US tech stocks swung sharply after Democrats seized control of Congress in the midterms, raising fears over the future of the AI investment boom. Goldman Sachs estimates that states with Democratic lawmakers likely to restrict data centres account for about 45 per cent of planned US capacity. While the party is not explicitly anti-AI, many lawmakers want greater oversight, with some calling for a 'full-on pause' in frontier AI development or a two-year moratorium on new data centre construction. Incoming senators like Abdul El-Sayed and Annie Andrews have proposed aggressive restrictions, while Sherrod Brown has called for ending tax breaks for AI groups.
Still, Democrats are unlikely to pass federal legislation given Trump’s veto power, who has rejected calls for an AI slowdown. However, gubernatorial victories in data hub states like Texas, Ohio, and Georgia could have a more direct impact. Meta president Dina Powell McCormick acknowledged that there would now be 'a lot more review' regarding community acceptance of data centres. A planned $1bn Meta AI data centre in Piqua, Ohio, is in doubt after voters recalled officials and passed restrictive ballot measures. OpenAI’s Greg Brockman admitted tech companies had fallen short in selling projects to local communities. While some executives hope for a 'workable middle' next year, AMD’s Lisa Su expressed confidence that the backlash would not cause the company to revise its AI market projections.
Source: Financial Times Companies · Summarized by HeadlinesBriefing