Evidence is rapidly accumulating to suggest that artificial intelligence could instigate widespread job displacement. Since 2023, entry-level job postings in the U.S. have declined by 35%, major technology companies have implemented extensive layoffs, and even prominent figures within the AI sector are issuing warnings about future implications.
During the Axios AI Summit in Washington on Wednesday, Senator Mark Warner (D-VA) shared concerning insights. He recounted a recent conversation with a venture capitalist who stated he was writing down software investments to zero, largely due to the significant advancements of Anthropic’s Claude. Furthermore, a major law firm reportedly informed Warner that they are no longer hiring first-year associates, as AI now proficiently handles much of the work previously assigned to junior lawyers.
Warner described the fear of AI-related job loss as "palpable," even as data from one AI company suggests that AI has not yet begun to eliminate jobs. As these anxieties intensify, they are increasingly shifting the debate towards determining who should bear the financial burden of this transition.
Senator Warner has proposed a solution: taxing the data centers that power the AI boom and utilizing that revenue to support workers through the forthcoming changes. While he has not yet introduced formal legislation, this concept is gaining urgency amidst growing public dissatisfaction with both AI and data centers.
Across the U.S., there is mounting resistance to data centers, including a bill introduced on Wednesday by Senator Bernie Sanders (D-VT) and Representative Alexandria Ocasio-Cortez (D-NY), which calls for a moratorium on their construction. The most vocal concerns revolve around noise pollution, environmental impact, and escalating electricity costs. However, beneath these immediate issues lies a simmering resentment: a reluctance to endure the potential adverse effects of hosting a data center locally, especially when it fuels technology that some fear will replace human workers.
Despite his colleagues' efforts, Warner does not plan to support their bill. Speaking at the event, he asserted, "A data center moratorium simply means China is gonna move quicker, and this is one where we can’t lose."
He added that "there’s no stuffing the genie back into the bottle" when it comes to AI and data centers. While Warner advocates for strict regulations to ensure data centers do not pass their water and power costs to residents, he told TechCrunch that he believes there is an alternative method for communities to "extract their pound of flesh" in a way that directly addresses underlying fears of job loss.
"I’ve thought for a long time there’s an obligation from the industry to help figure this out and help pay for it, but one of the questions I was asking was, Who should pay?" Warner told TechCrunch. "Should it be the chip makers, Jensen [Huang, Nvidia’s CEO]? Should it be the large language model companies? Should it be the Goldman Sachs of the world who are using these tools to cut back on a number of first-year associates?"
Ultimately, he concluded, he thinks the "easiest place to extract the pound of flesh is probably going to be from the data centers."
This could manifest as allocating data center tax revenue towards training new nurses or funding AI upskilling programs, provided there is a "tangible benefit to communities" as they navigate this economic transition imposed upon them by AI companies.
Warner views this strategy as a way to balance the necessity of building data centers with a clear obligation to the communities that bear their associated costs.
The idea is not without precedent. Warner highlighted Henrico County, Virginia, which successfully utilized tax revenue from a local data center to launch a new affordable housing project.
Finding a method to link data centers to a concrete community benefit will be crucial, he stressed, because otherwise, "the pitchforks are coming out."
The prevailing public mood suggests his concerns are well-founded. According to a recent NBC News poll, AI has a lower public approval rating than Immigration and Customs Enforcement (ICE), with 46% of registered voters viewing AI negatively compared to only 26% viewing it positively. In Virginia, this sentiment is reflected in a proposal to repeal the state’s tax breaks for data center construction, which cost the state and localities nearly $2 billion annually in lost tax revenue within one of the world’s largest data center markets. Warner anticipates that other states may follow suit.
He concluded by noting that AI and data centers, in their current context, are "easy to demonize."
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