When AI Comes to Town

The Fight for the United States’s Green Economic Future

By Sarah Knuth and Winston Yau

In May 2025, Big Tech mounted an astonishing effort to force federal action against states’ authority to determine their AI future. Fronted by US Senator Ted Cruz (R-TX) and backed by lobbyists acting for tech industry giants like Amazon, Google, Microsoft, Meta, and major Silicon Valley venture capitalists, the campaign sought to impose a 10-year moratorium on states’ ability to regulate AI—arguing that the US’s existing patchwork of approximately 500 AI-related state and local rules risk its ability to win today’s international “arms race” to develop advanced AI technologies. The ban, inserted into the Trump administration-pushed budget reconciliation megabill (OBBBA), passed the US House of Representatives before being defeated in the Senate after a fierce public backlash.

This is just one example of Big Tech’s mounting anti-democratic attacks against AI regulation efforts alongside its escalating spending spree on AI data centers. Most recently, it has resurrected elements of the moratorium in the White House’s AI Action Plan. The Plan proposes slashing federal and state regulation and permitting protections that it argues slow data center construction, and threatens non-compliant states with loss of rural broadband funding. These deregulatory pushes help expand Big Tech’s direct assault on people’s material welfare: two-thirds of new and upcoming data centers are built in water-stressed areas, and electricity prices for households have grown by up to 267 percent in areas with high data center concentration. Organizers need a response to these assaults that can help win a better economic future for all.

Source: Bloomberg News

Fighting Big Tech’s political capture with green economic populism

Big Tech has entrenched its power by flexing its financial might and capturing imaginaries. If we want to see the United States innovate and economically prosper, we are told, we have no alternative but to accept Big Tech oligopolies and follow the industry’s lead on its latest pet technologies—and boondoggles. Both national political parties have fallen in line with this manufactured dependence. There is real danger that this bipartisan capture will persist despite Big Tech’s right-wing turn today. But uniting around an alternative can help organizers build the collective movement we urgently need to fight Big Tech power and reignite democratic debate on key questions: what does a just economy for the many look like moving into a climate-changed future, and who gets to decide that?

Public momentum is building against AI abuses, but needs a more coordinated vision and strategy—a shared vision for green economic populism can provide both. The following pieces in this series will track the multi-sided costs of Big Tech’s AI arms race, focusing on distinct harms that are galvanizing resistance on the ground and proposing progressive remedies—for example, just digital infrastructure, affordability for working households, good jobs, and effective use of public resources for working-class people’s economic needs. These interventions seek to block and build: while we must continue to call out the harms caused by AI, we also need alternatives for movements to work toward.

Debunking AI hype: foreclosed futures for communities

Big Tech has constructed a powerful hype machine around AI, its supposed inevitability as the central 21st century technology, and the necessity for the United States to “win” the AI arms race. The industry relies on ever-larger “hyperscale” data centers to power this imagined future, and is building this physical infrastructure at staggering speed and cost. The number of hyperscale data centers jumped to 1,136 worldwide in 2024, with over half in the United States; 504 more were in the pipeline by March 2025. Amazon, Google, and Microsoft alone accounted for over 59% of this international capacity, with Meta close behind. Big Tech giants and their financial backers have collectively spent hundreds of billions already on the data center buildout, a figure that may reach $7 trillion by 2030.

To grease the wheels of its data center buildout, Big Tech has developed a parallel hype machine. Some of the new development boom is rolling out in already-impacted US data center mega-clusters like Northern Virginia, but hyperscaler developers’ staggering demand for electric power is pushing them into new markets and more remote locations in the Desert Southwest, Midwest, and Deep South as well. To sell data centers to states and communities, Big Tech and its political allies have promised new jobs, tax benefits, and economic development possibilities. At the same time, they have engaged in secretive maneuvers like pushing non-disclosure agreements on local elected representatives.

State and local movements are increasingly exposing these anti-democratic practices and calling Big Tech to account for unmet promises. Hopes for lasting jobs have proven dubious, since many or most dry up once construction completes. Meanwhile, Big Tech has compelled many places to sign away data centers’ promised tax benefits. For example, public sector unions in Minnesota argue that the state’s sales and use tax exemption for data centers means $219 million in lost revenue by 2029—sacrificing alternate investments and job creation opportunities in education, nursing, and other vital public services. Good Jobs First found that 32 US states have agreed to such tax exemptions, which means more than $100 million in annual lost revenue for at least 10 states—close to $1 billion in Virginia and Texas. Moreover, these totals exclude other common giveaways extracted by Big Tech like local property tax breaks or sweetheart rate deals struck with energy and water utilities.

The strains that AI data centers put on US power grids are now common front page news, as are failures by some grid regulators and utilities to hold Big Tech to account for the skyrocketing costs of connecting and servicing them—costs that then fall upon households and other existing ratepayers. In a particularly severe case, data centers already consume 25% of Virginia’s power, and may demand 46% by 2030, which would spike Virginians’ power bills by $444 more a year. For years, mainstream voices defended AI data centers’ energy appetite by pointing to Big Tech’s climate pledges and innovative capacities. Among other arguments, they hoped that data center demand and Big Tech’s deep pockets would drive new markets for renewables and mature less-tried energy technologies. The AI arms race has underlined an uglier reality: when green commitments challenge Big Tech’s bottom line, it has proven all too ready to abandon them.

