Voters approved data center restrictions in 44 of 45 referendums with complete counts
Democrats who campaigned against data centers swept the midterm elections, and a tougher regulatory environment for the energy-hungry facilities is expected to follow even if President Donald Trump, whom The Associated Press described as perhaps the industry’s biggest champion, stalls any federal action. The party upended longtime Republican control of the governorships in Texas, Ohio, Georgia, Nevada and Iowa, many of them data center hotspots, after weaving pledges to restrict or slow the facilities into campaign platforms.
Data center regulation itself appeared on few ballots and was not among the top issues for most voters. But skepticism of the facilities and their impact on electricity prices often blended with the fight over affordability, a key campaign talking point for Democrats.
The breadth of the results gives those stances force. Besides taking control of Congress, Democrats flipped at least five governors’ offices and took full control of state governments in five more states: Wisconsin, Minnesota, Pennsylvania, Nevada and Michigan. Data Center Watch, a project of the AI security consultancy 10a Labs, said it tracked winning candidates for Congress and governorships and found the vast majority had expressed support for stronger regulation or even a moratorium. Among governors, 32 of the 34 victorious candidates in races where The Associated Press called a winner support stronger regulation or restrictions, and 12 of the 34 support bans or moratoriums, the group said.
The issue also drew heavy paid media, and data centers were a persistent presence in attack ads. Campaigns large and small spent more than $380 million on television ads mentioning data centers, according to data from AdImpact, and Democrats outspent Republicans on the topic by more than three to one.
In Texas, Clayton Tucker, the first Democrat elected state agriculture commissioner since 1986, said his pledge to fight data center development was critical to his victory. Everywhere he campaigned, he said, ranchers worried that data centers posed an existential threat to their dwindling water supplies. “You know, there’s an old saying around here that ‘whiskey’s for drinking and water’s for fighting,’” Tucker said. “And that’s exactly what happened.”
In Wisconsin, Gov.-elect David Crowley, a Democrat, changed his position during the campaign under pressure from his Republican opponent to take a harder line against the facilities. Initially opposed to any moratorium, Crowley later said he supported one, along with abolishing the state’s sales tax exemption for data center operators and developers. In an interview Thursday, Crowley said he is having discussions about what he will propose once he takes office. In the mix, he said, are requiring developers to disclose more about their water and energy consumption, ensuring a community supports a project before it can go forward, and insulating ratepayers and taxpayers from the energy costs of the projects.
The industry responded with new commitments and cautions. OpenAI published a framework Thursday enumerating new commitments to the communities where it develops data centers, and the company said it was asking federal, state and local policymakers to write “clear rules for how the industry builds.” “Lawmakers should establish rules to advance responsible investment, protect residents, and ensure that the benefits of AI infrastructure are broadly shared,” the company’s post said. The Data Center Coalition, an industry association, echoed the sentiment that developers need to keep trying to build trust with public officials and communities. Dan Diorio, a coalition official, said the industry is aware many midterm winners have vowed to impose a moratorium. “We should expect them to want to deliver on those promises, but there are going to be real world consequences of that,” Diorio said. Those consequences, he said, could include host communities missing out on tax revenue or payments from tech companies, and he noted data centers are driving a broader economic expansion that encourages investment in domestic manufacturing.
The election of data center skeptics adds challenges to stock markets riding high on the AI boom. The Nasdaq, which is full of AI-related and other tech stocks, sank 11% below its all-time high on Thursday amid worries that data center construction may slow because it is getting costlier to borrow money. Federal Reserve Economic Data (FRED) showed the index at 24,315.0 as of Nov. 6. AI data center construction is driving much of the U.S. economy’s growth, and any slowdown could have a broader chill. In an analyst report, Morgan Stanley said decisive results for Democrats carry “greater expectations for data center restrictions” that, under new state regulations, could “split the country into areas that are open to new data centers and those without.”
Morgan Stanley singled out Texas’ election of Democrat Gina Hinojosa as governor as the “most important election result” for data center development. Hinojosa has said she would block a permit for a data center if it was not a good deal for Texans or residents had not gotten a say in the matter. She defeated Republican Gov. Greg Abbott, who had touted Texas as “the epicenter of AI development” before trying to restrict the facilities late in the campaign. Morgan Stanley also said Ohio’s election of Democrat Dr. Amy Acton as governor “creates significant risk of data center project delays in the state”; Acton has pledged to block a data center project unless it meets certain standards.
Local election results also broke against data centers. Voters in local referendums cast ballots overwhelmingly in favor of restricting the facilities, according to an analysis by Redbud Consulting, a polling and data science firm. 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 — and reported that restrictions were approved in 44 of the 45 elections where counting was complete.
About three-quarters of U.S. voters oppose the construction of a new data center in their community, according to The AP Voter Poll, and majorities opposed adding one where they live in red and blue states alike. Support was higher in some traditionally red states, including Wyoming, West Virginia, Louisiana and Mississippi, and Texas voters in the Senate race were similarly likely to oppose a new data center near them. Despite the depth of that opposition, the poll suggested the issue was not particularly motivating in this election: about one-quarter of U.S. voters said AI data centers were “crucial” to their vote for Congress, well below the shares who said government corruption or the cost of living were highly important to their vote.
The stakes were especially high in Texas, which a report by the commercial real estate firm JLL projects will overtake northern Virginia as the largest global data center market by 2030. Hinojosa attacked Abbott during the campaign as having rolled out the welcome mat for data centers. Stephen Sanders, a Republican who co-founded a data center protest group in Lubbock, said Texans were especially attuned to the issue because of talk that the facilities threaten their electricity and water in the drought-stricken state. “I would say data centers were on the ballot,” Sanders said.