Techin' Geek

When Flai was raising its seed round last year, it was just a team of three people pounding the pavement to get car dealerships to use the startup’s software to manage phone calls, emails, and texts. But CEO Ari Polakof was already looking to a more agentic future, where Flai’s AI would handle far more.

One year later, that future has arrived. The startup is working with more than 10 of the top 50 dealer groups in the country, and its AI is being used to answer and engage with customers, run outbound campaigns, and schedule appointments — 50,000 per month — across both sales and service. This has led to a 20x increase in revenue, Polakof told TechCrunch in an exclusive interview.

Flai says this deep integration is helping the startup set itself apart from others trying to get car dealers hooked on AI. The growth is attracting investors, too. On Tuesday, Flai said it had raised a $27 million Series A funding round led by automation-focused firm Base10 Partners. The round included funding from dealers (Friedkin Group and Findlay Automotive), Toyota’s venture arm, Y Combinator, and First Round Capital.

Polakof said Flai’s growth is coming from customers who see the bigger vision of what is essentially an AI-powered customer relationship management software built from the ground up and tailored to the specific need of each dealer.

“Sure, we do answer the phone calls, but we’re following up with customers, we’re alerting the leadership whenever they need to take a look at something, maybe because the customer’s mad, or because you forgot to respond, or promised them something next week,” Polakof said. “We’ve grown quite a bit from just a phone solution to more of a platform. There are plenty of AI companies coming in, but I think that really speaks about the opportunity.”

Flai claims its software is also flexible. Earlier this year it launched with a luxury dealer in Puerto Rico where customers “switch between Spanish and English mid-conversation,” Flai co-founder Juan Alzugaray wrote in a LinkedIn post. “We started where we always do: inbound service calls. It went well enough that they added sales. And now the group is rolling Flai out across all 8 of their stores,” he wrote.

The result of all this is that dealerships are selling more cars, making more money, and “customers are getting answers faster,” according to one of the groups Flai works with.

Perhaps unsurprisingly, Polakof said much of Flai’s customer growth has come from the dealers talking up the product to their peers.

“If you really do great by them, they also do great by you, and they recommend you, and talk about you,” he said. This has led to Flai generating half of its revenue from new customers, according to Polakof.

Customers are making these referrals because they like Flai’s software, Polakof said, but also because they get up and running quickly. Flai’s software can be live in a dealership 10 days after a contract is signed, and he tells his team — which is now up to around 40 people — that they need to respond to customers within 20 minutes “at most.”

“The common experience, especially around automotive [software] vendors, is — and many are almost traumatized by this — is that they sign the contract and then the company disappears,” he said “I’m fully focused on making sure that we treat every customer as if they’re our only customer, especially because I know how hard it was to get the first one.”

That speed and customer experience, combined with the knowledge Flai has developed on how dealerships work and what they need, is what Polakof said protects the startup from products like Muse, which Meta has pitched as a one-shot solution for small businesses.

“You get a group of really smart people, and you spend all your days, all your time thinking very deeply about this one space — it’s just so hard to envision that any other platform outside of the space can come in and start going after your customers,” he said.

For all this momentum, there is still one customer Polakof hasn’t been able to land: his own local dealership.

“I’m actually trying much harder than I should to make them a customer,” he laughed. “I’m sure we will get them by next year.”

Lucid Motors built 2,954 electric vehicles (EVs) in the third quarter of this year, a 54% drop from a year ago, as the company purposely limits production to better meet demand for its EVs.

This was the third straight quarter in which the number of EVs Lucid built has declined. It’s also the lowest quarterly output since the first quarter of 2025, which was just after Lucid Motors started production of its second EV, the Gravity SUV.

Lucid delivered 3,806 EVs in the third quarter, roughly flat with the second quarter and down about 200 vehicles from the third quarter of 2025. The company has struggled to find buyers for either of its first two luxury EVs. In five of the last six quarters, it built more vehicles than it delivered.

