Professor Kevin Frazier - Is New York pushing AI somewhere else?

States want AI jobs and investment, but not everyone wants the infrastructure that comes with it. Could those decisions reshape where innovation happens?

Professor Kevin Frazier is a Senior Fellow at the Abundance Institute. He joins the show to discuss New York's approach to AI infrastructure, data centers, and what it could mean for economic growth and technological development.

Transcript

SPEAKER_00 0:10

Hey, welcome back to the Larry's Larson Show. It's a pleasure to be with you. Consider this. New York State wants AI jobs, they want the data centers, they want the tax revenue they bring, but they don't want the power plants or the infrastructure to actually support them. Can you have one without the other? I thought I put that first to Professor Kevin Frazier, who is a senior fellow at the Abundance Institute. Professor, welcome back.

SPEAKER_02 0:34

Lars, thanks for having me on.

SPEAKER_00 0:36

What should we make of the fact that Governor Kathy Hogel of New York State is now banning large data centers and whether or not that ban makes sense and whether or not it makes sense this late in the game?

SPEAKER_02 0:49

So first and foremost, this has to be seen as a very big issue for all of us who are cheering for the U.S. to lead on AI. Because when it comes to data center development, this is essential to making sure that U.S. models continue to be world-leading and that we can all make use of this incredible technology. And so when you have single states like New York take unilateral action to prohibit the development of data centers, it's not as though we're going to see these data centers disappear. Instead, we're going to see that data center development occur elsewhere, probably resulting in some of the harms that the governor appears to be concerned about, uh, driving, for example, data center development in areas that may not have as much water or as a reliable of a grid. And so this is a very short-sighted action that uh should cause Congress to really recognize that they need to act now.

SPEAKER_00 1:44

Aaron Ross Powell Well, should they, though, tell states, I mean, we're we've got a supposedly uh enumerated list of things the federal government does, and the rest is left to the states. If a given state says we're not choosing to have that kind of business in our state, should the federal government override that?

SPEAKER_02 2:01

So, Lars, I'll go full uh law professor nerd on you for a second. And uh, you know, I'll I'll bring up a great case uh called Castle. Uh Castle dealt with a Iowa law in which Iowa tried to ban any truck that was 65 feet or longer from going through the state of Iowa. And so the idea was: hey, this is a safety justification. Uh, Iowans don't want these big trucks coming down our roads. So what are we going to do? We're going to force all of them to go through Wisconsin. We're going to force them to go through all of these other states. And meanwhile, Iowa will just benefit from the parts of the national infrastructure that it wants to benefit from. And the Supreme Court decide. Struck down that law. It said, hey, look, we we hear that you may have some idea of a safety concern, but those safety concerns have to be weighed against the larger national interest in a nationwide infrastructure.

SPEAKER_00 3:01

And Marshall, didn't that one did that one come right up against the commerce clause in the constitution? So they they they had their work cut out for them if they were going to try and do something like that, didn't they?

SPEAKER_02 3:12

Yes. So this was an instance uh where there was a different posture here, where we saw a state taking in affirmative action, uh, for example, to limit the commerce that was going to be available in that state. It's going to be a little bit trickier to see the direct application of a commerce clause challenge here. Uh instead, it would likely be something we'd look through uh under the dormant commerce clause, which is as murky as a puddle in Portland. Uh so it would certainly be uh a tough one to sort through.

SPEAKER_00 3:43

Well, and and I wonder, because look, uh in terms of the data centers, I've got a lot of questions because one of them is are we developing all this technology allegedly to beat China to the punch, and then China will simply rip off the technology that we've spent all this energy and uh electric energy and water to develop, and the Chi-Cons will simply rip it off because they have a history of doing that, and there are already predictions right now that they will try to do just that. In fact, I wouldn't put it past the Chinese communists to say, let's get America afraid of a competition with us. Let's get them to develop the technology, and the minute they have it, we'll simply rip it off. And then you'll have communities that really are seeing their power bills go up and water supplies being diminished, and all of it may not even end up benefiting us anyway, because it'll get ripped off straight to communist China.

