Tech
The public opposition to AI infrastructure is heating up
Across the country, discontent has exploded over the ever-growing glut of server farms that have accompanied the AI boom. Anger has grown so loud that it’s begun to shift legislative agendas. Some states and communities are mulling temporary bans on new data center development altogether. Earlier this month, New York joined the club, with a bold new proposal to halt the local cloud build-out in its tracks.
A new bill in New York State would impose a three-year moratorium on the issuance of new permits for data center construction throughout the state, while local regulators are given a chance to study the environmental and economic impacts the industry is having on communities. The bill’s co-authors, state senator Liz Krueger and Assemblymember Anna Kelles, have called the legislation the “strongest” introduced in the country.
While no statewide moratoriums have passed so far, local bans are proliferating fast. Several weeks before Krueger and Kelles introduced their bill, the New Orleans City Council passed a moratorium, pausing all new data center construction in the city for one year. In early January, Madison, Wisconsin, passed a similar law after protests erupted over regional tech projects.
Similar policies have also passed in droves of communities throughout construction hot spots like Georgia and Michigan, as well as in many other regions throughout the country.
Environmental activists have long taken aim at data centers, but the more recent concerns have come from high-level lawmakers, drawing on populist anger at the tech industry broadly. In conservative Florida, for instance, Gov. Ron DeSantis recently announced an AI “bill of rights” that gives local communities the right to limit new data center construction.
In liberal Vermont, U.S. Senator Bernie Sanders has suggested a nationwide moratorium. And in Arizona, where the political milieu is decidedly mixed, Gov. Katie Hobbs recently said she supported pulling the industry’s tax incentives. Politicians have even begun to fight over the topics, with the governor of Mississippi taking shots at Sanders online over his moratorium proposal.
The political resistance is coming just as tech companies commit more and more money to building out infrastructure. The four biggest spenders — Amazon, Google, Meta, and Microsoft — plan to spend a whopping $650 billion in capital expenditures over the next year, the vast majority of it going to data center build-outs. Even more spending is planned in the following years, as the companies race to secure as much compute capacity as possible.
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But the speed and scale of those projects has made them increasingly unpopular, according to recent polling. A recent Echelon Insights poll found 46% of respondents would oppose plans to build a data center in their community, compared with 35% in support. A different poll from Politico found that, while there is considerable concern about the facilities, many voters don’t have much of an opinion either way — making it possible for public sentiment to be swayed in either direction.
The industry is already spending big to attempt to change those numbers — at least in the regions where it matters. In January, the Financial Times reported that some of the industry’s biggest data center operators were planning a “lobbying blitz,” with plans to “boost spending on targeted advertising and engagement” aimed at the communities where they build.
Tech companies are also making real concessions, like the planned Rate Payer Protection Pledge that would make them responsible for supplying power to any new AI data centers. But it’s not clear those measures will be enough to bring the public around.
Dan Diorio, of the Data Center Coalition, argued, in a conversation with TechCrunch, that data centers should appeal to smaller communities because they provide revenue without straining those communities’ limited resources. If the incentives are cut off and companies decide not to build in those places, the revenue also won’t be there. “That’s where statewide policy considerations come in,” he said. “Are you going to limit communities in which these businesses could be a significant benefit for them?”
The logic behind pressing pause
In general, data center moratoriums are meant to give communities breathing room while policymakers study the potential costs and benefits of allowing such facilities to be built in their communities. The rate of construction in some states has accelerated at such a pace that communities are unsure of how the industry will impact them in the long run.
Justin Flagg, director of communications and environmental policy for Sen. Krueger’s office, told TechCrunch that the legislation was driven, in part, by what he called the energy affordability crisis in New York. Said crisis has troubled both rate payers and politicians.
A group of 30 state lawmakers recently called upon the state’s governor, Kathy Hochul, to declare an “energy state of emergency” in New York due to rate increases. While there are a diversity of factors at work in driving up energy prices, there’s a consensus that the growth in data centers is making the problem worse, not better.
