Democratic gains shift U.S. technology policy outlook

State winners seek pauses on data-center construction

The ascendance of Democratic leadership in the House and Senate challenges a central assumption in technology policy: that Congress would produce little or nothing. The Wall Street Journal said it remains too early to know whether the midterm results will yield specific laws governing data-center construction and AI safety, two areas of rising public concern. The assumption that Congress would remain inactive now appears less certain.

For technology markets already sensitive to the pace of innovation and returns on capital, the shift may add a higher degree of political uncertainty. Federal legislation could still encounter a veto from President Trump during the remainder of his term, but his successor in 2028 might not. Until then, Democrats may have a clearer opportunity to pass technology regulation at the state and local levels. Technology leaders who worked closely with the Trump administration will also have to reach across the aisle as political power changes hands.

Tech analyst Dan Ives of Yorkville Ives wrote that the midterm election “was a seismic shift that will have a negative impact on the pace of the AI Revolution build-out in the U.S. over the next few years.” He predicts that the pace of the planned 800 to 1,000 data centers across the U.S. will slow.

Ives expects the largest effect in Texas, where Democrat Gina Hinojosa defeated incumbent Greg Abbott. He estimates that 25% to 30% of data-center gigawatts and capacity will come from Texas.

If the expansion of AI infrastructure supply slows, enterprises and other technology consumers could face relatively higher prices for longer, the Wall Street Journal said. The outlet said that could impede the diffusion of AI across the economy and give the rest of the world, including China, an advantage in a global technology race.

One likely Democratic focus on AI is bringing top executives before Congress to testify about their close relationships with the White House, the Wall Street Journal said. The outlet said AI regulation will have a higher priority after a wave of hacks by recent AI models and warnings from industry researchers that the technology could be capable of destroying humanity within the next decade. Progressives have also proposed bills targeting the data centers underpinning the AI boom, with goals of curbing power use and addressing a recent backlash across the country.

Bloomberg reported that the latest election wins could put half of the nation’s proposed data centers under stricter oversight because candidates supporting a slowdown won at the state and local levels.

Hinojosa has called for an immediate moratorium on data-center construction until lawmakers pass protections for communities. Bloomberg reported that about 13 GW of capacity is immediately exposed.

Democrat Amy Acton flipped Ohio’s governor’s seat and supports a conditional moratorium requiring developers to meet set requirements before building. Democrat Keisha Lance Bottoms flipped Georgia’s governor’s seat and called for a data-center moratorium during her campaign. FT reported, citing real-estate investment group CBRE, that Atlanta has nearly 2.9 GW of data centers under construction.

In South Carolina, Democrat Annie Andrews won the race after calling for a data-center moratorium and tech protections for kids. Politico reported that pro-tech industry super PAC Building the Future spent $4.8 million on Republican Darline Graham in the final weeks of the midterms.

In a Wednesday morning post on X, SpaceX CEO Elon Musk wrote, “Data centers in space looking pretty appealing right now.” Musk spent a record $446 million on candidates who mostly lost, including Ken Paxton and Vivek Ramaswamy.

President Trump’s renaming of “artificial intelligence” as “super intelligence” has tested technology leaders, including those who opened their wallets for his various D.C. construction projects, the Wall Street Journal reported. Nvidia Chief Executive Jensen Huang has used “SI” for certain audiences and “AI” for others.

AMD’s ongoing effort to diversify its business and capitalize on the AI boom helped the chip designer beat Wall Street’s sales expectations, reporting $13.4 billion in sales for the quarter. Sales of GPUs to data centers accounted for 64% of AMD’s total revenue, up from 47% a year earlier. AMD also sells more basic processors, such as CPUs.

Last week, Intel, AMD’s top rival in the processor market, saw its shares plummet more than 20% in a day after reporting weakness in PC sales. On Tuesday, server company Super Micro Computer reported a near-fourfold increase in revenue as customers continued spending heavily on AI infrastructure. Super Micro also reported a fiscal first-quarter profit of $1.59 billion, up from $168.3 million a year earlier.