The AI Backlash Is Starting To Sting

 

“Anti-AI sentiment initially had been easy for technology's biggest players to ignore. Calls for bans on data centers or a coordinated slowdown of the technology's march so society can grapple with its dangers didn't gain much traction in the early boom years.

 

That's changing.

 

New York recently banned new large data-center projects for a year. Some American cities have enacted similar freezes.

 

In South Korea, workers went on a partial strike over Hyundai Motors' plan to potentially bring humanoid robots into its factories -- a first for the auto industry.

 

While those moves aren't holding artificial intelligence back on a grand scale, they pose a more immediate challenge than any placard-waving street protest or even violent threats to prominent AI figures that are increasing lately.

 

In the short term, more data-center bans like New York's -- or like the one Maine only failed to enact due to a gubernatorial veto -- might push developers to places seen as less politically risky.

 

Perhaps more concerning for the industry, though, a spread of moratoria could add a constraint to an already scarce market for data-center sites that have adequate access to power, water and other resources.

 

And that would be a real problem. It would sting for companies banking on the completion of data centers in jurisdictions where pauses are in place. But it would also raise the cost of leasing what limited data-center space remains.

 

Costs are going up across the computing supply chain because of surging demand for memory. That caused technology companies to increase capital-spending plans to levels that would have been unthinkable until recently. More cost pressures could cause companies to pull back on some projects.

 

Strikes and other forms of labor unrest are a real and increasingly immediate challenge.

 

Meta Platforms provides perhaps the largest and most acute example of this so far. Company-employee tensions frayed following Meta's full-on embrace of AI. Meta laid off thousands of people this year, a move it said was necessary to keep funding its AI ambitions. One measure of employee sentiment fell to its lowest level ever.

 

Then some former employees sued. Meta, they claimed, was using AI to target workers with disabilities or who were on parental or medical leave.

 

Sure, it is difficult to quantify the impact of those developments. But a restive workforce is at minimum a significant distraction for Mark Zuckerberg. The Meta chief has deftly translated AI into better ad sales, but needs to go much further with the technology to justify huge spending on it.

 

Social and political pushback against AI is likely to escalate in step with how effective the technology is at replacing human labor. How much the computing power behind it affects people's lives and the environment will also contribute.

 

The impact is becoming more tangible by the day for both businesses and their investors.” [1]

 

1. The AI Backlash Is Starting To Sting. Fitch, Asa.  Wall Street Journal, Eastern edition; New York, N.Y.. 22 July 2026: B12.