Stephen Balaban, co-founder of the AI cloud provider Lambda, closed out TBPN's return show with a long argument about the politics of data centers. He said the fight over them should be about facts rather than about whether China is behind the criticism, walked through what a single site pays a community and what it employs, made the case that offshoring the build would be a national tragedy, and described the afternoon a model he relied on went away. The news discussion the hosts ran earlier in the show is covered in a separate summary.
👤 Guest: Stephen Balaban, co-founder of Lambda, the AI cloud provider that builds and operates GPU data centers including a site outside Kansas City
🎙️ Hosts: John Coogan and Jordi Hays, who present TBPN live on X and YouTube every weekday
📰 Published: 31 August 2026 on YouTube (TBPN)
🔴 YouTube | 🟣 Apple Podcasts | 🔗 Show notes | ⏱️ 2 hr 24 min | ✅ Time saved: 7 min
Key Takeaways
Arguing about whether a bot farm is Chinese is a distraction from arguing about the facts
"So I think that it's really important to not get lost in sort of, is this a Chinese bot farm? And just focus on bad facts and just bad information."
Most new sites use closed-loop cooling, so the water objection is aimed at the old technology
"It's a closed loop water system where the water never even leaves the facility at all."
The host cited polling in which one clarifying sentence moved net approval by about 30%
Anti-AI content gets a hundred times the reach, which is a distribution problem rather than an argument
"And just AI negativity or content that is negative towards AI gets a 100 x the reach."
The jobs case is honest about being smaller than a steel mill, and he puts a family at the table
A Kansas City site: 300 construction workers, then "50 full time jobs. Many of these making over a $100,000 a year."
One 10,000-GPU site is committing to $47,000,000 of property tax over five years
Communities that take data centers, industrial development and new power plants end up with lower rates, he said
Local control is not a concession, it is the system working
"This is decision making that is happening on the very, very local level." — no eminent domain, no federal override
Compute is a strategic asset, and he learned what losing it feels like when a model went away
"I want patriotic models."
"And the second one is the hard one, which is what happens when they cut it off?"
The unions are on the other side from where the coverage puts them
In a Kansas race, steamfitters and other workers' unions have aligned behind the data center bill
His answer to the coming emissions fight is the grid mix, not a defense of emissions
80% of new American megawatts are solar or storage, and he says the same is true of what China is adding
Battery storage is the unsung fix, and the backlash has already found it
"People don't really understand how much BESS and battery electric storage has been a huge godsend to the grid."
Argue the Facts, Not the Flag
Coogan opened by handing him the thread from earlier in the show: Jordan Schneider had brushed off the idea that the anti-data-center movement is a Chinese bot farm, noting the evidence amounts to a couple of reports of a few hundred accounts.
Balaban would not fight on that ground at all. "So I think that it's really important to not get lost in sort of, is this a Chinese bot farm? And just focus on bad facts and just bad information."
"Because, that's the fundamental thing, right? You know, misinformation is like most readily solved by just disproving sort of, and just showing what's real and what's not."
Closed-Loop Cooling Is the Fact the Polling Turns On
Coogan brought the show's own number. Polling on data centers is broadly terrible, he said, but when respondents were told that data centers recycle water much as a car wash does, "the net approval score improved by like 30%"
Balaban said the framing is accurate for what is actually being built. "So for example, the vast majority of new AI factories that are being built Mhmm. Are completely recycling the water and using a dry cooler."
"It's a closed loop water system where the water never even leaves the facility at all."
"And so that's just completely different from the old technology, which is being described, is a heavier water consumption, which is evaporative cooling."
Coogan's objection was about who ever hears it. Someone who is not interested in technology but is frightened of AI is not going to spend a free five minutes doing diligent research online
Anti-AI Content Gets a Hundred Times the Reach
"And just AI negativity or content that is negative towards AI gets a 100 x the reach."
Coogan said the bias is structural rather than about AI. The history of a company will always lose to the shocking downfall of that company
He relayed Taylor Lorenz's claim that making anti-AI content on YouTube is profitable, and that a number of AI safety organizations quietly pay large sums for undisclosed propaganda
Balaban declared his own side rather than pretending to neutrality. "I'm team America. I'm team re industrialized." — he was wearing the sweater to prove it
The Jobs Case Is Smaller Than a Steel Mill, and He Says That Anyway
He conceded the scale before making the argument. "Look, this is not going to be the same level of job production as an automotive plant or steel mill. But these are still net new jobs."
