AI companies reassess data-center plans after midterm wins for freeze candidates

Meta and Anthropic explore overseas sites as U.S. approvals grow harder

The dust from the midterms had hardly settled Wednesday when OpenAI’s leadership began reckoning with an urgent question: whether the outcome would make it harder to secure the vast amounts of computing power the company needs to keep growing. During a question-and-answer session with employees, Chief Executive Sam Altman fielded questions about data centers and public sentiment on AI, according to people familiar with the matter. A day earlier, a wave of data-center opposition had helped candidates promising to freeze development win statehouses in Texas, Georgia, Ohio and Michigan — all major states for data-center sites, The Wall Street Journal reported.

Altman acknowledged that the public is concerned about water use and said that whatever the reason, he understood why people might not want to live near data centers, the people said. At one point, he mused that the company should perhaps look to build data centers in the desert.

The reckoning extended inside the company. Senior OpenAI leaders were discussing whether the company would need to reset expectations for its data-center capacity next year, the Journal previously reported. Employees involved in OpenAI’s data-center development were exchanging intelligence on newly elected Democratic politicians in key states and discussing how best to engage with them, according to messages viewed by the Journal.

Across Silicon Valley, similar scenes played out as tech companies that have committed hundreds of billions of dollars to the artificial-intelligence race, and cultivated relationships with AI-friendly officials at all levels of government, rushed to plan for a changed reality. Overnight, they found themselves facing the prospect of blanket moratoriums, tighter environmental regulations and longer review timelines, along with potential new AI-safety regulations that could further bog them down.

The tech investor Brad Gerstner put a number on the exposure, saying on the “All-In” podcast that as much as 35% of the U.S. data-center construction planned for next year is now at risk.

Executives in charge of government relations for so-called hyperscaler companies moved quickly to open lines of communication with incoming governors and their transition teams, seeking an understanding of how their campaign-trail rhetoric would translate into policy actions.

Dina Powell McCormick, who as president of Meta Platforms oversees its AI-infrastructure operations, said at the WSJ Tech conference Wednesday night that the company had already found one incoming governor prepared to parley.

“We did have a governor that won last night who did make data centers a big part of their platform say, ‘As soon as we get past the inauguration, let’s meet, because we don’t want to lose this investment in our town. We don’t want these jobs to go elsewhere,’ ” she said.

On the whole, Powell McCormick said, Meta assumes that building data centers in the U.S. is “going to be harder” and that getting new ones done from scratch will be “very challenging.” She said Meta and other tech companies are increasingly considering building new data centers outside the U.S. as one way around the new hurdles. Another avenue, she said, is scaling up existing data centers, where surrounding communities that have seen benefits in job creation and tax revenue don’t require as much persuasion.

Powell McCormick said the AI industry will have to get much better at talking about its product and its potential societal benefits to have any hope of winning over the public. “I think we have to double and triple down on telling the story,” she said. OpenAI President Greg Brockman, also speaking at the conference, echoed the point: “We need to do a better job of really communicating to local communities about why data centers are something that can be beneficial to them.”

On Thursday, OpenAI became the latest AI giant to unveil a broad commitment governing how it approaches building new data centers. The company said it would not require public officials to sign nondisclosure agreements to engage in data-center negotiations and that it would solicit community input and provide clear public information about the energy, water and noise impacts of its infrastructure investments.

Anthropic had already flagged a similar risk to investors. In an S-1 filing last week for a planned initial public offering, the company previewed the risk that local and state governments might adopt data-center moratoriums. “Such moratoriums, or similar actions, could delay or prevent the construction or expansion of facilities on which we depend for compute,” the filing said.

Anthropic said it is pursuing projects in several “non-U.S. jurisdictions” as part of a plan to “reduce concentration risks associated with operating a significant portion of our compute infrastructure in the United States.” The S-1 detailed approximately $895.4 billion of AI computing and infrastructure commitments through 2045. The company has separately announced plans to build data centers in Texas and New York, with sites coming online this year.