Many Democrats — including plenty in California despite its tech sector — are declaring war on Artificial Intelligence (AI) and data centers. And this is not just among progressives: anti-tech traction is gaining among influential party leaders. This anti-growth, fear-based tech backlash stands in opposition to Democrats’ stated priorities, including job creation, infrastructure investment and widespread prosperity. If enacted, this agenda will blunt digital innovation and undermine national security and global competitiveness — on top of harming the Democratic Party domestically.
A year ago this week, the New Democrat Coalition Innovation and Technology Working Group, led by California Democratic Rep. Sam Liccardo, who represents the Silicon Valley region, floated a “New Democrat Innovation Agenda” to “unleash the full potential of American innovation.” This happened a few months after Democratic House Leader Rep. Hakeem Jeffries of New York visited Silicon Valley to “mend fences” with leading tech innovators from the region.
But since then, Democrats have taken a different path, introducing “a flood of AI proposals” that threaten to smother most facets of the digital economy. Rep. Frank Pallone of New Jersey, the lead Democrat on the House Energy and Commerce Committee, recently endorsed a national moratorium on new data centers. Pallone joins Rep. Alexandria Ocasio-Cortez of New York and Sen. Bernie Sanders of Vermont in calling for this federal ban on the engines of the modern digital economy. Even the idea of nationalizing AI firms has reached Congress, with Sanders proposing a 50% tax on firms with $200 million or more in annual gross receipts.
The backlash continues in statehouses, with more than 1,800 AI-related bills floated and no shortage of proposals seeking to ban data centers. In July, New York became the first state to block data center construction when Democratic Gov. Kathy Hochul imposed a one-year ban on new large data center projects.
Lawmakers in progressive states like California, New York, Illinois, Massachusetts and New Jersey are advancing heavy-handed AI regulations. If even a fraction of these bills become law, this growing regulatory patchwork will restrain innovation and tie smaller firms in red tape.
The prevailing Democratic thinking wasn’t always this way. A recent Chamber of Progress report observes that after a series of electoral defeats in the 1980s, a new generation of “Atari Democrats” made the case for technological innovation as a driver of job creation and American competitiveness. When President Bill Clinton took office in 1993, much of this vision was realized, including policies championing widespread internet access and a moratorium on discriminatory internet access taxes.
Clinton left office boasting that his agenda “created a strong economy spurred by new technologies, increased access to computers and the Internet,” and “put in place a strong research and development strategy that will continue to pay off.” The Chamber of Progress report adds that much of this tech optimism continued into the Obama years, with excitement surrounding his campaign’s social media use and his embrace of tech talent in government roles.
This warmth didn’t last. The report notes the 2016 presidential election as a turning point, with a shift away from “neoliberalism” in reaction to losing many working-class voters. This loss also created a shift among Democrats in which they attempted to blame “misinformation” across social media for their losses. Yet it is these voters who stand to lose out from this anti-tech pivot.
Data centers create the blue-collar jobs that politicians — and Democrats, in particular — have promised to resurrect for decades. In counties receiving their first data center, a Brookings Institution study finds a 4% to 5% gain in private sector employment, including an 11% jump in construction jobs. AI is also democratizing access to information and education, lowering the barriers to entry for career training. It is also empowering entrepreneurs to offload certain tasks, with 74% of small businesses now reporting a productivity boost from AI.
Nevertheless, growing tech hostility risks keeping transformative opportunities out of reach for the very working Americans the party claims to represent. And these concerns are not just theoretical. Much of today’s tech-doomerism echoes European Union (EU)-style red tape and risk aversion, and in many cases, current proposals go even further.
Many Democrats now want to import this failed European vision to America. The combined effect of these policies would be profoundly destabilizing and destructive. It would undermine America’s innovation culture, hurt our ability to remain at the cutting edge of global technology markets, and run counter to an agenda of uplifting everyday Americans.
The Atari Democrats of the early internet age inspired a generation and helped unlock new economic dynamism. They did it not by fearing technological progress, but by embracing and unleashing it. It is high time Democrats return to this optimistic spirit they once celebrated.Ed Tarnowski is a resident fellow with the R Street Institute’s technology and innovation team, where Adam Thierer also serves as a resident senior fellow.