"And so, for example, we've got a data center out in Kansas City and 300 folks worked on it during the construction period and 50 full time jobs. Many of these making over a $100,000 a year."
The rhetorical move is to put an opponent at a table with the families. "What are you I would ask to somebody who's against it, what are you going to say when you sit down at a dinner table with these 50 families that this data center is supporting and say, well, no, I don't think you should have that job because I don't want an AI data center."
"When they're the same people who are using the data center to go on post on YouTube or to use the AI services."
Local Control Is Not a Concession, It Is How the System Already Works
Hays asked where he lands on local versus national regulation, noting Bernie Sanders has drawn attention to the issue federally, and that as an American it feels more comfortable if West Texas can say yes while another town says no.
"Yeah. So first of all, absolutely. Look. That's how our system works. Let's just be clear here."
Nothing is being forced through. "You know, this is not, there's not some sort of, national eminent domain that's being pulled like we have with the construction of railways"
"This is decision making that is happening on the very, very local level. And some places are not going to want it. And some places are going to welcome business."
He went further than the question asked. "I think that should members of the community have voice? Yes. Should property owners have a voice? Yes. Absolutely." Anyone with an externality next to their property has a voice, and as a property holder they have a great deal of it
The number he offers a community is the tax bill. "So for example, going back to that Kansas City data center, it's a 10,000 GPU data center. And we are going to over the next five years, at the very least, be paying $47,000,000 over five years in property taxes."
"Because as evidenced by a bunch of research, communities that welcome data centers and industrial development and new power plants have lower rates." — lower tax rates and lower utility rates both
He expects reputations to form: some communities will become known for welcoming the investment
Offshoring the Build Would Be a National Tragedy
Coogan raised the historical pattern — when the business environment turns hostile, American executives offshore almost immediately — and asked what stops developers building in Mexico or further afield.
Balaban did not hedge. "It would be a national tragedy for in the just in the very moment where this country needs to rebuild our grid."
The grid demand is broader than data centers. "And it's not just data centers. Everybody wants to drive EVs."
"we're bringing on more solar than we have in the history of the country"
"80% of new megawatts coming online into the American grid are solar or storage."
"I want those jobs here in The United States. I want those investments you made here in The United States. AI is a national strategic asset in my opinion. Compute is a national strategic asset."
The chain he cares about runs from AI to the grid to heavy industry. He said the way AI is driving the development of the grid will pave the way for more industrial onshoring back to the United States, naming micro mills, turbine manufacturing and specialty metal smelting — the high-energy-input processes
Coogan's version of the same point was that Colossus went into an old washing-machine factory that had gone out of business, and that abundant energy and industrial capacity might bring the washing-machine manufacturer back
"And there's gonna be a lot more jobs because by that, and it's a huge virtuous cycle."
Patriotic Models, and the Afternoon a Model Was Switched Off
Coogan asked whether there is a national-security case for compute being physically in America, separate from the economics.
Balaban split it in two. "So I you know, there's the soft one and then there's the hard one."
The soft one is alignment with national values. "The soft one is sort of how important is it to have values models that have values that align with American values and how patriotic is your model? I want patriotic models."
The hard one is dependency. "And the second one is the hard one, which is what happens when they cut it off?" Coogan said that is the part that worries him
He has already run the experiment by accident. "And we all experienced this when Fable went away for a little bit."
"I said, wow. This is what it feels like to have sort of the equivalent of electricity cut off."
He was vibe coding at the time and had to fall back to Opus: "And it felt like a huge step back."
His immediate thought, he said, was that intelligence is as much a strategic asset as the grid itself
The Politics Are Going National, and the Unions Are Not Where the Coverage Puts Them
Hays asked what to expect for the rest of the year — whether this stays a local matter.
"There's It's going national. It's going national. Right now." He expects the volume to rise into elections and then fall back
Hays's read was that politicians on both sides have worked out that opposing it wins votes. Balaban said the picture is more mixed than that
"There's a multiple races right now. For example, one in Kansas where they're the where the steamfitters unions and the different workers unions are actually aligning on the pro data center side of things because there's so many jobs created, there's so many big deals that are created from these data centers"
"That a lot of the labor unions are actually on the side of pro data center now."
