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On May 8, Joe Biden spoke at Gateway Technical College in Racine, Wisconsin. The president was bragging.
Six years after his predecessor, Donald Trump, visited the same city to boast of Taiwanese tech company Foxconn’s $10 billion plan to bring a LCD manufacturing plant to Racine — that never materialized — Biden chose the same site for a new high-tech manufacturing project of his own. Microsoft will invest $3.3 billion to build a new data center to support artificial intelligence, a project that the company says will bring 2,000 permanent jobs and 2,300 union construction jobs to Wisconsin.
It’s good business, and better politics. Wisconsin is an important swing state for Biden in his forthcoming election against Trump. This latest announcement seemed to mark a moment where Biden accepted that AI is going to be an important part of his presidential legacy — and that it’s a record he should run on.
Right place, right time
OpenAI ushered in the generative AI revolution with ChatGPT midway through Biden’s first term. Silicon Valley rushed to develop it, Wall Street rushed to fund it, and governments around the world rushed to regulate it. Biden was in just the right position to reap the political rewards.
The US hasn’t passed comprehensive regulation to rein in AI, lagging behind its European counterparts in that regard, because it would require Congressional action. Instead, Biden secured voluntary commitments from the top AI companies to reduce the risks of their technology and issued a sweeping executive order dictating that every federal agency and department needs to assess and mitigate the risks AI poses, and how they can safely use it.
Beyond that, AI has become a focus of Biden’s industrial policy and export control measures, both of which have major implications for foreign policy and national security. Microsoft's investment also comes mere weeks after the Biden administration helped orchestrate the PC giant’s $1.5 billion investment in the Emirati tech giant G42, which pledged to restrict ties with China in favor of working with US tech firms.
Federal dollars pour into AI
The Microsoft data center was one in a series of chest-pounding announcements from the Biden administration, which has used funds from the CHIPS and Science Act to incentivize tech infrastructure firms to build in the United States. Taiwan Semiconductor Manufacturing Company will get $6.6 billion to invest a total of $65 billion to expand its chip fabrication complex in Phoenix, Arizona. Samsung will get $6.4 billion to pour $45 billion into its Texas facilities, and Intel will be granted $8.5 billion to construct and expand facilities in Arizona, Ohio, New Mexico, and Oregon.
AI wasn’t necessarily top of mind when the CHIPS Act passed in 2022, said Scott Bade, a senior analyst in Eurasia Group’s geo-technology practice, but it’s become the focus of the government’s efforts to nationalize chips and data centers.
“If you look at the political motivations for the Chips Act, a big part of that was the auto industry not having access to chips during the pandemic,” Bade said. Most of those were so-called legacy chips, not the high-powered graphics processors needed for AI, but the investments and legislation was already in place by the time AI became the hot topic in consumer and military tech.
The US has an advantage over rival China when it comes to artificial intelligence technology, but also the chips and chip-making facilities necessary to train and run powerful AI applications. Not only are many of the most important AI chipmakers — such as Nvidia, AMD, and Intel — American firms, but important non-US infrastructure firms are subject to US export controls because they rely on small parts made in America. The Biden administration has ramped up export controls to give the US an economic and technological advantage over China. And don’t forget the military side — global powers are looking to AI to super-charge their weaponry.
The election looms
AI lets Biden make some important claims in his rematch against Trump, including:
- American companies are leading the world on AI
- Multinational firms are investing in US facilities
- They’re bringing high-tech manufacturing jobs to the US
- And the US is keeping China at bay in the AI space
Not all of those arguments will resonate in retail politics, but Arizona and Wisconsin, where new facilities are popping up, are key swing states looking for good union jobs. In Wisconsin especially, Biden will make the case that he’s delivering what Trump couldn’t.
“The fact that you have a fab in a major swing state that helped him win last time and also has an important Senate race — that's not a coincidence,” Bade noted.
Speaking in Wisconsin, Biden barely mentioned technology, let alone artificial intelligence. Instead, he focused on delivering where Trump could not.
“During the previous administration, my predecessor made promises, which he broke more than kept, left a lot of people behind in communities like Racine,” Biden said.
Artificial intelligence might not be the snazziest talking point for retail politics, but it’s bound to be a major undercurrent — even when it’s not mentioned explicitly.