Democrats’ wins could bring stricter AI and data-center rules

Datadog’s revenue growth slowed after its largest customer reduced usage

U.S. technology markets opened Nov. 4 with S&P 500 futures up 66 points after Democrats swept Congress and President Trump said he looked forward to working with Democrats. Nasdaq futures also rose, but data-center infrastructure was an area of weakness. Richard Flax, Moneyfarm’s chief investment officer, said a Democratic-controlled Congress could bring greater scrutiny of the technology sector given the scale of investment in AI infrastructure.

Allianz Research strategists said Democrats had campaigned heavily for more regulation of AI and data centers and that the election result increased that risk. The strategists wrote, “Governors-elect who back a full or conditional moratorium now preside over 47 GW of planned data-center capacity.”

Federal action would still face limits. Lizzy Galbraith of Aberdeen said, “Attempts to pass legislation introducing greater federal oversight of AI and the data center build-out are likely.” She said Democratic lawmakers could roll back data-center tax credits or introduce less permissive planning laws, but any legislation would likely need bipartisan cooperation in the Senate and avoid a presidential veto, limiting its likelihood.

Patrick Munnelly of Tickmill Group said Democratic opposition could focus on power use, environmental constraints, local infrastructure strain, competition policy and the social consequences of AI deployment. He said the sector had lost momentum after a sharp tech selloff in recent weeks as investors questioned elevated AI spending and semiconductor valuations. Tighter oversight could raise the hurdle rate for investment without necessarily breaking the long-term AI theme, Munnelly said.

In Texas, the state described as the epicenter of the U.S. data-center boom, Republican Governor Greg Abbott lost to Democratic State Rep. Gina Hinojosa, who was expected to take a tougher line on data centers. CoreWeave, Nebius, Applied Digital and Oracle were down in early trading.

Uber said it expects minimal to no further deals through at least 2027 as it focuses on integrating the acquisitions it has already announced. That would end the company’s recent acceleration in dealmaking across its mobility and delivery businesses. In 2026, Uber acquired chauffeur service Blacklane and parking app SpotHero and announced agreements to buy German food-delivery company Delivery Hero and catering platform ezCater. The Wall Street Journal previously reported that Uber had also been in talks over a potential Instacart deal, while rival DoorDash recently announced its agreement to acquire Instacart for $17 billion.

Demand problems showed in Uber’s core ride-hailing segment, its largest by revenue. Third-quarter revenue fell 2%, the company said, as elevated fuel costs, tighter local labor conditions and competition for drivers prevented it from meeting demand in several international markets, including India and Brazil. U.S. growth moderated much more modestly, Chief Executive Dara Khosrowshahi said. Uber responded by investing in driver acquisition, retention and reactivation where demand was outpacing supply, and its shares were up 3.5% in early trading.

Khosrowshahi said in prepared remarks, “Encouragingly, overall Mobility growth trends improved in October.” He said Uber was confident it could return its mobility unit to more consistent year-over-year growth in the fourth quarter. The company described driver acquisition, retention and reactivation in international markets where demand exceeded supply as a strategy that had worked previously and was beginning to show results.

Uber is also narrowing the range of autonomous-vehicle partners it supports, even as its base has grown to include dozens of startups across ride-hailing and delivery. Khosrowshahi said, “Building a broad ecosystem does not mean spreading our resources evenly.” The company plans to concentrate resources on partners with the clearest paths to scaling commercial operations and attractive economics, he said.

Datadog reported strong third-quarter results, with CEO Olivier Pomel saying on an analyst call, “We saw strength across our business, including across our product lines and across our diverse customer base.” Revenue growth from non-AI customers accelerated for the fifth straight quarter, while the AI-customer cohort “continued to grow and diversify, both in the number of customers we serve and in the scale of those customers,” he said.

Those gains came with the effects of customer concentration. An undisclosed AI company that serves as Datadog’s largest customer reduced usage in the third quarter, weighing on revenue and the outlook. The company’s fourth-quarter outlook assumed that customer would reduce usage to its minimum commitment, CFO David Obstler said. Overall third-quarter revenue grew 35%, a sequential slowdown from 36% in the previous quarter, while “Excluding our largest customer, revenue growth accelerated again,” Obstler said. Datadog forecast fourth-quarter revenue of $1.19 billion to $1.2 billion, below expectations, and its shares slid 12% in premarket trading.

AMD reported robust quarterly earnings, with Quilter Cheviot’s Ben Barringer saying data-center demand drove revenue growth. Barringer said, “This is a wave that AMD will continue to ride even if the midterm election results paint a more challenged picture for data center buildout.” He said investors increasingly viewed AMD as an alternative source of chips to Nvidia and that the company was taking market share and improving its supply. AMD shares rose 7.2% in premarket trading.

The New York Times Company’s growth continued to be fueled by its digital business in the third quarter. Digital-only subscription revenue rose 14.6%, digital advertising revenue rose 12%, and the company added about 420,000 net digital-only subscribers sequentially — more than it added during the previous two quarters. Its shares rose 0.6%.

Taken together, the roundup showed technology companies operating under two different forms of pressure: possible changes in the rules for AI infrastructure after the midterms, and company-specific changes in demand, customer use and corporate strategy. Uber was pulling back from acquisitions while trying to expand driver supply; Datadog was absorbing a reduction from its largest customer; and Quilter Cheviot analyst Ben Barringer said AMD was benefiting from data-center demand. The election-related risks remained prospective, while the operating changes were already reflected in reported results and company guidance.