The states fighting data centers own the stocks behind them

Finance reporter Joe Wallace examined the stock holdings of 13 of the largest U.S. public pension funds. By his count, AI related shares, meaning chipmakers and cloud and software firms tied to artificial intelligence, earned roughly $138 billion on those holdings between late 2022 and June.

Meanwhile, elected officials in places such as New York and Pennsylvania have resisted AI developments such as data centers. That political tension pulls against the retirement savings. Wallace put it this way: "The financial stakes are somewhat higher here."

The share of pension stock holdings in AI related companies is more than twice as large as it was less than four years ago. AI-related companies drove 57 percent of the funds' stock gains over four years and now make up almost a third of the U.S. stocks they hold. The gains have helped lift how fully funded the pensions are, to levels not enjoyed in years.

There are precedents for politics reshaping pension holdings. Managers backed away from investments tied to South Africa during apartheid and later trimmed holdings tied to firearms. According to Wallace, backing away from AI now "would potentially leave quite a lot of money on the table for pensioners, assuming that the boom continues."

That assumption is uncertain after recent jitters in AI stocks. For now, opposition to data centers creates a political wedge, with the same states questioning the projects while their pension funds hold shares in the companies.