Lucid’s new CEO, Silvio Napoli, has spent the last few months leading an effort to “simplify the company.” That effort has included laying off around 1,500 employees, streamlining the company’s leadership, and eliminating a second shift at its factory in Arizona in a bid to reach cost savings of $1.4 billion. Lucid also delayed the release of its third EV, the Cosmos. That model is supposed to be much cheaper, starting at under $50,000.

The third quarter figures, released Monday afternoon, come just a few days after rival EV upstart Rivian posted its best quarter in history on the back of the R2, its new, more affordable SUV. Although Rivian didn’t break out specific delivery figures for the R2, the company shipped nearly 20,000 vehicles in the third quarter, the first full quarter with the R2 in production, up from 12,194 in the second quarter.

Lucid’s failure to find a large market of buyers for its EVs is even more stark when compared with the promises the company made when it went public in 2021. That year, Lucid Motors merged with a special purpose acquisition company and estimated it would ship as many as 90,000 EVs in 2024 alone. The company raised $4 billion in the transaction.

On Lucid’s second-quarter earnings call in August, Napoli spoke about why he thinks the company has failed to make a dent in the EV market.

“While there is no question that Lucid brought leading innovations and outstanding products to the market, we have disappointed on several fronts, and for far too long,” he said. “We have not executed consistently. We missed commitments, launched products before they were ready, underinvested in service, responded too slowly to quality issues, and allowed complexity to slow decisions down.”

The Cosmos’ lower price could, in theory, let Lucid access a wider market, but Napoli cautioned shareholders that rushing the new EV out could create more trouble.

“We will not repeat the mistakes of the past by bringing a product to market before it is ready,” Napoli said on the call.

OpenAI will start adding an invisible watermark to text generated by ChatGPT and Codex in the European Union to comply with the EU AI Act, the company said Monday in a blog post.

The EU AI Act’s transparency rules, which took effect on August 2, require AI companies to mark AI-generated content in a way other systems can identify.

OpenAI said the watermark will roll out over the coming weeks to eligible ChatGPT and Codex users on all plans, but only in the EU. Developers using OpenAI’s API anywhere in the world can turn it on for select models starting today; it’s off by default. OpenAI said it is not making text watermarking a global default at launch.

The watermark is not an actual symbol, but works by subtly shaping the model’s word choices, leaving a pattern readers can’t see, but a detector can pick up. Because it lives in the words themselves, it travels with the text when it’s copied and pasted. OpenAI said the watermark doesn’t identify the user, and that it saw no meaningful change in its models’ performance with it switched on.

OpenAI also published a technical report for its method, called textGrain, alongside the announcement. Co-written with researchers from the University of Pennsylvania and Yale, it walks through an example of using a secret key to sort next-word predictions to finish the sentence. Add hundreds of these nudges together, and the detector can spot AI-generated content using only the text and the key.

Can the watermark be removed by editing? OpenAI’s tests suggest yes. In one test, replacing 10% of words with synonyms dropped detection from about 92% to 66%. The company also said short passages, math answers, and translated text are harder to detect.

“These limitations contribute to our decision to provide initial detector access only to approved researchers and expert organizations, who can help us evaluate reliability and responsible uses,” said the company.

OpenAI also cautioned that a missing watermark “does not prove human authorship.” The text could be too short or too heavily edited, or it could come from another company’s AI.

“[Watermarks] can indicate that an OpenAI system generated or processed part of a passage, but not how much human judgment, editing, or creativity went into it,” the company said.

The announcement comes two months after Anthropic said it would watermark text generated by Claude, a move it’s applying worldwide. That decision drew backlash from some Claude users, who argued they had supplied “the instructions, context, decisions” while Claude was just “the tool.”

OpenAI had built a text watermark before but held off on releasing it, partly over concerns that users would switch to rivals that didn’t watermark, The Wall Street Journal reported in 2024.

Anthropic, Google, Meta, Microsoft, and OpenAI are among the companies that have committed to following the EU’s code of practice on AI-generated content.

Although it’s only been a couple of months since Etched raised $700 million at a $21 billion valuation, the AI chip startup is already being plied with investment offers at double or more its value, according to people familiar with the company.

