The outcome of the U.S. midterm elections has put 37.5 gigawatts (GW) of planned AI data center capacity at risk. JPMorgan reports that another 15 GW could also be affected by possible increases in grid charges, water restrictions, and the loss of tax incentives. This situation arises as voters across the country showed strong opposition to data centers during the elections.
Key Details
Voters faced 41 local ballot measures about data centers in 10 states. Only one measure in Harwood, North Dakota, passed. Many of these measures had margins exceeding 70 percent against the industry. An NBC News exit poll showed that about three-quarters of voters oppose data centers in their communities. Over half of those voters cited AI and data centers as major factors in their decisions. Gallup found that seven in ten Americans do not want an AI data center nearby. Pew Research reported that those who believe AI will harm society outnumber those who think it will help by more than two to one.
Background
Due to this backlash, experts expect a slowdown in AI development. The incoming Congress may introduce new regulations. These could include mandatory testing of advanced AI models and stronger whistleblower protections. There are also talks about federal liability for AI-related issues and export controls on technology.
Related coverage: Democrats’ Midterm Wins Threaten Big Tech Data Center Plans, Asian Tech Stocks Plunge Amid AI Concerns Post Midterms.
A potential slowdown in AI development could hurt technology stocks and investment in the AI sector. Increased regulation may lead to higher operational costs and lower profitability. Investors will closely watch for specific regulatory proposals and their effects on the industry when the new Congress meets in January.
Based on reporting by: moneycontrol.com, fortune.com