Backlash! (Data Centers)
Backlash! (Data Centers)
Lake Tahoe — home to gorgeous skies, clear waters, year-round recreation. And soon, no electricity.
OK, that’s an overstatement. But the fact remains that “Lake Tahoe doesn’t know where its power will come from after next ski season,” says a report at Fortune — “and it’s a major problem for the 49,000 residents who call the region home.”
The Tahoe area is served by a small power company called Liberty Utilities. Liberty gets its power from NV Energy, a Berkshire Hathaway subsidiary serving most of Nevada. NV Energy just gave notice that it will cease furnishing power to Liberty Utilities after May 2027.
The power currently going to Tahoe will be redirected to… data centers.
As it happens, northern Nevada is one of the fastest-growing data center corridors in the country.
The situation in Tahoe hasn’t turned into protests. Not yet, not there.
But elsewhere…
“I’ve never seen anything like this backlash against AI and data centers,” says the veteran energy journalist Robert Bryce.
“Just to put it in context,” he said last weekend on the Financial Sense podcast, “in all of 2025, there were 49 rejections or restrictions of data centers in the U.S. — 49 for all 12 months. There have already been 79 in the first four months and one week of 2026.”
Polling by Quinnipiac University shows that among Americans who oppose data centers in their communities, 72% are concerned about rising electricity costs… 64% are concerned about the water that data centers suck up for cooling… and 41% are concerned about noise.
Ground Zero for the data center backlash this month is Box Elder County, Utah.
On May 4, an overflow crowd showed up for a county board meeting — 600 people packing an exhibition hall at the county fairgrounds, another 300 outside.
On the agenda — an enormous 40,000-acre data center project called Stratos, requiring 9 gigawatts of electricity, about twice the electricity currently used in the entire state of Utah.
The atmosphere got so heated the board retreated to an inner room and streamed the proceedings to the crowd on Zoom.
Commissioners voted to green-light the data center. They said their hands are tied because the land in question isn’t zoned — and that by giving their approval, they’ll have more of a say in the process going forward.
Opponents still hope the process won’t go forward at all. Yesterday, they took their case to the steps of Utah’s capitol building in Salt Lake City.
One of the major investors in Stratos has become a lightning rod because of his celebrity status — Kevin O’Leary of Shark Tank fame.
This week he tried to make his case during an interview with Tucker Carlson. It didn’t go well.
At one point, O’Leary tried to invoke “capitalism” and Carlson shot back, “How is this capitalism? If taxpayers are paying for some of it, how is that capitalism?” O’Leary dodged the question and went off on a tangent about how red states like Florida are attracting people and business from blue states like New York.
But it’s not just about the NIMBY (“not in my backyard”) effect. Something bigger is at work. The backlash is “cultural,” according to Bryce.
“Ordinary people are looking at Big Tech — Amazon, Google, Oracle, Microsoft, Meta/Facebook, the rest—and they don’t trust Big Tech. Our privacy is being taken, and I think people are looking at all this and saying, ‘I can’t fight these monster, multitrillion-dollar companies in the virtual world. But I can fight them, or even stop them, in my neighborhood.’ I think that’s key.”
Carlson tapped into that sentiment elsewhere in his episode this week — apprehensions about AI and what the power elite plans to do with it.
“If you’re rolling out what they’re telling you, and clearly they believe, is the single greatest technological change in the history of human life on this planet… you’d think one of your main concerns is does this change the relationship of the powerless to the powerful, the relationship of the citizen to the state for example?
“But that doesn’t seem to be Larry Fink’s main concern. His main concern is how do we protect our investment?”
Let’s delve into this cultural backlash for Bullet No. 2…
“Rewiring the World”... for an AI Dystopia?
AI was a major topic earlier this month at the Milken Institute Global Conference in Beverly Hills.
Among the speakers was Larry Fink — CEO of BlackRock, the world’s biggest asset manager.
After discussing Iranian drone attacks on data centers in the United Arab Emirates during the early days of the Iran war, Fink said, “How do we make sure we’re protecting those $50 billion, $75 billion investments? We have to relook at everything because of the role of drone warfare.
“Right now we’re looking at it internationally but one of my concerns is could it be a domestic terrorism, using a $3,000 drone?”
You didn’t have to look far to find online commenters who took those remarks to mean that Fink believes anyone who opposes data center construction might be a budding domestic terrorist…
Also speaking on the panel with Fink was the legendary investor Bruce Flatt, sometimes called the Warren Buffett of Canada. He waxed enthusiastic about “rewiring” the world economy.
“For the next 10 years,” he said, “we will be rewiring the global economy to lay the networks [of] cloud, artificial intelligence factories and data centers…
“There will be $10 trillion from power, AI factories, data centers and fiber buildout laid to basically rewire the world for the new economy that’s coming.”
“That new economy is probably going to be our total enslavement, owning nothing and pretending to be happy so we don’t get beamed every night,” says the individual behind the Anonymous Conservative website.
“Increasingly when I hear ‘AI data centers’ now, I really hear ‘Our mechanism of total surveillance and complete control which will never allow our power to be challenged in any way.’
