How Big Tech Hopes to Win Over Data Center Skeptics

[00:00:03] Welcome to Tech News Briefing. It's Friday, August 21st. I'm Belle Lin, a reporter for the Wall Street Journal Leadership Institute. As tech companies grapple with how to generate enough power to supply their AI ambitions, nuclear energy has emerged as a clean 24-7 option that seemingly fits the bill. We're taking a look at the race to build America's first nuclear reactor in a generation.

[00:00:30] Then, Big Tech is dealing with another AI issue. How to gain public support for the data centers they need to power the technology. We take you inside their public relations crusade to turn around public sentiment. But first, AI mania may be relatively new, but the need to power AI data centers has some looking to an old power source, nuclear.

[00:00:55] But it's no simple matter to stand up a nuclear reactor, even with all the funding going into the space. WSJ reporter Jennifer Hiller joins us now to explain the newest innovations in nuclear and the risks of a new hype cycle. Jennifer, when we talk about nuclear, we usually think of these big, conventional nuclear power plants. But how is a small, modular reactor different from those big, conventional ones?

[00:01:24] In some cases, they are a very similar design, but just scaled down and not putting out as many megawatts. In other cases, it might be new fuels, maybe different cooling. So sometimes the design is quite different. But I mean, essentially, it is just smaller. And the idea is, if you make a nuclear project smaller, you can maybe better control costs.

[00:01:51] You can build the entire reactor or most of the sort of things that go into the reactor in a factory and control that manufacturing process and do a lot of them in a row and try to drive costs down that way. Is it fair to say that much of the innovation coming out of these startups and new companies is around these small, modular reactors? Yeah, definitely.

[00:02:17] This is really what is so far finding success in the market. It's really hard to figure out how to build and mostly finance a large nuclear project. But if you are talking about projects that might be a few billion dollars or less, that's something that a lot of companies can wrap their heads around. And it's the kind of capital risk that the market understands in a better way. So we have seen some companies start construction on them.

[00:02:46] So in the next handful of years, we will start to see them come online and be completed. What are some of the biggest hurdles to getting a small modular reactor online? Well, I think that's probably what we're about to find out now that projects are starting construction. We are going to find out basically how difficult they are to build and operate and to build a lot of them and operate a lot of them.

[00:03:14] That's kind of one of the things that we don't know about this part of the sector. People have now a chance to develop these reactors and to get first projects in the ground and get started in this industry. But what we don't know is who can really make companies and have a long-term company emerge out of this.

[00:03:35] Because to have a real business, you're going to have to keep building reactors one after the next after the next and have a large order book where you can really start delivering a lot of these. All of this talk about AI and financing also makes me think about these questions of whether a lot of this AI infrastructure is a bubble that we're in and there's just a lot of hype happening around it. Are there concerns that there's a bubble around nuclear investment that's growing?

[00:04:04] Yeah, I think there is a lot of concern about that. And I think even people within the industry would say it's a bit of a hype cycle. To some extent, a lot of the power industry is riding the enthusiasm around AI. And so that can be a little bit of a roller coaster. And last question for you, Jennifer. What about the large conventional reactors that we talked about at the beginning? Are those still being developed as well?

[00:04:32] Yeah, I mean, there's definitely efforts underway to try to keep the existing reactors online and extend their lifetime. Secondly, there is a lot of talk about up rates, which is basically, can you get more power out of existing reactors? And then separately, there is a lot of talk about building larger reactors, which the government would very much like to see.

[00:04:56] It's just a little bit harder to do simply because of like the cost and the timeline involved. That was WSJ reporter Jennifer Hiller. How do you think we should power the AI boom? If you're a listener on Spotify, leave us a comment with your thoughts.

[00:05:12] Coming up, the tech companies behind the AI infrastructure buildout are pulling out all the stops to solve a public relations crisis that has been derailing their data center projects and scaring off political allies. We dive into what's happening on the ground after the break.

[00:05:32] A mounting grassroots backlash is threatening the very foundations of the AI boom, and the tech giants that have the most to gain and lose from it aren't sitting idly by. Big tech companies are in full-on crisis mode as they work to stem the uproar against AI data centers.

