On Tuesday, Treasury Secretary Scott Bessent warned that the U.S. cannot afford to slow its artificial intelligence race with China, while criticizing AI companies and data-center operators for failing to win over the communities where they build infrastructure.
Bessent Warns China Could Threaten US AI Lead
Speaking during a Breitbart News “State of the Economy” policy discussion, Bessent said maintaining America’s AI advantage is critical to national security and the economy.
“Beating China — there is no day after tomorrow if China wins at this,” Bessent said, adding, “If they were to pull ahead of us on AI, then nothing else matters.”
Bessent credited America’s technology ecosystem, including its chip industry and access to capital, for helping the U.S. establish its current lead.
He also rejected calls for a temporary AI pause, arguing China would continue advancing regardless.
“We can’t pause,” Bessent said. “You can’t, because the Chinese won’t pause. Even the North Koreans, they won’t pause.”
AI Data Centers Face Growing Community Backlash
While defending continued AI infrastructure expansion, Bessent criticized data-center companies, hyperscalers and AI labs for how they have handled local opposition.
“They have done a horrendous job reaching out to communities,” he said, acknowledging that the approach had fueled a backlash.
Bessent gave the industry a “D-minus” for its community outreach, saying companies have “taken their credibility to the edge” and need to rebuild trust by explaining the economic benefits of data centers.
He also alleged that some opposition is influenced by Chinese propaganda, while saying companies still need to take responsibility for communicating with residents.
AI Data Center Boom Faces Growing Community Backlash
U.S. tech companies committed to more than $850 billion in data-center leases in the first quarter of 2026, marking a record as the AI infrastructure buildout accelerates.
A Gallup survey in May found that 71% of Americans oppose building data centers near their communities, compared with 53% who oppose nearby nuclear power plants.
President Donald Trump has stepped up his defense of data centers, urging communities to “let Data Reign.” His comments have faced criticism from Alexandria Ocasio-Cortez (D-N.Y.) and fellow Republican Marjorie Taylor Greene.
Last week, Nvidia Corp (NASDAQ:NVDA) CEO Jensen Huang called on G20 leaders to accelerate AI infrastructure and adoption, warning that excessive regulation and fear could cause countries to miss out on the next major technological revolution.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock/ Maxim Elramsisy