“Unfortunately, as the Covid episode and the migrant replacement show, they appear to have a strong desire to kill us, and presently are only restrained somewhat by a small fear of triggering resistance. It looks like AI data centers may remove that small fear.”
OK… I’m not saying I agree with that assessment. I’m just saying that’s the sentiment out there. Anonymous Conservative is an extreme manifestation of a vibe that resonates with a sizable swath of the population at large.
These issues — both the localized backlash against data center construction and the wider backlash against AI on privacy/surveillance grounds — aren’t going away.
It’s at this point I turn it over to you, dear reader. Is there a backlash where you live? Do you think it’s warranted? Do you think it’s overblown? Write and we’ll share your responses next week: feedback@paradigmpressroom.com
The Disappointment Trade
It’s one of those risk-off days in the market, across nearly every asset class. And for once, corporate media aren’t falling all over themselves to find “reasons.”
“S&P 500 and Nasdaq fall, strained by tech pullback and yields spike,” is the most that CNBC will venture.
Oftentimes there’s no “reason” at all for a single day’s trading action. But if there’s one today, it might be this: Mr. Market was expecting some sort of grand bargain coming out of the Trump-Xi summit in Beijing — after which Chinese leaders would lean on their friends in Tehran to reopen the Strait of Hormuz.
But Trump is flying home with no such outcome.
Thus, the disappointment trade: U.S. oil futures are up nearly $3.50 to $104.59 — the highest all month. (Also, with the summit now over, Trump could conceivably resume the war later today after the markets close for the weekend. No one wants to be short crude under those circumstances.)
Rising oil prices translate to rising inflation expectations — which then translate to rising Treasury yields.
The yield on a 10-year note has sailed up to 4.58%, the highest in nearly a year. The 30-year bond is up to 5.12%, the highest since — yikes!
That’s bond investors saying they want to be compensated for the risk of taking on Uncle Sam’s debt at a fixed rate over a long stretch of time.
Jitters in the bond market of this magnitude almost always drag down the stock market. After closing yesterday over 7,500 for the first time, the S&P 500 is down nearly 1%. Ditto for the Dow. And the Nasdaq is down nearly 1.25%.
The highflying chip stocks are dipping a little closer to earth, the Philadelphia Semiconductor index down 3.2%.
Precious metals? Getting crushed. Gold is down over $100 to $4,542. Silver is down over $7 to $76.26.
Crypto is faring reasonably well under the circumstances. Still Bitcoin is sinking toward $79,000 and Ethereum near $2,200.
One economic number of note: The Federal Reserve says industrial production jumped 0.7% in April — way more than expected. It remains to be seen whether that’s the start of an uptrend, or just a surge of incoming orders from buyers hoping to beat looming price increases.
No major economic numbers next week — instead all eyes will be on Nvidia’s earnings, due after the closing bell on Wednesday.
Fort Knox Redux
Aw c’mon, not this again.
“We wanted to go and knock on the door of Fort Knox — a very thick door — and to see whether or not we have any gold in there,” said Donald Trump a few days ago on Sharyl Attkisson’s syndicated news show.
“It’s a very interesting question. We played with that. I wonder if they left the gold in Fort Knox, because they steal a lot,” he rambled. “I do want to go to Fort Knox sometime.
“I want to see if the gold is there, which I’m sure it will be.”
Whatever.
We remember the buzz early in Trump’s second term. Our Jim Rickards poured cold water on the notion even then. By summertime, when it was obvious the audit was never gonna happen, Jim explained why it was never gonna happen.
For anyone taking Trump at his word about Fort Knox now — well, it’s time to trot out the meme.
Mailbag: Generational Resentment
The meme shared in yesterday’s edition brought forth the following objection…
“Dave — saw your ‘cartoon’ with retiring boomers laying in wait to attack hardworking millennials — interesting take on working-class boomers who busted their asses for years and get their basic SS bene and Medicare.
“Some like this old guy remember all the years paying self-employed FICA as well as FICA for two–three employees for years. Dude, I coulda done better avoiding SS and paying into my own acct. in lieu of that. Anyway, I am now looking for the nearest high cliff so that I can just keep on walking.
“Short memories are the part of the devil's brew to create hate and discord. Maybe you thought it was just humor, but you missed the mark, and you dropped a notch or two in my personal respect ledger.
“You still get a bunch of things right, so I'll keep reading. Hang in there (not literally!)”
Dave responds: Sometimes I share a meme not because I necessarily agree with it, but as a reflection of the zeitgeist. And that’s the case here.
No doubt you worked hard to attain your present circumstances. Point is, there are legions of millennials and Gen-Zers who feel that no matter how hard they work, they’ll never be able to live as well as the boomers of their personal acquaintance.
This might be especially so for the oldest millennials, now turning 45 (!) and approaching the midpoint of their working years.
Today’s not the time to get into the whys and wherefores of the younger generations’ resentments. Suffice to say they exist — and they’re going to come more and more to the surface in the years ahead.
No judgment attached here — just an early-wave Xer calling balls and strikes…