“There’s broad discontent being expressed about energy prices,” Flagg said. “We certainly hear that constantly from our constituents, whose electric and gas rates are going up.” He added that local pushback was also being driven by environmental concerns — which he described as the “water impact and the noise and the local infrastructure impact as well.”
In response to those grid concerns, major tech companies — including Microsoft, Google, Meta, and OpenAI — have promised to pay for their additions to the electrical grid in the communities where they operate, often installing behind-the-meter power sources paired with the new data centers.
The Washington Post recently reported that Silicon Valley is increasingly looking to build its own private electrical supply — a kind of “shadow grid” — that can be used to operate the power-consumptive properties that are now fueling the AI industry. The strategy involves standing up massive new private power sources instead of relying on the public grid.
One example of this practice comes from xAI, Elon Musk’s AI startup, which — at the site of its massive data center in Memphis, Tennessee, known as “Colossus” — built a series of methane gas turbines that have been accused of polluting the local community.
The company’s efforts have already run into significant trouble. xAI had reportedly told local officials that, due to a legal loophole, the turbines were exempt from air-quality permits. In January, the Environmental Protection Agency ruled that Musk’s company was not exempt from the permits, making their previous operation illegal. Environmental activists, decrying the facility’s discharge of “smog-forming pollution, soot, and hazardous chemicals,” announced earlier this month that they planned to sue the company over it. Musk’s facility has since permitted its turbines.
As the xAI example illustrates, if the “shadow grid” strategy purports to solve one problem (public grid overload), it threatens to create a host of new ones — with environmental activists and local communities alike expressing concern for how the new facilities could spew pollution into people’s backyards.
At the federal level, the Trump administration — which has made AI one of its top priorities — has also sought to characterize the industry as responsible stewards of the communities in which they build. Indeed, Trump officials have floated a hypothetical policy to force AI companies to internalize the costs of their additions to local electrical grids, although the details on this policy remain vague.
Debate over taxes
For years, communities have incentivized data center development through tax breaks. Last summer, an analysis by CNBC found that 42 states throughout the U.S. either have no sales tax or provide full or partial sales tax exemptions to tech firms. Of that number, some 16 states publicly reported how much they had awarded to companies through tax breaks. The forfeited revenue amounted to some $6 billion over a period of five years, the outlet wrote.
Now, however, more and more states are thinking about turning off the spigot. In Georgia, for instance, a variety of bills were recently introduced that would crack down on the industry’s benefits. State senator Matt Brass, who has introduced a bill that would nix the server sales tax exemption, told TechCrunch that he doesn’t think tech companies need the extra money, nor does he think dispensing with the benefit will dissuade them from doing business in the state. “In Georgia, if you compare us to other states, our property taxes are low, our property values are low, our overall tax burden is low,” Brass said. “So, you know, our overall business climate is good. That should be the attraction.”
Brass, who chairs the state’s rules committee, told TechCrunch that he expects there to be significant support for his policy. A similar piece of legislation passed the Georgia legislature in 2024, but it was vetoed by the governor. Brass added that, were the exemption to be done away with, he believes it could generate hundreds of millions of dollars for the state.
In Ohio, a similar policy battle is currently playing out. A group of Democratic lawmakers recently introduced legislation that would — like in Georgia — move to nix the state’s sales tax exemption. A similar policy was introduced last year, but — like in Georgia — it was defeated by the state’s governor, Mike DeWine.
“The most ridiculous tax break on the books currently is for data centers,” one of the bill’s supporting lawmakers, state Sen. Kent Smith, recently said. “That tax break needs to end, for the benefit of everyone who’s got an electric bill.”
At the same time, there are still plenty of lawmakers who support the server sales tax exemption. In Colorado, state representative Alex Valdez recently introduced a bill that would enshrine data centers’ loophole for the next 20 years. Valdez told TechCrunch that the exemption is merely a carrot to get tech companies in the door. Once they set up a base of operations in the state, they become a source of passive revenue that inevitably boomerangs back to benefit the communities in which they operate, he said.
