Democrats’ Shameless Data Center Fearmongering

Despite numerous polls that purport to show the Democrats well positioned to win at least one house of Congress in November, their party’s brand is in the toilet and their positions on the issues are toxic to most voters. Consequently, they have been desperate to find something to run on other than their hatred of Donald Trump.

Beginning a few weeks ago, however, they seemed to have settled on a central theme to campaign on during the final run-up to the midterms in coordination with the corporate “news” media: the Democrats have declared war on AI data centers.

In other words, the Democrats plan to weaponize legitimate voter concerns about data center construction in their neighborhoods for political gain. But while Democrats pretend to have the interests of everyday Americans in mind, their primary goal is to spread misinformation that they can use against Republicans on the debate stage and in dishonest campaign ads.

Much of what the public believes about data centers, large facilities that support AI and other internet functions, is inaccurate because the reporting on them by media outlets has been sloppy or deliberately misleading. The Democrats couldn’t care less about that. They know data centers have become the visible symbol of the public’s general AI angst, and they know how to exploit it.

On September 8, the Democrats found (or perhaps paid for) the perfect pretext to elevate voter anxiety to a level approaching hysteria when a 27-year-old former Anthropic employee named Jacob Coxon started posting on X about how AI would be the end of humanity.

Coxon’s apocalyptic warning inevitably caused a firestorm online, accompanied by demands for safety regulations on the AI industry. The obvious question this raises is the following: Why would this individual work for years in an industry if he really believes the things he posted on X?

Here’s part of what Coxon wrote:

“I resigned from Anthropic today. I spent the last three years doing pretraining research at both OpenAI and Anthropic. Neither company is acting responsibly … The people building AI earnestly believe that it could kill us all by the end of the decade. This is not a marketing stunt. If anything, many executives and senior researchers will couch their phrasing in the press to sound sensible - but I hear the same people express fear privately. No other human activity poses this level of danger.”

Regardless of Coxon’s motives, the opportunity was not lost on meddler-in-chief Barack Obama. He immediately urged his fellow Democrats to put this at the center of their agenda, according to a report in Politico: “I would have a very clear plan, and I would talk about this, and I would say, here’s our plan for safety, here’s our plan for making sure our kids are not corrupted by this.”

Obama clearly believes this is one issue that will allow Democrats to portray themselves as in touch with the real concerns of voters and force Republicans to pass AI legislation or regulations on Democrats’ terms.

How will the Democrats “save us” from AI data centers? If past is prologue, they will tax and regulate them into oblivion. Sen. Ron Wyden (D-OR) is rolling out legislation that will prevent data centers from taking advantage of tax incentives included in last year’s “One Big Beautiful Bill.” These tax breaks weren’t specifically designed to promote the AI industry, but the Democrats despise tax cuts of any kind.

By far the most pernicious feature of the Wyden bill is a provision that would tax gross data center revenue. Adam Michel of the Cato Institute explains this provision’s lethal intent:

“The proposal would tax gross data center revenue ‘at a low single-digit rate.’ Because it taxes revenue rather than net profits, the proposal risks imposing effective tax rates exceeding 100 percent … The fundamental problem with taxing revenue rather than profits is that the tax ignores whether a firm can pay the tax. Revenue tells policymakers nothing about profitability. Grocery stores, for example, generate hundreds of billions of dollars in sales each year while typically earning profit margins of only 1 to 3 percent.” 

This provision is a classic poison pill that has been inserted in the Wyden bill in order to scuttle new data center development. If Congress passes legislation containing this provision and it is signed into law, the United States will certainly lose its status as the global leader in AI.

The bill won’t pass this year, but it isn’t really meant to. The Democrats simply want to use it as a cudgel against Republicans, claiming the GOP would rather coddle billionaires instead of passing legislation to protect voters against the ill effects associated with “monstrous data centers” in their local areas.

Of course, Republicans must still listen and respond to voter concerns. Good policy is all about balance, and the interests of the AI industry must be balanced against the interests of the communities where data centers are being built. AI companies have a responsibility to obtain buy-in from local residents and share in their prosperity. Many already are, as a rare honest Washington Post opinion column recently pointed out.

This brings us to the actual effects of AI data centers on real communities. A good case study is Loudon County, Virginia, which has the highest concentration of data centers in the world.

As Fox News reports, “Data centers provide about 45% of all local tax revenue while occupying only 3% of the Virginia county’s land.” And, according to a Yahoo News report, “That cash has helped the county lower its real property tax rate every year for the past decade, from $1.145 per $100 of assessed value in 2016 to $0.805 in 2026.” Yet according to a Gallup poll:

“Seven in 10 Americans oppose constructing data centers for artificial intelligence in their local area, including nearly half, 48%, who are strongly opposed. Barely a quarter favor these projects, with 7% strongly in favor. … Half of opponents mention data centers’ excessive use of resources, including 18% each mentioning their use of water and energy. Sixteen percent mention a related environmental concern of pollution, including noise pollution and air and water pollution.”

This is where the coordination between the corporate “news” media and the Democrats has taken its toll on public opinion. They have been assiduously perpetuating propaganda about data centers and their “excessive” use of resources. The concern about water use mentioned by so many of Gallup’s respondents is a useful example. As the Goldwater Institute points out, “Nationwide, data centers consume less than 0.05 percent of total U.S. freshwater withdrawals, a tiny fraction compared to agriculture.” Moreover, data centers recycle industrial wastewater.

The same is true of data center energy use. The Electric Power Research Institute found that data centers usually reduce retail power rates by four percent. Utility companies have huge fixed costs that are borne by existing customers. Data centers assume a very large portion of those fixed costs, taking pressure off residential consumers.

As to the notion that data centers are loud and create constant air pollution, the civil engineering firm Kier & Wright disposes of those canards as follows: “No combustion, no emissions — generators run only minutes a year.”

Not that mere facts matter to the Democrats or their corporate media accomplices. They have settled on their closing argument for the midterms — they will save us from the evil AI data centers they ignored for two decades and promise to solve the affordability problem they launched during the Autopen presidency.

These two issues will be featured in countless campaign ads and come up in every congressional debate. Ignore this balderdash.