At the root of Big Tech’s embrace of fossil fuel interests under the second Trump administration is an industry unwilling to risk slowing its AI race with investment that is more responsible towards the energy and economic fates of working-class people; it is willing to build dirty to build now. For example, Energy Transfer, the oil and gas company behind the Dakota Access Pipeline, has received requests to provide fossil power to 70 new data centers, mostly since Trump retook office. By January 2025, data center demand had led to 11 GW in new planned fossil generation, and delayed or risked planned closures of 9 GW more, including coal plants.

These new fossil investments risk locking places into declining and highly polluting technologies, and more broadly overbuilding energy infrastructures to serve a data center boom that may dry up fast—because the AI bubble collapses, or simply because AI data centers rapidly grow technologically obsolete and have short lifetimes. Meanwhile, doubling down on dirty energy for data centers risks shortening human lives via spiking air pollution—especially concerning as low-income and Black-majority communities have been disproportionately affected by the buildout. An especially notorious intersection of environmental racism, Big Tech oligarchy, fossil capital, and the AI arms race is Elon Musk’s successful campaign to build a raft of natural gas generators in Memphis to power X’s AI agent Grok, which will increase the city’s smog by 30-60%.

At the broadest scale, the AI arms race increasingly risks the future of the US and world economy. Big Tech has relied on aggressive hype to realize a return on its hundreds of billions of dollars in sunk costs, but its success remains far from certain. It is ominous for the industry that tech insiders and financial observers are increasingly questioning the technology on a foundational economic level. Recent research suggests that 95% of companies’ generative AI pilots are failing, making little discernable effects on revenue. Widely circulated critiques argue that the AI boom remains a set of “solutions” in search of actual problems and durably successful business models—a far cry from the breakthroughs needed to justify its eyewatering upfront expenses. In the near term, Big Tech corporations have sought to stave off a collapse by using their existing platforms to capture clients and consumers, while turning to political cronyism, authoritarianism, and militarism in search of guaranteed markets—offering their AI services for surveilling immigrants, intensifying “warfighting” capacity, and helping Israel identify targets for its genocide in Gaza.

Big Tech’s immense spending on its data center buildout recently overtook all consumer spending in US GDP growth—while also diverting capital from other sectors like manufacturing. This astonishing dependence has been exacerbated by the US’s deepening economic malaise. Past experience suggests that it is working-class people who will suffer most if and when the bubble collapses, not Big Tech, its Wall Street backers, or its Big Oil and Washington cronies. The clock is ticking—we need a collective response before we are all left holding the bag.

Communities can lead a better green economic future

Part of the task ahead for organizers is to fight the bad. We must protect existing state and local AI regulation against anti-democratic attacks, while expanding it. Scrapping tax breaks for data centers would be a great start. And we must continue to challenge Big Tech: rationalizing digital technology to work for everyone requires breaking its oligopoly power and political capture. However, an equally crucial task is to fight for a better future with more viable and just pathways to 21st century prosperity. Advancing a green economic populist vision—that takes into consideration both who is harmed by current technological development and who should benefit—will require imaginative work as well as movement-building.

Pressure spots emerging in the data center race suggest an important starting point. A key power to fight for is places’ right to determine whether and how newly arriving large energy users can access existing infrastructure. Places should have the right to say yes to some demand, and no to others, coupled to fair mechanisms for making arrivals bear or share the costs of the new development. These are familiar platforms for community organizers, but are assuming new significance in the battle to win a just energy and economic transition. The data center rush may be breaking the US electric grid today, but in many ways it is exposing its already-existing weakness: the lack of a coherent policy for large users is just one failure amid broader gaps in planning and strategic investment. Here organizers have a powerful ability to connect communities’ needs on the ground with strategies to address broader national challenges.

For example, another growing source of electric demand is power needed to electrify homes and transportation. Electrification powered by renewable energy promotes a livable planet while simultaneously improving health, energy, and economic security outcomes for communities. Accordingly, host communities and policymakers may well find it in their interests to co-design and co-coordinate an equitable renewable generation and transmission buildout. Crucially, communities should not be passive recipients of infrastructure for such uses, nor an afterthought whom corporations attempt to pacify via meting out meager and symbolic benefits. Instead, as CCI has argued, communities ought to play a key role from the beginning, without being lazily labeled NIMBYs—a rethinking that simultaneously promotes more democratic development processes, improved community outcomes, and ultimately quicker builds.

These crucial shared wins are being sacrificed in today’s assaults on community and environmental protections as simply obstacles to development. Big Tech and Big Oil stand ready to exploit this myth. In an increasingly climate-changed world, defeating these attacks with genuinely democratic alternatives is an urgent and necessary task.