Nevada's AI Paradox: Data Center Boom Creates Political Rift for Unions

A massive data center construction boom in the Nevada desert is creating thousands of high-paying union jobs, even as the artificial intelligence these centers power threatens to eliminate thousands of other union positions in Las Vegas. This paradox has created a deep rift within the state's politically influential labor movement ahead of the November elections.

A State Divided by AI

Northern Nevada is experiencing a modern-day gold rush, with thousands of unionized electricians and pipefitters building one of the world's largest concentrations of data centers on over 100,000 acres of desert east of Reno. This construction boom provides years of steady, well-paid work for the building trades.

Meanwhile, some 400 miles south on the Las Vegas Strip, the impact of AI is starkly different. Autonomous vehicles from Waymo and Zoox are reducing demand for human-driven taxis, robotic bartenders are replacing service staff, and major employers like MGM Resorts are cutting call center jobs. This has left the Nevada Teamsters, representing 30,000 workers across multiple industries, caught between supporting job creation and protecting members from displacement.

"My job is to represent all of our unions," Ross Kinson, the Nevada Teamsters’ political director, told Reuters. "This is a very, very important issue to the building trades... But what is it doing to our jobs?"

The Economic and Human Impact

The economic forecasts highlight the growing divide. While the construction sector booms, a report from RCG Economics estimates that AI and automation could put up to 92,000 hospitality jobs in Southern Nevada at risk by 2035, representing roughly one-third of that workforce.

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Key developments illustrating this trend include:

• MGM Resorts laid off approximately 200 call-center workers last year, with its CFO, Jonathan Halkyard, stating on an investor call that about 80% of guest interactions "now take place via AI/digital platforms."
• In contrast, the Tahoe Reno Industrial Center generated 850,000 work hours per month for electrical workers in 2026, a dramatic increase from roughly the same number for the entire year of 2022, according to the International Brotherhood of Electrical Workers.

Political Fallout and Union Strategy

This economic tension has become a "political minefield for politicians," Kinson said. The Nevada Teamsters have leveraged their significant influence—union members account for 13% of Nevada's workforce compared to 10% nationwide, per the Bureau of Labor Statistics—to shape the political debate.

The union interviewed over 180 candidates, ultimately endorsing Democratic Attorney General Aaron Ford for governor over the Republican incumbent, Joe Lombardo. Kinson noted that Ford's platform, which includes pausing new data-center tax abatements and mandating strong AI-related worker protections, struck a balance that appealed to the union's divided membership. Lombardo has championed the data center industry as an economic driver but was slower to embrace regulations, according to the union.