SPEAKER_02 4:35

Yeah, so so there's a lot to tackle there. Uh first and foremost, I'll start with the water question. And I think it's really important to dispel that water should be a concern in these data center debates. Uh, for the folks who are up in arms about water usage here, it's worth recalling that data centers currently use 3% of the water consumption that golf courses use across America. So if you are uh you know concerned about that, uh, you know, stop going to the reserve out there in Portland and uh pick a pick a different issue to fight about. Um I do agree that the energy concerns here should be top of mind for a lot of Americans. And it's real that absent action from Congress, we could see that Americans will have their electricity rates rise. Fortunately, we've seen that this is a priority of the administration and that there's bipartisan opportunities in front of Congress right now to enact the ratepayer protections that many of the labs have already signed up for. But to your point, Lars, of what are we doing all of this for? Is this just an expert Machiavellian move by China? Uh, there are real concerns about what folks in the industry call distillation, that effort of taking whatever the latest and greatest model was developed by the US and uh basically using it to train their own models at a much lower cost. And this is where we need to see continued investment in technical solutions that can reduce the odds of that occurring. Uh, right now, that's something that Anthropic, for example, has pushed for from Congress to take more actions to reduce the odds of distillation. And that's something that, again, is in front of Congress. They've got, I think, 40 working days left before they go chill out for uh the rest of the year. So uh this is another drum for people to beat to make sure that, yes, this infrastructure we're bu we're building out is going to be used in as efficacious a manner as possible.

SPEAKER_00 6:29

Well, let's hope so. Professor Frazier, thanks very much. I appreciate the time. Always a pleasure of ours. Thank you. You bet. That's uh Professor Kevin Frazier from the Abundance Institute. Let me get to your calls. I know DeAndre's been waiting quite a while. Hey DeAndre, thanks for listening on the Mississippi Super Talk Network. What's on your mind?

SPEAKER_01 6:48

Uh I saw last week at the poll about Harriet Tubman. I most definitely believe that she should be able to replace Andrew Jackson on on the $20 bill. That's the least that could be done.

SPEAKER_00 6:59

For Harriet Tubman.

SPEAKER_01 7:01

Yes.

SPEAKER_00 7:02

Okay. Uh because you understand that was introduced by Obama. It was supposed to happen by 2020. It didn't, and now the Trump administration said it's not going to. All the other people, other than Ben Franklin, who've been on U.S. currency, have been presidents. Is it justified then in the case of Harriet Tubman?

SPEAKER_01 7:21

Uh yes, because all those presidents were evil uh colonizers, some uh also slave also. They were all evil.

SPEAKER_00 7:32

They were all evil? Yes. By what definition? Why?

SPEAKER_01 7:39

Uh none of the things that they ever did, said, or acted on were beneficial to other to people other than white males. So hold on.

SPEAKER_00 7:47

When when when the United States was established and a revolutionary war was fought, and we established that this country recognizes the God given rights of citizens, that didn't have any value?

SPEAKER_01 8:00

Uh no, it didn't.

SPEAKER_00 8:02

Why not? I think my God-given rights are important, and I'd rather live here than anywhere else, because everywhere else, whatever rights you have are the ones the government gives you. In the case of America, America recognizes my God-given rights and even has a bill of rights to protect them.

SPEAKER_01 8:19

I mean, that's for you being a white male in America. Even during um the independence, um, black people were still enslaved in America. So I I didn't celebrate the fourth of July. I don't see it as a celebration, I just see it as another day. And if I'm gonna celebrate it's because I'm gonna be with my friends, and one of my best friend's birthday is the fourth. Other than that, the fourth of July doesn't mean anything to me as an American.

SPEAKER_00 8:40

Interesting. Thank you, DeAndre.