The midterms are behind us! It has been a long two years, but we made it. There might be a little instability before we figure everything out, including in the stock market as reported by NPR on Thursday:
Fears that an incoming Democratic Congress would crack down on AI sent the tech-heavy Nasdaq down more than 5% and wiped out more than $2 trillion in market value. The Dow Jones and S&P also sank.
I’m very excited about Gina Hinojosa leading Texas. This is going to be a much-needed new direction for our state. For AI, she and I aren’t totally on the same page. The more I look at what she’s said, though, the more confident I am that her approach is going to be thoughtful and good for Texans.
Although I’ve been fairly cynical about Anthropic and Dario Amodei lately on this blog, I’m not in favor of a ban or long pause to AI development that could delay getting to what Dario described as a data center of geniuses and a compressed 21st century: “…the idea that after powerful AI is developed, we will in a few years make all the progress in biology and medicine that we would have made in the whole 21st century.”
I think AI will ultimately have a positive impact on society, even if it’s rough getting there, and we should invest even more in data centers and energy. There will be a cost to waiting too long. As I blogged about early this year:
The AI industry has an insane amount of money right now. It won’t always be like that. This might be a once-a-generation opportunity to funnel that money into clean energy and new infrastructure.
So what actually is Gina’s policy on data centers? Will everything being built in Texas be immediately shut down and AI progress stalled? Not really.
In an article at The Texas Tribune:
The governor-elect during her campaign outlined a slate of priorities for lawmakers that included requiring data center operators to hire union workers, protecting communities’ water supplies and stopping data center companies from using nondisclosure agreements that make it harder for the public to track project developments.
And in a video interview with Big Country Politics just a few days before the election, Gina said:
Well, the priority of my data center policy is actually to give Texans a seat at the table to decide if and how data centers come into our communities. Because this is a great big diverse state. We are like a country in Texas and different communities have different needs, and the people of those communities should have a say and right now they don’t.
…
Many of them came to rural Texas where they’re outside of zoning restrictions and there’s really no protections for the people of Texas in these communities. And so we should have a ban or a moratorium until laws can pass, and it would be a moratorium on any new permits until we can pass laws to protect Texans.
There are a few high-profile projects in Texas already underway. Under Gina’s proposal, construction that has started should continue. Two examples are OpenAI’s data center in Milam County and Google’s data center and power plant in the panhandle.
While it’s not exactly regulatory capture, there is an incumbent advantage, as projects that got permits early won’t be as affected, further strengthening their lead on compute. Everyone else will have to wait until the Texas legislature passes new laws.
I’m also focusing on Texas here. Nationally, there will be efforts to regulate AI models. Locally, it only makes sense to regulate construction.
OpenAI was out with a news release soon after the election, trying to set the agenda:
The compact sets out what communities can expect from OpenAI at future campuses that we own and operate. The blueprint proposes policies to help ensure that compute campus development gives communities a meaningful voice, protects families from new costs, and broadly shares the economic gains of AI.
Sarah Friar also did an interview on CNBC talking about water use and noise. OpenAI’s blueprint is in part a guide for lawmakers to require data centers to be more transparent — limits on NDAs, and published reports on electricity and water.
Overall, from what I can tell from Gina’s comments, the path forward seems reasonable. Protections for workers and more engagement with local communities are good things. I just hope we can get consensus fairly quickly on new laws. This is such a bipartisan issue, it could be prioritized as one of the first things the legislature tackles.
