How the Data Center Dividend Can Make Shiny Happy People - Newsweek

Do you think Donald Trump is a secret R.E.M. fan?

Trump was, wittingly or not, channeling “Shiny Happy People” when selling the virtues of data centers alongside some of Big Tech’s biggest names this week. They were gathered together to discuss how to win the global AI race without killing everyone. A noble mission.

“This is a group that loves local communities,” Trump said, as the tech leaders around him stared like reluctant teenagers visiting an elderly relative, showing little enthusiasm for their supposed love of communities.

These billionaire nerds are going to “work with local communities” on data centers to make them “very, very happy,” Trump said. How? By pumping them with enough money to buy off their concerns about these resource-devouring behemoths.

Put another way, the tech brolionaires are going to throw their love around, take it into your town, and then put it in the ground as foundations for a data center. But don't worry, where the flowers used to grow, gold and silver will shine instead.

And the local people will all be shiny happy people holding hands. No time to cry, happy, happy. You get the tedious drift. If you didn’t understand why a lot of R.E.M. fans kept it secret before, perhaps it’s a little clearer now.

Trump reached into his own political lexicon for what to brand this inducement for reluctant residents: “you could call it a dividend because a dividend sounds right.”

Ah yes, Trump’s solve-all “dividend,” currently going through a midterms test run. The trouble is, aren’t data centers just too unpopular for this form of legal-but-unsubtle bribery to work?

In Congress, data centers are the AI issue scrambling the two main parties. Among voters, opposition crosses party lines, and the facilities have become attack-ad material before November’s midterms.

The polling is grim reading for the likes of Anthropic co-founder Dario Amodei and OpenAI CEO Sam Altman. Pew found that 60 percent of Americans would be uncomfortable with a new data center nearby, including 54 percent of Republicans.

Yet research on paying communities to accept other unwanted projects suggests Trump’s instinct is pretty sound. Money can buy goodwill, with caveats.

In Hazle Township, Pennsylvania, NorthPoint Development has promised every eligible household $10,000 if it builds its Project Hazelnut campus, as part of a $165 million package that also pledges $7 million a year to the township for 15 years.

That’s some dividend, but the offer hasn’t quieted the opposition to the data center at the heart of it all. Many local residents still oppose the data center, and city officials have previously rejected the development.

“Ten-thousand dollars doesn’t match how much it’s going to tank my property value,” Jeff Fasnacht, a retired teacher who lives nearby, told The Wall Street Journal.

Still, throwing money at your opponents isn’t futile in these fights.

In a recent Boston experiment, doubling a developer’s offer from $1,500 to $3,000 per person raised support for nearby housing by 2.6 percentage points—modest, but meaningful when proposals averaged 49 percent support.

Across Michigan wind-farm townships, surveyed landowners paid at least $1,000 a year were more supportive of additional turbines than those paid less or nothing.

In Pennsylvania, a 2016 study linked more fracking “impact fee” revenue to greater support for a hypothetical gas project. Among residents already aware of fracking, the link was stronger when money went to municipalities rather than counties.

The same literature helps explain what’s happening in Hazle.

Among 520 Michigan landowners surveyed twice after a wind project opened, views diverged mainly on whether people judged the planning process fair, and only secondarily on whether they had a financial stake.

A national survey of 1,705 wind-farm neighbors found compensation’s effect lost statistical significance once they accounted for broader attitudes. The authors called it “not a panacea.”

In Boston, money stopped mattering once proposals included affordable housing, which the researchers argue triggers symbolic reasoning.

And a classic Swiss study found that offering compensation roughly halved acceptance of a nuclear waste site. A civic duty became a transaction.

Hazle’s offer trips nearly every wire. It came in June, seven months after township supervisors denied the project’s land-development plan and after a county judge turned down the developer’s appeal.

It pays out only once the first building earns a certificate of occupancy. The fight has become symbolic, giving it coherence and a marker of local identity. At a township meeting in June, opponents wore “Project Hazlenot” T-shirts.

Trump’s own dividend is instructive.

At the Republican National Convention in Dallas on September 9, he promised $5,000 to every adult citizen if, and only if, Republicans keep Congress.

It is a temptingly juicy offer. More registered voters favor the idea than oppose it, 48 percent to 40 percent in an Economist/YouGov poll. But here’s the rub for Trump: 57 percent think he won’t deliver. His dividend has a credibility problem.

The data center dividend has the opposite one. In Hazle, the worry isn’t that the developer won’t deliver. It’s that it will.

The check arrives stapled to the building nobody really wants, even if anyone is tempted by the moolah.

Alaska shows a lucrative model. It has paid residents an annual dividend since 1982, paid for after the first year by earnings on a fund built with the state’s mineral royalties, communities rewarded for the resources around them.

Nobody has to approve a project to receive it. The money arrives every year, a share of what the ground has already yielded. Interfering with it, a paper from the libertarian Cato Institute notes, risks political suicide.

The same paper also argues, however, that AI’s proceeds don’t fit Alaska’s logic because it is neither geographically fixed nor extracted from a finite commons.

A data center, though, is fixed in place. It occupies local land and draws on the grid, and it often consumes vast amounts of water, making it more of an oil field than an algorithm.

The idea crosses party lines. Florida’s Democratic Senate nominee, Angie Nixon, has floated Alaska-style dividends for data center communities. Democrats like dividends too, it turns out.

The research hints at a better design for how the money should flow to communities if developers want to make progress: pay like Alaska, not like a campaign. That means paying by formula, through local institutions, for the life of the facility, and agreed before the vote rather than after a rejection.

Whether it works for data centers remains to be seen. If towns still say no at the rates polling implies, then public anger is beyond purchase.

But communities may yet be made happy, as Trump says—even if the price is living next to a shiny data center.