[00:05:59] The issue has even reached politicians' offices. Dozens of cities and counties have paused new data center construction, and several states are weighing similar bans. Last month, New York instituted a temporary ban on large-scale data center projects, while Pennsylvania recently unveiled new restrictions on data center development. WSJ reporter Isabella Simonetti is here now to discuss what tech companies are doing to change public opinion,

[00:06:28] what polling tells us about how Americans really feel about AI, and how it could all shake up. So, Isabella, what are some of the tactics that tech companies are deploying to help convince people to support their data centers? Sure. So, OpenAI recently held an open house of sorts where locals could come and ask questions, learn more about potential jobs at data centers, tax implications, and how the data center will impact the environment.

[00:06:58] So, really just trying to engage more with the community, but they're also undergoing advertising and lobbying and PR efforts. In addition to pumping money into some of these communities, like Mark Zuckerberg recently announced a billion-dollar fund called Future is for Everyone, which he plans to invest in local communities where Meta has data centers. And is it working?

[00:07:28] Are these tactics achieving their intended effect? I think it's too early to tell whether it's working. What I can say is just looking at the data that we presented in the story, opposition to data centers is still pretty fierce and strong, and some of that is tied up in fear that people have around AI generally. And data centers serve as a physical conduit for artificial intelligence.

[00:07:54] And people have a lot of feelings about AI and, is it going to take my job? And if you have a data center, come into the place where you live. For some people, that can feel intrusive and stressful. It's interesting that tech companies used to be able to get their data center projects built really without as much public backlash. But now Gallup says 71% of Americans say they would oppose the construction of a data center in their area. What changed?

[00:08:22] I think it's AI and sort of fear and loathing around AI that people have. And so part of what tech companies are doing here is trying to educate people on the potential benefits of AI, too. You know, I keep going back to this Mark Zuckerberg example, but he also wrote a 6500-word essay in which he talked about how AI can be beneficial for everyone.

[00:08:48] The CEO of Anthropic earlier this month also posted on Next talking about sort of the PR crisis around AI and how we can solve that is by actually having AI cure diseases so that people can see the benefits of it versus it just having this be this looming technology that people don't really understand. I want to ask about the NDAs that data center developers and local governments were signing when it came to putting up their data center projects.

[00:09:17] The use of these NDAs was pretty controversial with the public. Are those still happening? Microsoft earlier this year announced they would stop using non-disclosure agreements to negotiate data center deals because a lot of locals will feel like they're finding out about a project when it's on the finish line, essentially, or is already being built. And I think that's pretty frustrating for people who want a say. And I also think just taking a step back psychologically, thinking about AI,

[00:09:44] there's sort of a lack of control that people have over artificial intelligence and how it's changing their lives. And then the data center in their backyard can be the cherry on top of that. And they want to have a say in what that project's going to look like, how it's going to impact them, whether they'll be able to get jobs at the data center if they're interested in it, et cetera. And looking forward, Isabella, what will you be watching for in the coming months and maybe year?

[00:10:11] I'm interested to see additional polling and whether that sentiment around AI and data centers changes at all. If people come around on AI. Also, what steps politicians are taking if there are more of these moratorium actions or if governors and local politicians are more bullish about AI and data centers and change their tune?

[00:10:37] I think it'll also be interesting to see how some of these efforts the tech companies are making play out. Some of them have pledged to do an accounting of the investments that they're making in local communities. And I'm curious to see, you know, does that have a real impact and does that help sway sentiment around data centers? That was WSJ reporter Isabella Simonetti. And that's it for Tech News Briefing.

[00:11:05] If you're a listener on Spotify, be sure to leave us a comment. Today's show was produced by Julie Chang. Jessica Fenton and Michael LaValle wrote our theme music. Our supervising producer is Katie Ferguson. Our development producer is Aisha El-Muslim. And Chris Zinsley is the deputy editor of audio for The Wall Street Journal. We'll be back later this morning with TNB Tech Minute.

[00:11:30] Logging off, I'm Belle Lin, a reporter for The Wall Street Journal Leadership Institute. Thanks for listening. Thanks for listening.