Dr. Michael Mandel, Chief Economist and Vice President at Progressive Policy Institute, by contrast, leans into the idea that this build-out is more like building railroads than building Pets.com:
“We’ve gone through a long period where “physical” industries such as agriculture, construction, manufacturing, and much of mining have stagnated compared to digital industries. This stagnation in physical industries has especially hurt states such as Wyoming, which has barely grown since 2019.
AI has the potential to transform physical industries, boosting productivity and incomes and opening up new markets. AI will be especially beneficial to states such as Wyoming, which has shown no productivity growth over the past 15 years.
The growth of AI requires investment in large-scale data centers. Data centers are necessary, both to train the underlying models and to power the applications. This investment is no different, conceptually, from laying down rails for trains or drilling for oil. You need to spend on technology to get the benefits of technology, especially when dealing with the complications of the real world.
Indeed, China is pouring hundreds of billions into advanced technology industries, including AI. In this context, the US wave of data center construction and grid modernization looks like a necessity rather than an optional choice.”
