transcript
Amna Nawaz: AI
is fueling high stock market prices, economic growth, and a construction boom across the United States.
But it’s also sparking intense local debate over the benefits, costs and, in many cases, the pros and cons of AI-powered data centers.
Should be built at all.
Economics correspondent Paul Solman looks at how one of those battles is currently playing out in the Midwest.
George Cullen, JP Cullen Co-President: Right there is the Cozy Inn.
Paul Solman: George Cullen has been in Janesville, Wisconsin for quite some time.
George Cullen: The oldest continuously operated Chinese restaurant in America.
Paul Solman: Across America?
George Cullen: All over America.
Paul Solman: Family-owned construction business JP Cullen has worked on some of Wisconsin’s most famous structures.
George Cullen: We’ve been building here for six generations, and we’ve been proud to build here.
In fact, we built the first tractor factory, which was later used as a GM location.
Paul Solman: It was once the linchpin of Janesville’s economy, the huge GM plant that employed 7,000 people in its heyday.
But when factories shut down in 2008, unemployment soared to 13% and the town became a bipartisan symbol of the Great Recession.
Former US President Barack Obama: The Janesville Promise remains America’s Promise.
US President Donald Trump: Hello Janesville, and hello Wisconsin.
We love Wisconsin.
Paul Solman: I was also sent to the factory to cover the economic disaster.
But nearly 10 years later, said Karen, who is also president of the Janesville Chamber of Commerce, “we’ve seen a lot of change. George Cullen: Amazingly, we’ve replaced the number of jobs since that GM plant closed.
It’s been hard and time-consuming, but there’s positive momentum here.
Paul Solman: Positive momentum that could finally bring back 250 acres of vacant land that once housed a GM factory, build a data center and revive the city’s budget.
George Cullen: There’s nothing there.
Our taxes are not offset by large users providing property taxes.
These property taxes will help our schools, colleges, and city.
Paul Solman: What were your first thoughts when you heard that a data center might be built there?
George Cullen: The site had been vacant for a long time, so there was a positive quality in that someone was interested in building a new building on the site.
Paul Solman: Is that okay?
George Cullen: That’s good.
Paul Solman: Especially after the GM plant was demolished eight years ago, no one was willing to spend about $30 million to clean up the contaminated site.
And last year, a Colorado-based development company offered to buy the land, rehabilitate it and build an $8 billion data center campus.
Garlic Harwick, IBEW Local 890: If there’s an opportunity to revive an industry that can significantly increase the tax base and employ more people, I’d love to see it taken advantage of.
Paul Solman: Electrician Garrik Harwick is IBEW Local 890’s business manager.
As data centers proliferate across the country, unions are reporting significant new demand for members.
The Janesville data center proposal promised hundreds of permanent jobs and at least 13,000 jobs during construction, which was a big plus.
Garlic Harwick: Joe, the plumber down the street, might get a job coming here.
And having that child attend school with your child only impacts the entire community.
Paul Solman: And of course it applies to data centers in general.
Donald Trump: My administration will use every tool at our disposal to help America build and maintain the largest, most powerful, and most advanced AI.
Infrastructure everywhere on earth.
PAUL SOLMAN: So last year, there was an executive order expediting environmental reviews and returning sites like GM Janesville to “productive use as soon as practicable,” with a citation — no citation.
But given the current wave of opposition to data centers across the country, it wouldn’t be surprising to hear that parts of Janesville aren’t selling.
Ray Jewell, pastor of Afton Community Church: I’m not against economic development.
I want it to be done in a way that is reasonable, thoughtful and doesn’t put people at risk or harm the environment.
You can see the power plant there.
PAUL SOLMAN: Pastor Ray Jewell lives less than a mile from the site where his father worked for 30 years.
Among his concerns were excessive water use, noise and light pollution.
RAY JEWELL: It’s in the middle of a residential area.
Paul Solman: And of course he’s worried about energy prices.
The nation’s largest power grid operator recently announced that electricity demand from data centers will add more than $6 billion in costs to consumers over the next three years.
The Janesville developer declined an on-camera interview but vowed to minimize the data center’s impact on residents and the environment.
Jewel is, well, skeptical.
Ray Jewell: The ones that are out there right now across the country, they can’t prove it.
Paul Solman: So he’s part of what’s becoming an anti-data center wave.
According to a recent Gallup poll, 70% of Americans oppose building AI
Data centers within the community.
JAEL HOLZMAN, Heatmap News: There’s Something About AI
And its involvement, its impact on people’s future employment prospects and how they view the world in general, is what makes people especially furious about these projects.
Paul Solman: Jael Holzman reports on AI
Heatmap of data center backlash websites on climate change.
This is a uniquely unifying topic, she says, that unites both the left…lawmakers.
Alexandria Ocasio-Cortez (D-NY): While the American people are suffering, big tech companies continue to demand more data centers, more energy, more data collection, and more American jobs replaced by AI, all at the feet of the American people.
Paul Solman: …and on the right, for example, Tucker Carlson.
Tucker Carlson, conservative commentator: The future of AI
The promise is worse for the vast majority of people, but it empowers and enriches a small portion of the population.
That’s so crazy.
Jael Holtzman: There are so many political constituencies here, movements that have found common purpose, not just the climate movement.
I mean, you honestly have some pretty cosmic big shots when it comes to politics.
Paul Solman: According to a recent report from Data Center Watch, opponents have delayed or blocked at least 75 projects worth $130 billion across the country in the first three months of this year alone.
Prescott Balch, Caledonia, Wis., resident: We organized a series of arguments and ultimately convinced Microsoft (in this case) and our village board to say no thanks.
Paul Solman: Former banking executive Prescott Balch came out of retirement when Microsoft offered to build a data center in his small town of Caledonia, Wisconsin.
Were you worried about data center development at first?
Prescott Balch: It wasn’t.
In fact, if anything, I’m on the opposite side.
I used them to live a healthy life.
It would be hypocritical to say that construction should stop now that I am retired.
Paul Solman: Wisconsin passed a sales tax cut in 2023 to attract data centers and spur economic development.
But Balch, who has crunched the numbers for many projects, says the promised windfall is not as big as it seems.
Additionally, small communities may be betting on a bubble.
Prescott Balch: The volatility of the industry, the fact that the industry likes to disrupt itself all the time, it’s always changing, the risk is that if something happens to that revenue stream, it’s going to be the current residents who end up having to pick up the tab.
Paul Solman: Balch’s skepticism resonated in Janesville.
This spring, two data center opponents were elected to the City Council, and the City Council immediately terminated the contract with the developer.
The Chamber of Commerce and Industry also withdrew its support.
Prescott Balch: I think just the scale of it has woken people up, especially in smaller communities.
When it’s that big and grand and impactful, we have an obligation as civic leaders to step back and say, we’re going to involve the community and get them to agree that this is the right idea, or we’re not going to do it.
Paul Solman: But the developers say they want to revive the project.
But Janesville has stalled the deal for now, still looking for an economic engine to move forward and clean up the 250-acre property.
The data center cash seemed like an offer the city couldn’t refuse.
It turns out there are several possibilities.
Paul Solman of Janesville, Wisconsin, on “PBS News Hour.”
