Renowned tech investor Gavin Baker: Data centers are creating a large number of high-paying blue-collar jobs.

In a recent podcast episode released by a16z, tech investor Gavin Baker and a16z partner David George had an in-depth conversation. Baker stated that the data center construction boom can boost tax revenue in small towns, create high-paying blue-collar jobs, and allow ordinary wage earners to benefit from AI infrastructure investments.

Baker stated bluntly on the show, "You're against data centers? Let me tell you, that might be the best thing for working-class Americans ."

How Data Centers Can Transform a Small Town

Baker's core argument is built on a specific economic reality: natural gas in the United States costs only two to three dollars per million British thermal units (MMBtu), while in Europe and Asia it costs 20 to 25 dollars.

He pointed out that natural gas is a significant input to electricity costs, which are a key cost item for almost all manufacturing industries. This could provide impetus for the reindustrialization of the United States.

Regarding employment, Baker stated, "Learning to be an electrician, plumber, or HVAC technician now can earn you an astonishing income, which in some ways may even be higher than the net present value of going to university."

He cited the specific example of Loudon County, Virginia—which is also the county with the highest per capita income and the highest density of data centers in the United States. Baker said that there is already a wealth of data showing that when a data center moves into a small town, tax revenue does not double, but increases tenfold, "revitalizing declining small towns across the United States."

Regarding the environmental controversy, Baker believes that the water consumption problem of data centers is "completely exaggerated and not a problem at all," and points out that data centers generally use natural gas, which is "a fairly clean fuel."

The wave of opposition to data centers

Baker made a direct characterization of the opposition to data centers during the program.

He stated that amidst the opposition to data centers, " there's an organized, funded movement , which I believe is largely being disseminated through TikTok."

Baker argues that the AI industry's failure to effectively address these criticisms stems from a lack of proactive discussion about the real, positive impact of data centers on ordinary Americans. He specifically names Meta as the best example, citing Sheryl Sandberg's presentations of small business benefits during Meta's early IPO earnings call as a reference. He calls on the entire AI industry—including SpaceX, Anthropic, OpenAI, Google, Nvidia, AMD, and Broadcom—to share real-world business examples and genuine American stories.

A greater risk is insufficient supply.

Baker refuted the prevailing market concerns, arguing that a severe shortage of supply is a more real threat than over-construction, and that this situation could persist until 2028.

His logic is that there are currently fewer than 10 million heavy AI paying users worldwide, while there are 1.5 billion knowledge workers globally, and the demand is only just beginning to spread. Once the user base expands from tens of millions to hundreds of millions, the existing computing power reserves will be far from sufficient.

Baker warns that if demand expands rapidly while supply cannot keep up, the cost of accessing AI could rise sharply, rather than continue to decline as the market expects. He cites Marc Andreessen's view that token costs could even increase tenfold.

What worries him even more is the ripple effect. Baker said that if there is a severe shortage of computing power, the end result will be "computing power inequality"—large companies and the wealthy will be able to afford computing power, while ordinary users will be excluded.

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