HARRISBURG, Pa. (AP) — After an election season filled with outrage against data centersThe midterm elections marked the start of a wave of Democrats pledging to crack down on energy-hungry giants.
A stricter regulatory environment for artificial intelligence giants and data center developers is likely to follow, although President Donald Trump – perhaps the the biggest champion in the industry – blocks any federal repression.
Data center regulation itself was not present in most of the midterms, and it was not among the top issues for most voters. But tough stances against server warehouses have been baked into the platforms of many candidates, including Democrats who have upended long-standing Republican control of governors in Texas, Ohio, Georgia, Nevada and Iowa, many of which are data center hot spots.
Skepticism towards data centers and their impact on electricity priceoften intertwined with the fight for affordability – a key talking point during the Democrats’ campaign.
In Texas, Clayton Tucker, the first Democrat elected agriculture commissioner since 1986, said his commitment to fighting data center development was key to his victory. Everywhere he went, he said, ranchers feared that data centers posed an existential threat to their dwindling water supplies.
“You know, there’s an old saying around here that ‘Whiskey is for drinking and water is for fighting,'” Tucker told the Associated Press. “And that’s exactly what happened.”
Data centers were a persistent bogey in attack ads
According to AdImpact data, campaigns large and small have spent more than $380 million on TV ads mentioning data centers. Democrats have spent more than three times as much as Republicans on the subject.
Massive Democratic victories could have far-reaching implications for data centers. In addition to taking control of Congress, Democrats toppled at least five governor’s offices and took full control of the governments of five other states: Wisconsin, Minnesota, Pennsylvania, Nevada and Michigan.
Data Center Watch, a project of AI security consultancy 10a Labs, said it tracked winning congressional and gubernatorial candidates and found that the vast majority expressed support for tougher regulations or even a moratorium.
Among governors, 32 of the 34 victorious candidates in races where AP has named a winner support tighter regulations or restrictions. Twelve of the 34 support bans or moratoriums, the statement said.
During the campaign, Wisconsin Governor-elect David Crowley, a Democrat, changed his position under pressure from his Republican opponent to take a tougher line on data centers. Initially opposed to any moratorium, Crowley later said he supported one as well as eliminating the state’s sales tax exemption for data center operators and developers.
In an interview with AP on Thursday, Crowley said he is currently discussing what he will propose once he takes office.
In the mix are things like requiring developers to disclose more about their water and energy use, ensuring a community supports a project before it can move forward and protecting ratepayers from projects’ energy costs, Crowley said.
Industry sees need to build trust
AI giant OpenAI released a framework on Thursday listing new commitments to communities where it develops data centers. The company said it is asking federal, state and local policymakers to write “clear rules for how the industry grows.”
“Lawmakers should establish rules to promote responsible investment, protect residents, and ensure that the benefits of AI infrastructure are widely shared,” the message said.
An industry association, the Data Center Coalition, echoed the sentiment that developers must continue to try to build trust with public officials and communities. A coalition official, Dan Diorio, said the industry was aware that many midterm winners had promised to impose a moratorium.
“We should expect that they want to keep their promises, but it will have real consequences,” Diorio said in an interview.
Those consequences, Diorio said, could include host communities that would not benefit from tax revenues or payments from tech companies. Data centers also spur broader economic expansion that encourages investment in the domestic manufacturing sector, he said.
Wall Street sees red lights after the election
The election of data center skeptics adds challenges to soaring stock markets. AI boom.
On Thursday, the Nasdaq, which is full of AI-related and other technology stocks, fell 11% below this is a record level amid fears that data center construction could slow down due to it’s getting more and more expensive to borrow money.
Building AI data centers is driving much of growth of the American economyand any slowdown could have a broader effect.
In an analyst report, Morgan Stanley said the decisive results for Democrats lead to “greater expectations for data center restrictions” that, under new state regulations, could “divide the country into areas open to new data centers and areas not open.”
He pointed to the election of Democrat Gina Hinojosa for the governor as “the most important election result” for the development of data centers. Hinojosa said she would block a permit for a data center if it wasn’t a good deal for Texans or if residents didn’t have a say in the matter. She defeated Republican Gov. Greg Abbott, who touted Texas as “the epicenter of AI development” before trying to crack down on it late in the campaign.
Morgan Stanley also said the election of Democrat Amy Acton as governor in Ohio “creates a significant risk of delays to data center projects in the state.” Acton has pledged to block any data center project unless it meets certain standards.
Local elections didn’t go well for data centers either
Voters in local referendums overwhelmingly voted in favor of restricting data centers, according to a report. analysis by survey and data science company Redbud Consulting.
Redbud tracked 47 referendums in 44 municipalities in 12 states, including 21 in Ohio alone, eight in Maine, seven in Illinois and four in Kansas. Restrictions were approved in 44 of the 45 elections where counting was completed, Redbud reported.
Most voters don’t want a data center built near them
About three-quarters of American voters oppose building a new data center in their community, according to The AP Voter Poll.
In both red and blue states, the majority of voters were opposed to adding a data center where they live.
Support was higher in some traditionally red states, including Wyoming, West Virginia, Louisiana and Mississippi. In Texas, voters in the Senate race were also likely to say they were opposed to building a new data center in their community.
Despite voters’ deep opposition to data centers close to home, the AP Voter Poll suggests it wasn’t a particularly motivating issue in this election.
About a quarter of U.S. voters said AI data centers were “crucial” to their vote in Congress, which is well below the percentages who said government corruption or the cost of living were very important to their vote.
The stakes were particularly high in Texas
Texas is poised to overtake Northern Virginia as the world’s largest data center market by 2030, according to a report from commercial real estate giant JLL.
During the campaign, Hinojosa aggressively attacked Abbott for rolling out the welcome mat for data centers.
Stephen Sanders, a Republican who co-founded an anti-data center protest group in Lubbock, said Texans were particularly sensitive to the issue because they said data centers posed a threat to their electricity and water in the drought-stricken state.
“I would say data centers were on the ballot,” Sanders said.
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Associated Press journalists Scott Bauer in Madison, Wisconsin, Kaitlyn Huamani in Los Angeles and Linley Sanders in Washington contributed to this report.
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Follow Marc Lévy on http://x.com/timelywriter
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