what I'm saying. And and I also think the feds though I do think that you know considering the way that Trump and the AI industry are so like they really do need each other just because of the way especially now after Iran. My god uh can you imagine you know like look at how much he's he's reacted to market swings. One of the fears that I had really was that a lot of this you know you're talking about sovereign wealth funds John you and I know the amount of Gulf money slloshing around Silicon Valley. I'm like guys like we're about to see force majour just get declared. I mean, if you see even 10% go down from QIA, SIA or any of these other investment funds, you're like, that's like an extinction level event for a lot of these or they might reallocate. They might start funding all these defense tech companies and not investing in data centers. And don't forget that an Amazon data center was struck by Iran in the UAE. I believe a couple of different tech infrastructure places were explicitly declared war on by the Iranians. So I I do think that there's an element here where what we're what we are watching uh play out I think politically and even geopolitically is that foreign you know adversaries can see clearly that this is a potential pain spot for the US economy here in the US. the administration is really aware of this, but there's also just this rising kind of populist tide against the data center movement and and against I think really like abundance style asurances uh from politicians and from companies that after 40 years now I mean before data centers it was Walmart and before that it was something else. there's always going to be like a small guy versus a big guy feeling especially in rural parts of the country and you know I'm from Texas Jordy with the oil industry so I I get exactly what you're talking about right like there's a symbiosis of we actually get rich off this stuff so we're okay with drilling for oil but you know there has been enough stories also even there where people go bust as a result and there's a lot of animosity towards the oil industry especially pre-shale revolution after things petered out And uh you know I don't know I' I've just seen this go politically in a lot of interesting directions enough to see that a something is happening b is that the tide is not only just turned but I think coming very explicitly and if what I would really advocate for is a genuine democratic process cuz that's what it's all about like people just feel like this is out of their control about AI especially they're like I want impact I want a say and I don't think they're wrong to say that

the flow for for getting some sort of resolution on the federal level. Is that like a new bill or something or like obviously this is going to happen after the midterms, but then uh yeah, and it's going to try and tie a bunch of these different questions in a bow around safety and cyber security and data center buildouts. Like is there is there a world where the like a good data center exists in the sense that it supplies its own power with clean energy? It's not an eyesore. it's either buried or covered in trees or beautifully designed and it doesn't have any environmental impacts. Like I is there is there a world where someone could get behind a data center at that level?

Yeah, absolutely. You know, and that's kind of the thing. Why are we just talking about data centers? I I talked about this before. I read once a report of a guy who just came from China and he said nobody in China cares about power with data centers because they have a ton of power. He's like we have energy, dude. He's like, "Bro, we don't care." He's like, "Yeah, you can build you can build a data center. We're good. like we have cheap and abundant power. So if we have cheap abundant power all over the nation, no one will care either just about data centers, especially if we have, you know, cheap electricity, if there's just if there's no concern on the power generation level, and this is why, you know, I'm a huge advocate of nuclear power plants, whatever, renewables, I I don't even care at this point. Shale gas, let's put it all in together. But I actually think our grid and the delay of our grid and and really just the knowledge right now, we're not investing a lot more into it. doesn't seem like things are propelling. That's what makes it a zero- sum game. It doesn't need to be this way. Like really, what we need is just a ton of power. If we have a ton of power, then we don't care about anything being built.

Yeah. So, is is codifying the uh the rateayer protection pledge into law good move?

It would be a good move, but I don't think it's enough at this point. There's so much distrust, guys, like at the local level and on the political level. Uh I I recommend you follow Ryan Gduski. He's done some more recent work on the data center question. He's been talking about this. He's like, "Guys, this is just laying out there for any politician to pick up." And I'm talking about it from an anti- data center uh position. He's he's much more of an expert on polling than I am. Go and check out his feed and some of the work that he's done, especially not just on feelings against AI, but data centers cuz he I think he crunched the numbers. I know it was within the last couple of weeks that he looked at the question and he was he just said there's an overwhelming animus and that people are angry. So it's not just again let's be very clear it's about a feeling of lack of control over you know you're coming to take my job you're increasing my electricity you're changing my nation and I have to have a say as a citizen. So that's not just no longer about electricity that's about the whole picture of like technology and oligarchy and the economy. So you're fighting against a very very big force right now in the country.

Yeah. No it makes a ton of sense. Thank you for coming on and breaking it down. Uh, I'm sure we will be talking about this.

Have you have you tried have you tried just out of curiosity to just not use any AI? I mean, it's impossible to not use AI now because every company for the most part is is using it. But have you tried to do your own personal like pause just for like a few weeks?

You should try. I want the like you should let's get you back on the schedule for a few weeks from now

and in the meantime promise you will not use any any AI at all until your next

guys. It would be so hard because even the chess board behind me has builtin AI. It's everywhere. Yeah, it's got the builtin it's got the chest.

No, it's fine. You can just No, just don't play chess, bro. It's fine. I can't do it. Just get just get a Just get an old school board.

I've been on one by the game. Uh this is I've been completely oneshotted by the game. Anyway, yeah,

thank you so much for coming on. We'll