Democratic gubernatorial candidates who pledged to halt data centre development swept to victory on Tuesday night, threatening to derail billions of dollars of planned investments for the AI boom over the coming years. Three states at the centre of the AI build-out — Texas, Georgia and Ohio — elected Democratic candidates who have pledged to crack down on building data centres. The “blue wave” of results on Tuesday, which also included a number of local ballot measures blocking the data centre construction, marked a sharp rebuke to President Donald Trump’s endorsement of the AI infrastructure building spree.
Many Republican candidates had already started to distance themselves from Trump on the issue during the campaign. AI spending by a small number of Big Tech companies has supported much of the stock market gains since Trump took office. But the power-hungry computing complexes have sparked nationwide anxiety over their impact on air and noise pollution and electricity and water bills.
Futures tracking the Nasdaq 100, which is heavily concentrated in tech stocks, fell 2.1 per cent, while S&P 500 futures dropped 1.2 per cent, setting both markets up to open lower on Wednesday. Democrat Gina Hinojosa pulled off an upset to beat incumbent governor Greg Abbott in Texas, having promised an immediate moratorium on data centre development in the state. Texas has lured tech giants including Open AI, Anthropic, Oracle, Microsoft, Google, Meta and Amazon with tax breaks as well as abundant energy and land.
According to real estate investment group CBRE, Georgia’s capital Atlanta has nearly 2.9 gigawatts of data centres under construction, overtaking Northern Virginia as the biggest US data centre construction hub. Democratic gubernatorial candidate and former Atlanta mayor Keisha Lance Bottoms has promised a temporary statewide pause. Ohio’s Amy Acton, who beat Vivek Ramaswamy in the Ohio gubernatorial election, has also promised a conditional freeze on new approvals if they do not meet strict energy- and water-use criteria.
Trump has championed the build-out, alienating parts of his grassroots base. In September, he doubled down on his position, branding a pushback against data centres and broader concerns about AI safety a “hoax”. But both Republican and Democratic gubernatorial candidates broke with Trump to support a slowdown, in recognition of how politically explosive the issue has become.
According to one NBC exit poll on Tuesday, 56 per cent of respondents said that AI and data centres had been a “crucial or a major factor” in casting their votes for Congress. “Data centres in space looking pretty appealing right now,” Tesla and Space X chief executive Elon Musk posted late on Tuesday. Musk, a close ally of Trump, has committed tens of billions of dollars to AI infrastructure, including his “Colossus” campuses in Tennessee and Mississippi. Twenty-six gubernatorial candidates across 21 states backed some form of moratorium on data centre development ahead of the midterm elections.
Dozens of ballot measures also targeted data centre construction — with Ohio voters alone facing 21 such initiatives. Governors’ power to change policies around data centres depends on state laws, and some may have to work with legislators to make big changes. Ballot measures, meanwhile, give voters a direct opportunity to register their discontent.
Source: Financial Times Companies · Summarized by HeadlinesBriefing