Etched is reviewing incoming bids that range from $40 billion from top-tier investors to $50 billion from lesser-known backers, one person said. These fundraising talks are early, so terms of any deal, should one happen, may change. Etched declined to comment.

While this may seem like a fast timetable to raise another mega round, Etched is pursuing a particularly expensive segment of the AI industry: building full AI hardware systems powered by its own proprietary chips. The person familiar with these offers said that if it raises as much as its last round, this could give Etched a cushion of as much as 3.5 years of runway.

There are reasons why VCs are hot to own a piece of Etched. The four-year-old startup shows promise of challenging Nvidia. Not only did quant trading firm Jane Street lead the last $700 million round, it is also a customer that took delivery of an early system. Etched said in July that it had already secured $1 billion in customer orders, including the one from Jane Street, after manufacturing its test chip at a TSMC factory this summer.

Co-founder and COO Robert Wachen previously told TechCrunch that investors are so enthusiastic because Etched has designed two new components from scratch to speed up inference — the computing process that happens after a user submits a prompt.  

The company claims its chips can process more tokens faster and at a lower cost than Nvidia’s. That’s the reason its processors have been so attractive to Jane Street, for whom a microscopic advantage in speed can yield massive profits.

The startup has also impressed investors with its ability to attract engineers from Nvidia, with roughly 15% of Etched’s 400-person workforce having previously worked at the chip giant, according to The Wall Street Journal.

Etched also operates a new 10-megawatt data center in Silicon Valley and established a facility in Taiwan to coordinate production near TSMC.

Co-founders Gavin Uberti and Chris Zhu famously met in an advanced math course at Harvard, while Wachen was Uberti’s roommate and they dropped out to pursue the company.

In terms of fast rounds at big leaps in valuations, Etched already has a history of them. The startup announced a $300 million round at a $10.3 billion valuation led by Sequoia in July. It announced the $700 million round at a $21 billion valuation in September. Back-to-back funding rounds, which essentially act as a single financing split into two tranches with separate valuations, are increasingly common among the buzziest startups.

Menlo Ventures partner Matt Murphy and his team announced Monday in a blog post that the firm has invested in AI coding startup Factory.

Menlo declined to comment on how much it invested but said the deal was part of Factory’s latest funding round announced last month at a $5 billion valuation. A source familiar with the deal told us the investment was significant to Menlo — not a token gesture — and that Menlo would have invested more had there been room on the cap table.

Ordinarily, something like this wouldn’t necessarily be news; startups often extend previous rounds to add new investors. But last week, Factory co-founder and CEO Matan Grinberg was embroiled in a very public airing of dirty laundry when he alleged that he had fired investor Chris Degnan of firm RPT Partners from his role as board advisor. Grinberg said he feared Degnan may have shared confidential information with Factory’s biggest competitor, Cognition. The accusation followed Degnan’s move to Cognition as its chief revenue officer.

A who’s who of the tech industry came out of the woodwork either to support Degnan and condemn Factory, or vice versa, but none was more surprising than Vinod Khosla. Khosla’s firm is an investor in both Factory and Cognition. But that didn’t stop the venerable VC from calling Factory a desperate “struggling second tier competitor,” and accusing Grinberg of lying about firing Degnan and impugning his character. Degnan disputed Grinberg’s story, saying he resigned and that he’d rebuffed a competing job offer from Grinberg.

So Menlo’s full-throated endorsement of Factory, which praised its founders, its tech, and its relationship with its customers, is more than a feather in Factory’s cap. It’s a statement that Factory is not in the state that Khosla implied it was.

Murphy famously bet his firm on Anthropic back when it appeared to be an also-ran to OpenAI and has been on a hot streak ever since, landing deals with Lovable and Legora, for instance. So now some VCs are calling Factory “the next Anthropic.“

Sequoia’s Shaun Maguire, also a Factory backer who came out on X in support of Grinberg last week, appears thrilled with Menlo’s endorsement, saying the firm is “on a tear.” Notably, Menlo is not an investor in competitor Cognition.

