Krugman calls AI a technology of, by and for oligarchs, but the data center buildout is already handing ordinary Americans construction jobs, tax revenue and consumer surplus.
Krugman calls AI a technology of, by and for oligarchs, with the benefits never reaching ordinary Americans. This piece is a rebuttal.
The construction work is real
Data centers need buildings, power and pipework. Krugman says only about a third of a data center's cost is construction, so the building jobs are few.
Noah Smith says that measures the wrong thing: look at employment, not spending. Since the AI boom began in late 2022, construction jobs have climbed along with wages, and the trades needed most for data centers gained the most.
Growth stalled a little in 2025 because Trump was deporting construction workers en masse. Even that did not stop it. Goldman Sachs estimates another 500,000 construction and trades jobs will be needed by 2030.
The tax bill is a benefit too
Data centers pay property, sales and corporate taxes plus fees. Loudoun County in Virginia used them to turn a quiet bedroom community into a place with trophy schools and new libraries.
Crucially, local governments can raise the price whenever they like. A data center cannot pick up and leave, so states can tax it after it is running, or negotiate a 'community benefit' agreement before construction, which is really just an extra tax.
The economy is standing because of it
After taking office, Trump raised tariffs, deported workers and created policy chaos that should have been a demand shock. It did not land, because the AI buildout pushed the other way.
Data center construction made up a large share of US growth through Trump's second term. By Okun's Law, shaving a percentage point off growth throws nearly a million people out of work. Nobody notices this benefit because the dog never barked.
There is also this: Americans already use AI heavily and find it useful. One study puts the annual US consumer surplus at $172 billion, more than the combined revenue of Anthropic and OpenAI.
AI has serious problems. But saying it does nothing for ordinary people is wrong.
Why it matters
Whether the benefits trickle down is the real argument, and it comes down to concrete line items: jobs, tax receipts and consumer surplus each add up in a different direction. Which numbers get cited, and by whom, tells you which side is doing the talking.
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