By Salma El-Sakka
Democrats swept governorships in Texas, Ohio, Georgia, Nevada and Iowa during the midterm elections, campaigning on promises to restrict energy-intensive data centers. The issue featured in more than $380 million worth of television ads, with Democrats outspending Republicans by more than three to one, according to AdImpact data.
Governors pledge stricter oversight
Of 34 winning gubernatorial candidates in races called by The Associated Press, 32 support stronger regulation or restrictions on data centers, and 12 back bans or moratoriums, according to Data Center Watch. Wisconsin Governor-elect David Crowley shifted his position during the campaign to support a moratorium and ending the state's sales tax exemption for data center operators.
Texas and Ohio seen as pivotal
Morgan Stanley identified Texas Governor-elect Gina Hinojosa's victory over Republican Greg Abbott as the "most important election result" for data center development. Hinojosa has vowed to block permits that are not a good deal for Texans or lack community input. Ohio Governor-elect Dr. Amy Acton has pledged to block projects unless they meet certain standards, creating "significant risk of data center project delays," the firm said.
Local referendums overwhelmingly favor restrictions
Voters in 44 of 45 local referendums across 12 states approved measures restricting data centers, according to Redbud Consulting. An AP Voter Poll found about three-quarters of U.S. voters oppose new data centers in their communities, though only one-quarter called the issue crucial to their congressional vote.
Market reaction and industry response
The Nasdaq fell 11% below its all-time high amid concerns that data center construction may slow. OpenAI published a framework calling for "clear rules" on AI infrastructure development, while the Data Center Coalition warned that moratoriums could cost host communities tax revenue and slow domestic manufacturing investment.