President Donald Trump hosted many of the biggest names in artificial intelligence this week — in part to announce that the U.S. government isn’t calling it artificial intelligence anymore. Now it’s super intelligence.

On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I discussed the motivation behind the meeting and what effect it might have on the AI industry. We were all pretty skeptical that the “Joint Commitment on Frontier Responsibilities” that the executives signed will amount to much, especially since — as Sean noted — it’s “deeply non-binding,” at least from a legal prospective. (Instead, Trump said he considers it “morally binding.”)

Kirsten suggested that the meeting’s real significance may have been as “a rebranding effort around AI.” (An effort that continued this weekend with Trump’s announcement of a new Super Intelligence Force.) For her, the big message was, “AI is going to kill us, it’s scary, it is going to take jobs — but super intelligence is not.”

Keep reading for a preview of our conversation, edited for length and clarity.

Anthony Ha: Officially, by order of the president of the United States, it’s not artificial intelligence anymore, it’s super intelligence. We were talking about this last week, because this is something [Trump has] been hinting at — he doesn’t do hints, he’s been saying [it] for a while. But now it’s signed into executive order. If you’re an official U.S. representative, you are supposed to say super intelligence, not artificial intelligence.

And this was also part of this broader announcement around AI safety, which I think is both interesting for this pact that was announced, but also the fact that it happened at all. It seemed to have come together fairly quickly, because just two weeks ago, a week ago, President Trump was saying, “We don’t need any of this, we need to lead in AI, we can’t constrain it in any way, we don’t need any regulation, anyone who’s saying that there’s any danger from AI is essentially a Chinese or Democratic plant.” And yet all these AI CEOs got together with him earlier this week and signed this pact.

Kirsten Korosec: Leading up to that, we should say, not only was there pushback on regulation, and we can talk about whether this executive order even does any of that — I would say no, there’s a little bit of theater there — but the important and interesting thing is that just days ago, Anthropic was really in the doghouse, if you will, in terms of what was happening behind the scenes with President Trump. 

That all changed when [Anthropic CEO] Dario Amodei was invited to a 10 p.m. dinner. He had this sit-down, and then just days later, we had this luncheon, and at this luncheon, we have pretty much every tech power broker from every major tech company that exists. So Mark Zuckerberg was there, Jeff Bezos was there, Elon Musk was there, Dario of course was there, they were all there. 

I’m wondering if any of you watched the press conference that happened afterwards, which there’s been many, many memes about, because of the interesting, funny behavior when you bring a bunch of tech CEOs together.

But I guess my bigger question for both of you is: What does this all mean? And does it mean anything?

Sean O’Kane: How much time do you have? First off, sure, they had dinner, Trump and Dario. If you read the Time magazine interview that Trump just did, your guess is as good as mine as to how informed he was that that dinner was even going to be happening, which is a strange reality to live in, but it’s just the one we inhabit.

I will also say one other thing that makes me skeptical — surprise, surprise — of how repaired the relationship is between the administration and Anthropic, is that for as much as there are clearly people trying to put those two groups together, the Defense Department is still very adamant that Anthropic is terrible and woke and and a national security risk. Emil Michael goes off on Anthropic every other day on X, it seems. I think there’s still some distance there despite Dario showing up to this thing. 

As far as the agreement and all of that, let’s be real, they misspelled the United States on the agreement that they all signed. It is also just deeply non-binding. I mean, it is completely voluntary. I think my favorite aspect about it was that Trump described it as quote “morally binding,” which is just a level of abstraction and terminology that I’ve never heard of before.

Anthony: In terms of Anthropic and their relationship with the Trump administration, there’s been a sort of a lot of reporting, especially during that big blow up with the Defense Department, that different parts of the White House had different relationships with Anthropic. The Treasury Secretary seemed to be a big fan, whereas the Defense Department — definitely not big fans, or at least unhappy with some of the conditions that Anthropic were trying to put on the use of their technology. 

