The betrayal behind the data-center backlash: AI promised to break the rules of class but is just rewarding them so far

The allure of artificial intelligence as a tool to level the playing field between those with and without credentials has proven to be more of a mirage than a reality, according to recent findings. Two years and billions of dollars into the AI revolution, Wall Street economists have observed a different scenario unfolding. It appears that the households most vulnerable to AI's risks are also the ones best positioned to cope with them.

While the prospect of widespread job loss due to AI has not materialized, the technology seems to be compressing wage growth over the past half-decade of above-target inflation. This trend disproportionately affects the lowest-paid workers in the jobs most exposed to AI. Corporate profit margins have reached postwar highs not because AI-enhanced productivity has skyrocketed, but because companies have used AI as a justification for price hikes while keeping wages stagnant.

These developments have sparked a nationwide backlash against AI's data centers and the soaring electricity bills they generate. The narrative around AI's impact on the job market is far from the promise of upending the old order, as indicated by Wall Street research. Instead, the evidence suggests that AI is being absorbed by the existing order, with rewards accruing almost exclusively to those who were already on top.

The myth of the vulnerable elite was a common refrain in discussions about AI-anxiety. It was believed that white-collar professionals—those with credentials, salaried positions, and laptops—stood to lose the most. However, research from Brookings and Tufts University has revealed that urban, left-leaning counties, where these professionals often reside, are the primary hotspots for AI exposure.

Morgan Stanley's analysis of this trend has shown that while high-AI-exposure occupations are indeed dominated by college-educated, high-income individuals, their elevated equity wealth may provide a false sense of security.

American household wealth has surged by nearly $21 trillion between 2024 and 2026, with direct equity holdings driving half of that increase. AI-related stocks are projected to drive nearly 40% of S&P 500 earnings growth in the coming year. However, this equity wealth is heavily concentrated, with the top 20% of earners holding 87% of direct equity and mutual fund exposure. For the bottom 40% of earners, equity wealth roughly equals a year's wages, while for the top 20%, it runs six times their labor income.

The practical effect of this wealth disparity is evident in the wage growth slowdown experienced by those most exposed to AI. Separate research from Apollo Global Management indicates that real wage growth for workers in high-AI-exposure occupations has slowed by 6.7 percentage points compared to low-exposure work since 2023, with no significant change in employment.

The wage penalty is most pronounced in the lowest wage quartile, with a 10.7-point decline, and less severe but still significant declines in the second and third quartiles. Only the top quartile has seen no significant effect on wages.

The corporate sector appears to have recognized this trend in its earnings reports. Morgan Stanley's Michael Gapen noted a $400.9 billion increase in non-financial corporate profits in the second quarter of 2026, pushing margins to near post-World War II highs. The driver of this surge is not an AI productivity miracle but rather a strategy already in place: wage suppression.