"Because you know, you've hearing the media, oh, this is a this is" a bipartisan anti-data-center movement — and he says no, there are people on both sides who are supportive
He then contradicted his own earlier prediction, and both versions are on the record. "I think that you're gonna see the volume not turned down after elections."
His closing position is a code of conduct rather than a defense. "And then finally, I think it's healthy debate and communities should have a decision about who they wanna work with. And that data center providers should be doing their best to not be influencing rates any direction other than bringing rates down for everybody, and being a good member of the community. Pay your taxes, participate in building ecosystem of businesses around you, and, continue to make great high paying jobs."
The Next Fight Is Emissions, and His Answer Is the Grid Mix
Coogan set up the problem he sees coming: the water debate came out of what he called some mediocre miscalculations, and technology people are fair to brush it off, but on energy and natural gas there is real data. If compute triples for a couple of years and is powered by gas, the headlines convert data centers into emissions and into plane flights.
Balaban's first answer was about the audience, not the numbers. The debate "is not something that needs to be won with the Silicon Valley Twitterati, exotic, whatever you want to call the people" with their keyboards
"It's the debate needs to won by the people who are in the communities affected by this."
His second answer was the mix. "The second one is more than ever, like I said, 80% in 2026 is solar and storage. These are renewable things."
The policy ask is interconnection, not permission to burn gas. "And so I think that there's needs to be a lot more deregulation with regards to expediting interconnects."
The alternative is worse on its own terms: "So that way, a lot of this behind the meter stuff, which is less efficient. Right? You know, when you have a behind the meter, it's simple cycle as opposed to combined cycle natural gas, and it's less efficient."
"So we should really get to the point where we're encouraging grid interconnectivity and expediting that process. That's, I think, the number one point I would say from a policy perspective."
On water he offered a denominator. "But, look, at the end of the day, every American consumes about 600,000 gallons a year of indirect water consumption. So next time you see a big number, divide by 600,000"
Coogan's worry was about credibility rather than truth. If the viral claim is off by three orders of magnitude, the industry ends up fighting on its back foot instead of starting from a grounded position
Balaban's counter was not to concede the premise. "But I think that the other aspect of it is just to not set with, oh, well, emissions are bad."
"As a country, we have a graph that looks like this in terms of energy production. China's got a graph that looks like this for their energy production. And guess what? All of their energy is also solar now."
"80% plus of China's energy is solar and storage."
"And so I think we need to get you know, the emissions will come down naturally as the grid transforms to more of a renewable and storage grid."
Batteries Are the Unsung Fix, and the Backlash Has Already Found Them
"People don't really understand how much BESS and battery electric storage has been a huge godsend to the grid."
The opposition is already on the roadside. "And there's I've already even seen I've driven through parts of the country where I've seen anti BESS."
He takes the concern seriously and then puts it in a category. "And I think there's concerns and these are rightful concerns that like, okay, they might catch fire and, know, cause a fire or emit, chemicals when they're on fire. But this is just like sort of, know, any industrial asset that's generating electricity has like some worst case scenario."
Coogan's analogy was a gas stove left on
"It's probably the same critiques if you were to go back to automotives." — cars when they first arrived, and refrigerators
His last word was the trajectory. Getting America competitive again on generating energy, "whether it's from renewables or otherwise, it's gonna inherently be 80% mostly renewables anyways from the trajectory that we're going in, I think."
He signed off saying he had an idea he would rather send by direct message than say on air
Balaban's bottom line is that the data center argument will not be settled by disproving a foreign influence campaign or by winning technology Twitter, but by what a specific community can see on its own tax bill and payroll — and that the emissions case largely answers itself as the grid turns over to solar and storage.
Products, Companies & Tools Mentioned
Lambda (Balaban's company: an AI cloud provider whose Kansas City site he uses throughout as the worked example — 10,000 GPUs, 300 construction jobs, 50 permanent ones and $47,000,000 of property tax over five years)
YouTube (Where he says AI-negative content gets a hundred times the reach, and where Coogan says the negativity bias predates AI entirely)
Opus (What he fell back to when the model he was using went away, and the fallback that "felt like a huge step back")
Fable (The model whose brief disappearance is his evidence for compute being a strategic asset — he compared it to having electricity cut off)
Colossus (Coogan's example of AI reusing dead industrial capacity: built in an old washing-machine manufacturing facility that had gone out of business)
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