Tech
Light made a flip phone — it’s colorful and it’s cheap
Kaiwei Tang helped create the iconic Motorola Razr over 20 years ago. Now, 10 years into building Light, the startup behind the minimalist smartphone alternative Light Phone, he’s as surprised as anyone that his customers are begging for a flip phone.
“We’ve been interviewing young people that use flip phones for a few years,” Tang told TechCrunch, describing a pattern his team kept running into: Gen Z users love their flip phones but say the build quality is bad. “They’re describing the flip phones in negative language, but they stick with it, and they feel proud.”
So Tang and co-founder Joe Hollier had an idea. What if Light took the fast, custom software from its last three touch screen phones and put it into a flip phone? That’s how they decided to build the Light Flip, the most affordable device that Light has ever released.
“What we’re doing is offering the same Light Phone experience, the same Light Phone OS with our SDK developer program, all of the tools we already have today: alarm, calculator, calendar,” Hollier told TechCrunch. “It’s kind of the exact same experience, just one is fully tactile, no touch screen, and [the other] one is a complete touch screen experience.”
Pricing has always been Light’s hardest problem as a small hardware startup. How do you sell a “less” phone for a price people will actually pay, when the whole pitch is fewer features? Its previous release, the unlocked Light Phone III, retails at $799. But the Light Flip brings the cost down to $299 by foregoing a touch screen, NFC reader, and selfie camera. The Light Flip is also made of plastic, rather than sturdier aluminum, but that means that for the first time, Light can offer one of its phones in a range of colors: black, red, yellow, pink, navy blue, and light gray.
“I thought I was fully QWERTY, but I was having fun with the T9 predictive texting [the old-school method of typing multiple letters per number], so I can see myself going flip phone also for the colors,” Hollier said. “Just having a yellow phone gets me so jazzed.”
Beyond the sticker price, Light is also testing a financing play. It recently piloted phone contracts with Andrew Yang’s anti-doomscrolling carrier Noble Mobile. With Light’s own service plan, customers can get the Light Flip for a two-year contract at $39 per month; the Light Phone III will be available for $59 per month over the same time frame.
The Light Flip only has a 2.8″ OLED screen on the inside and no screen on the outside, as requested by users. There will be a small light on the front of the phone, however, so that you can see if you have notifications without flipping open the device. With 5G and 4G LTE connectivity, the Light Flip can download podcasts online and play music that you upload to your phone, which you can listen to via either a 3.5 mm headphone jack or Bluetooth headphones. It charges via USB-C, works with both eSIM and physical Nano SIM cards, and includes a 12-megapixel camera on the back.
The Light Flip is expected to ship in April 2027, which Light acknowledges is a long lead time. To keep preorder customers engaged (and, practically, to keep them from canceling before it ships), the company is launching a new “Flip Your Life” program, including bi-weekly newsletters to help people prepare for the lifestyle adjustment of ditching a smartphone. It’s a community-building move as much as a marketing one. By building a support network around the phone, Light hopes that the transition to using its products will be less jarring and that it sticks.
While Light believes that its phones can help people reclaim the time they may regret spending on mindless scrolling, the founders acknowledge that it’s not easy to quit smartphones cold turkey. It’s hard to sacrifice the convenience of instant internet access, Apple Pay, music streaming, and convenient communication tools like WhatsApp and iMessage, and it’s easier for the flip phone-curious to make this transition when they’re not going through it alone.
“I think something that’s so inspiring about this movement is it’s not coming from a place of just anger and hatred … It’s a movement of optimism, as well as skepticism,” Hollier said. “I think that’s what we’ve always tried to do with Light. We’re anti Big Tech in all these ways, but we’re always trying to show that the other side of life can be really simple and beautiful.”
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Tech
US threatens sanctions against Chinese AI models over IP theft
On Tuesday, Treasury Secretary Scott Bessent said the U.S. would examine open source models from China for signs of intellectual property theft, threatening sanctions against Chinese AI companies if IP theft is established.
