The Morning Download: Data Centers for Eternity

Good morning. The data center policies that states are enacting now could reverberate for decades. We think of the U.S. economy as one large market, but it also functions as a web of regional and local hubs. Those hubs often specialize in certain industries, be it furniture manufacturing or advertising. Silicon Valley, San Francisco and Seattle became global hubs for technology, and New York City and London are making their presence felt in AI as well.

The data centers under construction across the U.S. could become the nuclei of future local and regional economies. If that is the case, today's policy decisions could end up mattering more than we might think.

Meanwhile, farms in Pennsylvania are being sold for tens of millions of dollars to data center developers. And Meta Platforms has scaled up the size of its massive data-center project in Northeast Louisiana to 5 gigawatts of compute capacity and said it would now cost more than $50 billion, the WSJ reports. The project in the rural Richland Parish region was originally pegged at a cost of $27 billion.

It’s hard to predict what the implications of these policy environments will be. Perhaps the data centers will lead to the formation of booming local economies, although that could come at a cost in terms of the environment or overall livability. It’s too early to say. But one thing is clear. It’s difficult enough to move the money and human capital behind a tech hub from one state or city to another. Data centers, given their massive costs and physical footprint, will be far, far less mobile. Whatever the consequences of today’s data center policies may be, we’re going to have to live with them for a good long time. We should think hard about those decisions and be careful of what we wish for.

• Meta Platforms is aggressively pushing AI-enabled smartglasses, but the recording-capable devices face mounting privacy backlash, with advocates and courts objecting to features like facial-recognition "NameTag" and audio and video capture that could operate without visible recording indicators, the WSJ reports. In one incident earlier this year, Meta employees were asked to take them off at a trial where Chief Executive Mark Zuckerberg was testifying.

• Intel said it plans to invest $5.71 billion to expand its manufacturing site in Ireland, part of the company’s latest effort to meet growing demand for AI and high-performance chips, the WSJ reports.

• Nvidia has cut more than half its authorized Asian buyers after implementing stricter compliance checks aimed at preventing advanced AI chips from reaching China. FT reports that the crackdown includes the involvement of the U.S. Department of Commerce. 

• Chinese startup DFSX says its new DF1000 AI chip can match some mainstream Western chips built on far more advanced processes and it does so using a fully domestic supply chain, enabling it to bypass restrictions on high-end technology, WSJ reports.

• Some U.S. data-center developers are working with bankers to sell tens of billions of dollars in majority equity stakes this summer, as private-equity firms rush to capitalize on soaring AI-driven demand for computing power, the Journal reports. Among the largest potential deals in the works is the sale of a majority stake in Dallas-based DataBank, which could reach as much as $25 billion.

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Follow Isabelle Bousquette on LinkedIn, Instagram, X, and TikTok for more behind the scenes on her tech and AI coverage, and lately, her contributions to the WSJ Leadership Institute's new Executive Resilience series, where she's profiling America's top execs about their fitness and wellness habits.

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Steven Rosenbush is chief of the enterprise technology bureau at the WSJ Leadership Institute. He also has a column. You can follow him on LinkedIn.

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