In  that sense, it feels like nothing has necessarily changed. There are people in the White House who want to use Anthropic’s technology, want them involved in these decisions, and others who really, really, really, really don’t.

In terms of the agreement, it seems not super meaningful. What is meaningful is just the fact that they felt that this was something worth doing. As indicated by the fact that they misspelled United States, it seemed like they rushed to put all of this together. [But] the fact that this kind of gesture was needed seems significant, even if I don’t think the agreement itself is going to lead to any major changes.

Kirsten: I do think that there was one important thing that happened. And to me, this is the point of it, which was a rebranding exercise around AI. “AI is going to kill us, it’s scary, it is going to take jobs, but super intelligence is not.” This isn’t my personal belief. To me, that was the message.

Welcome back to TechCrunch Mobility, your hub for the future of transportation and now, more than ever, the role AI is playing in it. To get this in your inbox, sign up here for free — just click TechCrunch Mobility!

On an average day in San Francisco, you might see dozens (hundreds?) of Waymo robotaxis zipping around the city — and with little disruption. But, as TechCrunch has reported, there have been numerous incidents of robotaxis impeding traffic, driving into crime scenes, and interfering with first responders. And not just in the Bay Area. In some cases, companies have relied on first responders to move their robotaxis.

These disruptions are occurring in the early stages of the robotaxi era. California has a new law hoping to get ahead of the problem before the next impending wave of robotaxis land. 

Senate Bill 1246, which was signed into law by Governor Gavin Newsom this week, sets a series of new rules for AVs designed to improve safety and response times when they become disabled or interfere with emergency responders. The law also creates ways to hold these companies accountable if they don’t.

Autonomous vehicle technology companies like Tesla, Waymo, and Zoox will have to provide first responders with local, on-the-ground support when their robotaxis cause problems and could also face penalties if a robotaxi blocks police or firefighters for more than 30 minutes.

The law also says AV developers can only employ remote drivers who are based in the United States and those drivers must hold a U.S. driver’s license. They must also notify cities, towns, and other local jurisdictions about the location and status of vehicles during system-wide failures and must provide “local incident technicians” who can assist with AV accidents and obstructions.

There are still some details to hammer out, which the Department of Motor Vehicles will handle since it’s the main regulator of autonomous vehicles in the state. But when this law goes into effect in July 2028, will it actually keep robotaxis out of the way of emergency responders? 

It likely won’t, but hopefully this law reduces the chaos and raises the accountability when something does happen.

Perhaps the better question is will other states follow California’s lead or wait for the federal government to weigh in?

Deals!

Harbinger, the EV startup, landed a $300 million deal to supply FedEx with 2,000 of its electric trucks. 

HyperGuest, an Israeli travel tech startup, raised $25 million from AMI, the investment arm of Apax Partners.

REGENT Craft, the developer and manufacturer of the all-electric Seaglider, extended its collaboration with the U.S. Marine Corps Warfighting Lab, pushing the total value of the contract to $19.25 million.

Quartermaster, an Arlington, Virginia-based maritime intelligence startup, raised $140 million in a Series B round. About $100 million came from Insight Partners, defense-focused firm Overmatch Ventures, and First Round Capital. The remaining $40 million came in the form of a debt facility from investment bank Stifel.

Voltaback, a French fleet management software startup, raised €2.8 million from European investment fund Serena.

Notable reads and other tidbits

When Aurora announced it would have 30,000 autonomous trucks on the road by the end of 2030, I admit that I raised at least one of my eyebrows. I interviewed CFO David Maday to find out exactly how the company plans to accomplish this and why he’s confident it will succeed.

BMW unveiled its new 2027 3 Series and it’s offering essentially the same car for gas and electric. Guess which one is cheaper?

DoorDash shared more about its new drone delivery business DoorDash Air, including the autonomous aircraft and its ground-based systems approach.

Kodiak has landed Ikea as a customer and will begin driverless deliveries on public highways later this year. The trucks will haul Ikea products without anyone in the cab on a 219-mile stretch of Interstate 45 between Houston and Dallas, according to the company.