“We’ve seen a lot of talk about open source models coming and threatening the large language models in the U.S.,” Bessent said on Fox Business Tuesday. “This administration supports open source models, but what we do not support is IP theft. If we see, especially, that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft.”
Bessent’s comments were first reported by Bloomberg.
The statement comes as Chinese models — most recently Moonshot AI’s Kimi K3 — are gaining in capabilities and popularity, threatening to harm the business models of top American AI firms like OpenAI and Anthropic, as well as their abilities to raise more capital to continue developing frontier models.
On Monday, Axios reported that the Trump administration is considering a wholesale ban on Chinese open source models, although others have disputed that claim.
AI companies have been warning for months against campaigns by foreign actors to copy their AI technology and redeploy it as open source. In April, the White House said it would work closely with AI firms to combat the theft.
Sanctions from the U.S. against Chinese models would add to the growing list of strategies the government is attempting to maintain the lead in the AI race. After restricting China’s access to advanced chips and tightening export controls, Washington is now signaling it may target the AI models themselves, a move that could mark a significant escalation in the technological competition between frontier labs and Chinese open source alternatives.
Model distillation is a technique that allows some of a larger model’s capabilities to be translated into a smaller system that’s easier to run — but not everyone agrees that distilling another company’s model constitutes theft.
Earlier this month, Microsoft CEO Satya Nadella criticized large labs for making just this assumption: “While the great innovation that comes from model providers having fair use rights to train models on public data is needed, I find it ironic that the status quo is to then turn around and impose restrictive terms on distillation.”
AI labs’ training practices continue to be a source of legal risk for the companies. Anthropic this week got the green light to start cutting authors checks as part of its $1.5 billion settlement after a judge ruled it had illegally downloaded and stored millions of copyrighted books to train its AI.
Furthermore, some in the industry argue that distillation isn’t the only reason China is catching up to U.S. AI companies.
“We know distillation to be a very small factor in the ability to create good models, and it’s a practice that everyone is doing, including companies in the U.S.,” Hugging Face CEO Clem Delangue said on a recent episode of TechCrunch’s Equity podcast. “If it were easy just to do distillation to get good at building AI models, there would be many other countries, including in the U.S., with much better open source AI. The reality is they have really, really good research teams in China…taking a much more open and collaborative approach to AI than in the U.S.”
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Tech
Threads rolls out parental supervision tools
Meta is bringing parental supervision tools to Threads, the company announced on Tuesday. With the new tools, parents and guardians will be able to view their teen’s time spent on Threads, set daily time limits, adjust sleep mode, and manage their privacy settings through Family Center, Meta’s hub for parental controls across its apps.
The rollout follows growing pressure on Meta from regulators and lawmakers to better protect young users online. The company has spent the last several years expanding parental controls across its apps in response to concerns over excessive screen time, harmful content, and teen safety, and is now bringing similar controls to Threads. It’s also worth noting that Meta, alongside other social media giants, is currently facing numerous lawsuits related to child safety.
Given these factors, it’s not surprising that Meta is finally introducing parental supervision tools to Threads, a platform with 500 million monthly users. The rollout comes three years after Threads’ launch in July 2023.
Parents and guardians will now be able to view how much time their teen spent on the platform each day for the past week, including their average daily time spent for the week. They will also be able to set a daily time limit and block access during select days and hours. If a teen uses Threads across multiple devices, like their phone and laptop, the time limit will apply to the total time spent using Threads.
Additionally, parents can limit or block their teen’s access to Threads at night, with notifications muted and auto-replies already on by default for all teens from 10 p.m. to 7 a.m. Parents also have the option to control who can tag their teen in posts on the platform.
Meta notes that teens on Threads already have built-in protections like private accounts and limits on the content they see. However, parents can now decide if teens under 16 can change any of these automatic settings to be less strict, the company says.
The parental supervision controls are rolling out next week in the U.S. Meta is planning to bring parental supervision on Threads globally by the end of the year, a spokesperson told TechCrunch.
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