Treasury Secretary Scott Bessent blasted the US companies ramping up investment in artificial intelligence, faulting them for failing to build ties with communities amid a wave of popular concern over data centers boosting the cost of living.

“The industry has done a terrible job, terrible job of explaining themselves,” Bessent said Wednesday. The AI industry, along with government, has responsibility “to explain to the American public how this benefits them both from a use case, from a national security case, from a quality of life case,” he said.

Bessent highlighted that some “outside voices” in favor of data centers are now pushing back against efforts to limit their construction. “This is innovative construction, and this could be a long, long cycle here for people working in the trades,” he said at a Charlotte Economics Club event in North Carolina.

“They’ve been tone deaf to the communities” and stakeholders, Bessent said of the companies, without specifying them by name. “I was known for being a tough grader, but I would give them, on a curve, a D-minus.”

AI spending, and data center construction in particular, has added to price pressures ranging from utilities costs to high-bandwidth memory that goes into many consumer electronics products.

China Competition

The Treasury chief reiterated his view that, thanks to AI investments, the US is “on the cusp” of a big productivity boom. On Tuesday, he predicted that the capital-spending surge on AI will prove “extremely disinflationary.” He also said “I would guess that in the next six months we will start seeing the benefits of that.”

Bessent also flagged that “the Chinese are right behind us” on AI. “If they get ahead, everything else we do won’t matter,” he said, as they “will be able to hack into everything.” Nevertheless, he was optimistic about the competitive position of the US. Last year, the country had 55% to 60% of global computing power, he said, predicting that “by 2028, we’re going to have 80%.”

Wednesday’s remarks on communication strategies marked Bessent’s latest chiding of the industry, after he last month suggested that hyperscalers were selling bonds at the wrong part of the so-called yield curve. Market participants have said corporate debt issuance has been one factor propelling US Treasury yields higher — in turn keeping things like mortgage rates elevated.

“If I were sitting in the chief financial officer’s seat, I would think about issuing more what’s called the belly debt,” or five-year securities, he said last month. Earlier in August, Google parent Alphabet Inc. sold $25 billion of securities with maturities ranging from 2 to 40 years.