Lyft agreed to pay $272.5 million to settle a lawsuit accusing the ride-hailing company of violating California law by misclassifying drivers as independent contractors, instead of employees. The settlement wraps up violations that occurred before Prop 22 was approved by voters, which allows companies like Uber and Lyft to classify drivers as contractors.

Northeastern University tested 21 late-model vehicles from 17 automakers and 30 companion mobile apps. The upshot: cars are collecting a trove of personal data and sharing it with a lot of tech companies, including Adobe, Contentsquare, Google, Microsoft, Meta, Snap, and Yahoo.

SpaceX’s Starship rocket reached Earth orbit for the first time, though not without some drama along the way.

Rivian reported a record-setting quarter of sales thanks to the new R2 SUV. And it’s still forecasting between 65,000 and 70,000 vehicles this year. But it is experiencing a few hiccups with its newest EV. The company issued a recall for its R2 SUV over fasteners on its high-voltage battery pack that might not be properly tightened, which can cause a loss of power while driving.

We’ll finish this roundup with a few notable Tesla news item. The company sold more than 480,000 EVs in the third quarter, the second strong quarter in a row for the company after a softer start to the year. The company has delayed its Roadster 2 event again due to bad weather. 

And while Tesla’s traditional automotive business may be clicking along, it really wants to be considered an AI and robotics company. One year ago, Elon Musk laid out his fourth Master Plan, which he claims will deliver “amazing abundance” through robotaxis, robots, and AI. As Sean O’Kane noted in his recent piece, “What that means, more than a year later, is still tricky to pin down.” 

It did just pin down more money to try. The company secured $30 billion in fresh credit lines that could be used to scale its future products, including the Optimus robot and the Cybercab robotaxi.

One more thing …

The countdown begins! Disrupt 2026, TechCrunch’s annual tech conference in San Francisco, is just days away. I mentioned this last week and I am here to share this again. I’m offering you a 30% discount on tickets to Disrupt with code mobility30. 

Why go? Well, I am interviewing Rivian CEO RJ Scaringe onstage October 13. I will also interview Mikell Taylor, director of robotics strategy at GM; Shield AI CTO Nathan Michael; and Waabi founder and CEO Raquel Urtasun on a panel entitled “Building AI Systems When Failure Is Not an Option.” Sean O’Kane will interview Also CEO Chris Yu; Yuri Sagalov, managing director at General Catalyst; and Shan Shan, investment manager at Baillie Gifford in “How to Win When You’re Not Building AI.” Plus, hear from execs and engineers from Cerebras, Nvidia, OpenAI, and Replit to name a few. Check out the full agenda here.

Speaking of Disrupt, here is a profile of MyMonthly Car, one of the Startup Battlefield 200 participants that earned a spot to exhibit at the event.

A federal judge ruled this week that a Tulsa, Oklahoma sheriff’s deputy violated a woman’s Fourth Amendment rights when using Flock Safety to search for her license plate without a warrant. 

As reported by 404 Media, this ruling does not create a binding precedent, but it is one of the first times that a federal judge has ruled that a Flock search is unconstitutional.

In this case, Judge Sara Hill said the deputy should have obtained a warrant before searching the Flock database for the woman’s license plate, as he had “no apparent reason” for the search “other than the fact that [the woman’s vehicle] had a California license plate.”

The deputy then used the woman’s travel history in Flock as part of the justification for searching her car, where he allegedly discovered 91 pounds of meth. But Judge Hill wrote that all evidence obtained after the Flock search “must be suppressed as the fruit of a poisonous tree.”

Judge Hill also took broader aim at warrantless searches of the Flock database, writing that tracking people’s location — even when they’re in public places — becomes “constitutionally problematic when law enforcement can indiscriminately and passively catalog your whereabouts over an extended period of time and then use that information for any purpose whenever convenient.”

