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States shouldn’t reap AI benefits without bearing costs

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The Constitution “was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division.” States racing to block data center construction have forgotten that lesson. Sen. Bernie Sanders (I-VT) and others echoing his idea to pause data centers are daring state legislators to take a short-term perspective that prioritizes state interests over the nation’s collective ambitions. If they have their way, Congress and states may delay or even deny data center construction for years. 

It’s a policy position that may only make sense if you view the United States as 50 disparate political communities rather than a union. We had that discussion in 1787. Our forebears decided to ditch the Articles of Confederation for the Constitution and, in doing so, intended to ensure that no single state or collection of states could derail national policy priorities. It’s a conversation we’ve returned to in the intervening centuries. 

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States that have tried to shirk their responsibilities to national projects have been called out and held accountable. When Iowa made up bogus reasons to deny large trucks from traveling through the state, the Supreme Court struck down the law and mandated that Iowa, like all other states, allow for the free and steady flow of interstate goods, though doing so would come at a cost. That case made clear that states cannot at once reap the benefits of a functioning national economy while pushing the costs onto their sister states. Likewise, when Arizona tried to block trains with more than 14 passenger cars from riding through its desert, the court again called foul. While the state’s safety concerns were well taken by the justices, the disruption to the nation’s economy and infrastructure outweighed those considerations. It may be the case that states have valid safety, environmental, and cultural concerns arising from some national projects. However, those concerns must be evaluated in light of national considerations.

The debate around data centers has so far lacked that holistic understanding. First, it’s worth clarifying that the need to build data centers is about far more than AI. Data centers are “the physical infrastructure of the Internet.” Absent data centers, our way of living would grind to a halt because the internet would come to a standstill. As our society increasingly becomes more digital, the demand for data centers will continue to grow. The upshot is that the creation of more data centers is “all but inevitable.” That said, the AI boom is only accelerating the need for more data centers. These additional, AI-specific data centers are likewise preordained at this point and for good reason.

Second, it’s important to stand firm on the fact that building data centers to meet the needs of AI labs and researchers is aligned with national objectives. It is undeniable that the trajectory of AI has a meaningful influence on our economic prosperity and national security. As countries around the world pursue their own AI development efforts, it’s an open question where the jobs of the future will emerge. If the U.S. is going to retain its position as the best place to have a good idea, to launch a business, and to push the technological frontier, then it cannot fall behind in developing novel AI tools, diffusing them across society, and improving them over time. While the economic transition to the Age of AI has already been painful for many and will result in disruption to many more, the transition will only be more difficult if we regulate AI and its related infrastructure out of fear. The same is true in the national security domain. People may rightfully fear that AI may be misused and abused to achieve militaristic aims. That fear should be especially high if authoritarian regimes get their hands on highly capable AI systems before the U.S. and its allies. That’s another reason why a national approach is required for this AI build-out.

Third, tempting as it may be, this national AI project cannot be outsourced to other countries. The inevitable creation of more data centers will have to predominantly take place in the U.S. because we cannot be assured of the long-term viability of data centers abroad. As revealed by a data center being among the first targets in the war with Iran, our adversaries will continue to look for ways to slow down our AI progress. Accordingly, states will need to play host to the vast preponderance of this critical infrastructure. 

A DATA CENTER MORATORIUM WOULD UNDERMINE AMERICA’S FUTURE

With all that in mind, the only remaining question is where this data center development will occur. It’s in the nation’s interest that these centers be built in areas with vast quantities of water, power, and the requisite talent. Not all states meet those criteria. The result is that a few states may be home to far more data centers than their sister states. That should be a foregone conclusion and a celebrated outcome of the fact that we are such an expansive and diverse political community. Instead, there’s an increasing risk that short-sighted state officials will effectively bar data center development within their respective states. This will force data center creation to occur in less efficient places, imposing higher costs on the entire nation and limiting our AI potential. This is not aligned with our “sink or swim” mentality. 

We’re all in this together. The AI build-out will result in some communities bearing more costs than others. Rather than allowing states to push those costs onto others, the question should be how we can develop a national strategy that rewards and compensates those who take on the burdens associated with this massive endeavor. That’s a tough discussion that Congress must lead and complete in the near future. In the interim, courts must not allow states to opt out of the AI future. Such selfish behavior runs counter to our constitutional principles and risks sinking our collective well-being. 

Kevin Frazier is a senior fellow at the Abundance Institute, focusing on the nexus of regulatory design, innovation policy, and constitutional law.


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