Behind the Curtain: The new existential threat to AI (axios.com)

Forget energy. Forget chips. Forget China. The most clear and present danger to AI and any AI-related economic boom is rapidly rising public opposition to U.S. data centers. Why it matters: Republicans and AI CEOs are in full panic mode watching politicians and the public turn on the physical engines of AI growth. In private, they tell us they can't find a compelling message to shift opinion fast enough. Their nightmare — a political and economic daisy chain that cripples the AI revolution — is already taking shape: Voters revolt against data centers over electricity bills, water use, giant warehouse-like developments and fears about AI eliminating jobs. Democrats race to capitalize, competing to impose tougher restrictions or block projects altogether. Republicans — watching candidates get punished in places like Ohio — retreat from an industry they've spent years championing. The pipeline of new data centers slows, constraining the computing power AI companies need to keep improving their models and products. Investors question the staggering spending, borrowing and valuations built on expectations of relentless AI growth. Zoom out: The AI boom has become dangerously intertwined with the U.S. economy, meaning this will ricochet far beyond Silicon Valley. Goldman Sachs estimates U.S. AI investment will hit about $600 billion this year, equal to roughly 2% of GDP and 10% of business fixed investment. Big Tech has already locked itself into trillions of dollars in future spending: The Financial Times found six hyperscalers have nearly $1.5 trillion in purchase commitments, much of it tied to AI infrastructure, plus roughly $1.5 trillion in lease obligations. Even the richest companies in history are now turning to debt markets to bankroll the buildout. A handful of those AI-heavy tech giants dominate the stock market's gains, swelling the portfolios of wealthy Americans who account for an outsized share of consumer spending. The big picture: The increasingly toxic politics of data centers are surfacing in several of this fall's governors' races . Pennsylvania Gov. Josh Shapiro (D), a 2028 presidential hopeful, had welcomed data centers as an economic-development boon, boasting last year that an Amazon plan to build $20 billion in AI infrastructure was the "largest private sector investment in the history of Pennsylvania." On Tuesday, Shapiro, whose Republican opponent in November is campaigning on halting data-center development, went from AI cheerleader to critic and signed an executive order imposing stringent new requirements for data-center developers. Speaking at the state Capitol, Shapiro slammed "predatory developers" for trying to bully local officials and ram through dozens of data-center projects in Pennsylvania. Shapiro's new restrictions cover energy affordability, community engagement, workforce and economic development, transparency and environmental protection, and give local municipalities "a greater say over development in their c