“This is a type of indiscriminate mass surveillance,” Hill wrote. “It is not targeted on a single individual, as in [Carpenter v. United States, a Supreme Court case focused on how government agencies access location data from cell phones]. It is a tool that collects information about all vehicles that pass by any network-connected camera at all times, and it serves up the information to law enforcement on demand.”

Hill joins a growing chorus of Flock critics from across the political spectrum. Numerous local and state governments, including Florida and Texas, have said they will stop using the technology. And on Friday, Senator Bernie Sanders — a Democrat from Vermont — introduced the Block Flock Act, which would bar federal agencies from using automated license plate readers such as Flock.

Flock CEO Garretty Langley — who we’ll be interviewing on-stage at TechCrunch Disrupt — has called for a “compromise” between privacy and safety and offered an apology to women who have been stalked by law enforcement officers using the Flock system. And with all those cancellations, Flock has also reportedly offered voluntary employee buyouts as a way to shrink its workforce.

Amazon Web Services CEO Matt Garman said the company has stopped using nondisclosure agreements (NDAs) in its dealings with government agencies as it seeks approval to build new data centers.

Garman’s statement is just one sentence in a longer blog post in which he tried to push back against widespread suspicion of data centers, and to make the case that they’re actually good for communities.

NDAs are a significant piece of the broader data center backlash. For example, environmental activist Erin Brockovich recently said that the number one complaint she’s heard about data centers is transparency, with these projects following a common pattern: “projects announced after permits are already secured, developers who don’t return calls, local officials who signed NDAs before their neighbors knew a project was being considered.”

As a result of that backlash, New York announced a one-year moratorium on permits for large data centers, and according to Garman, there are more than 100 data center moratoriums currently being considered across the United States.

“If these measures are enacted, the U.S. could be writing its own losing ticket to this race, and the consequences would last generations,” Garman claimed. “As a country, we can’t afford to find ourselves in that position.”

Garman also attempted to puncture what he said are four big myths around data centers: that they consume too much water, that they increase electricity costs, that they emit an enormous amount of pollution, and that they don’t provide any benefits to their communities.

Pointing to an Amazon report about its own water usage, Garman said that “direct data center water consumption” only accounts for 0.5% of all industrial water usage in the United States, “orders of magnitude less than golf courses, almond farming, and many other industries.”

Nvidia recently said its new cooling system eliminates “pretty much all water usage” inside the data center, but those claims — like Amazon’s — seem to ignore the broader water usage involved in electricity generation and chip manufacturing. Scientists have also said they need to study data centers’ water and energy usage independently, since there are no federal or state requirements around how tech companies report this data. 

As for electricity rates, Garman said they’ve only gone up in some states with large numbers of data centers, while they’ve gone down or at least grown more slowly in others. And he argued, “In instances where energy rates are going up, it’s primarily because the grid is old and hasn’t been invested in and expanded before the demand arrived.”

On the other hand, an independent watchdog said recently data centers were the main culprit behind a 76% year-over-year price increase on America’s largest electrical grid.

When it comes to pollution — an issue that the NAACP is currently suing Elon Musk’s SpaceX/xAI over — Garman complained that critics focus on the maximum amount of pollution allowed under data center permits. For example, a planned Amazon data center in Texas is permitted to release 33 million tons of carbon dioxide per year, which is more than any other power plant in the United States.

“The truth is data center generators almost never run,” Garman said. “They’re idle 99.9% of the time (they run roughly 10 hours per year, mostly for required maintenance testing).”

As for the community benefits, this is where Garman wrote, “We no longer use nondisclosure agreements with the government agencies we work with on our projects.” Plus, he said, “Over the past three years, Amazon has contributed more than $1 billion to communities across the U.S. in which we have a meaningful data center presence.”

Will this be enough to quell community suspicion? Perhaps not — Anthropic CEO Dario Amodei recently argued that the AI backlash is “fundamentally a crisis of trust,” where people assume governments and tech companies are always “cooking up some new way to screw them over.” Similarly, writer Jasmine Sun noted that when data center opponents are presented with the tech companies’ arguments, their response is usually, “I don’t believe them.”