Kevin Xu
Founder of Interconnected Capital, Writer of Interconnected newsletter, ex GitHub, Obama White House
“If you build a data center that hypothetically costs $100, only one to two of those dollars go to securing power. Only about 20 bucks out of the 100 bucks goes to building the concrete building, hiring the electricians and the laborers and all that. 70 to 80 bucks out of the 100 bucks is going towards buying the GPUs.”
ChinaTalk · Geopolitics & World Affairs · November 2026
Context
Xu proposes a data-center deal that makes tech companies pay for grid upgrades and union labor. His argument is that construction and power are a small share of total cost, so companies can easily afford to pay more for them.
Transcript
…around it so i'm going to be optimistic that we will get there i am also realistic um that you know it's there are going to be temptations to only focus on the kind of corrupt the headline grabbing parts of this and not on actually getting the policy right uh over the the the mid to longer term
kevin you want to talk about the ai of it all we've had um uh i've been enjoying watching your your data data center pause tracker um perhaps one of the earliest to this trend on the internet maybe the
maybe the earliest maybe the earliest yeah you know uh started tracking data center moratorium what back in january claude vibe coded a dashboard in march thinking this could be a thing and i would venture to say this issue is at least nationally the top three issue for all voters and in some states probably the number one issue that might have swung a governor race to one direction or the other right i think the texas governor race is exhibit a where very few on wall street thought this was going to be big enough issue that could help catapult you know kinojosa to the governor seat and the fact that she did They pulled that off, torched like a trillion dollar worth of market cap yesterday from Wall Street. You know, no big deal. But I think coming back to since we're doing prescriptive stuff, I actually think this is a winning issue for the Democrats if they know how to legislate this and this will actually get passed. I think one of the biggest misconceptions about this AI data center moratorium issue that I absolutely hated was that this is somehow a liberals hate big tech story. And that's it.…
Yeah, I mean, it's an open question, like if this is even turnaround a bull, but I guess on the other plus side, right? Like these aren't factories that are poisoning the water and like giving your kids cancer. They're just big places that may like have some sound issues and, you know, at one point
raised raised your power prices. But once you deal with that, but they could be,
right? They could be misperceived as such. That's the thing. It's like older generation of data centers, not the new ones, the older ones, they're all placed next to really big rivers for a reason, for cooling reasons, right? So if you're not in the weeds of how a data center works, you could very…
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