‘A lot of meat’ from data centers: One senator’s answer to job losses due to AI

Signs are already mounting that AI could lead to mass turnover, with the number of entry-level jobs in the U.S. falling 35% since 2023, mass layoffs rampant across big tech companies, and even AI leaders themselves warning of what’s to come.

Backstage at the Axios AI Summit in Washington on Wednesday, Sen. Mark Warner (D-Va.) said he was recently told by a venture capitalist that his firm was cutting its software investment to zero, thanks in large part to Anthropic’s Claude’s rise, and that a major law firm told him it would no longer hire first-year associates because AI can now handle much of the work that was once assigned to junior lawyers.

Warner said fears of AI-related job losses are “clear”, even though data from one AI company suggests AI has not yet started displacing jobs. As those fears grow, another battle is brewing over who will pay for it.

Warner proposes taxing the data centers driving the AI ​​boom and using the revenue to support workers in transition. Although he has not introduced any legislation yet, the idea is gaining urgency as public anger over AI and data centers grows.

There is a backlash against data centers across the United States, including a bill introduced Wednesday by Sen. Bernie Sanders (D-VT) and Rep. Alexandria Ocasio-Cortez (D-NY) that would require a moratorium on data centers. The biggest concerns are noise, pollution and rising electricity costs. But behind those concerns is a growing resentment, a reluctance to suffer the potential negative effects of having data centers running technology in people’s backyards that they fear will displace workers.

Mr. Warner has no intention of supporting his colleague’s bill. “The data center suspension simply means China will act faster, and this is an area where we cannot afford to lose,” he said on stage at the event.

When it comes to AI and data centers, you can’t put a genie in a bottle, he added. And while Warner believes in strict requirements to ensure data centers don’t pass on water and electricity bills to residents, he told TechCrunch that he believes there are other ways for communities to tap into their “reserves” in ways that address underlying job loss fears.

“I’ve long believed that the industry has an obligation to figure this out and help pay for it, but one of the questions I had was: Who should pay?” Warner told TechCrunch. “That would be the chip manufacturer, Jensen. [Huang, Nvidia’s CEO]?Should it be a large language modeling company? Should it be the Goldman Sachs of the world that is using these tools to eliminate a lot of first-year employees?”

Ultimately, he said he thinks “the easiest place to extract a few pounds of meat is probably going to be in a data center.”

That may seem like using data center tax revenue to train new nurses or fund AI upskilling programs, as long as there is a “tangible benefit to the community” in helping them navigate this economic transition that AI companies have forced upon them.

Warner sees it as a way to balance the need to build data centers with some degree of obligation to the communities that pay for them.

This idea is not without precedent. Warner pointed out that Henrico County, Virginia, is using tax revenue from local data centers to launch new affordable housing projects.

Finding ways to link data centers to tangible benefits to the community will be essential, he says, because otherwise “the pitchforks will come out.”

The public mood suggests he may be up to something. A recent NBC News poll found that public support for AI is lower than for Immigration and Customs Enforcement (ICE), with 46% of registered voters viewing it negatively, compared to just 26% viewing it positively. In Virginia, this is reflected in a proposal to eliminate state tax breaks for data center construction, costing state and local governments about $2 billion a year in lost tax revenue in one of the world’s largest data center markets. Warner said other states could follow suit.

AI and data centers are “easily demonized,” he said.