Midterm Election Sparks Rising Political Conflict Over Data Centers

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Midterm election results have altered support and resistance dynamics around data centers, as Democrats now control Congress. Over half of voters express concern about AI, and nearly 60% cite data centers as a key issue. Local bans, such as those in Ohio, signal growing opposition. Analysts warn of potential delays and new regulations, including proposed bills to prevent cost-shifting. Environmental and trust concerns are fueling the backlash, increasing the risk-to-reward ratio for tech companies.
CoinDesk reports:

The November 3 midterm election results gave Democrats full control of Congress, setting the stage for one of the most severe divisions in U.S. government this decade, with the White House under Republican control.

Tuesday’s results showed that anger over data centers—large facilities housing the computers that provide computing power for AI—is becoming a political force. With Democrats now controlling Congress, this could lead to new restrictions on where data centers are located and how much say local communities have.

Data centers have become ballot issues in multiple states. NBC’s exit polls show voters have high levels of concern about AI: more than half of respondents believe AI does more harm than good, and nearly 80% oppose building data centers in their own communities. Meanwhile, nearly 60% said data centers were a key or major factor in their voting decisions. Nadine Smith, President and CEO of the civil rights organization Color of Change, said Tuesday’s election was a referendum on “who this economy is really built for.”

Smith said, “National security is important.” She was referring to a common argument made by data center proponents—that such infrastructure is critical for the U.S. to maintain an edge in war and in competition with China. “But the families in South Memphis who are breathing in the exhaust from gas turbines powering AI supercomputers are just as important.” Here, she was referring to xAI’s data center in Memphis, Tennessee, which is powered by gas turbines.

Despite AI-backed super PACs spending millions of dollars in this midterm election to influence voters, voters in multiple states have opposed the expansion of AI infrastructure. The backlash against data centers has been especially pronounced in Ohio. OpenAI had considered building a $50 billion data center there, with over $100 billion in financing support from NVIDIA. In fact, a county in Ohio where Meta originally planned to build a 700,000-square-foot facility has just enacted a ban on data centers, and communities across the state have overwhelmingly voted against measures to expand data center development.

Morgan Stanley analysts predict that elected Democratic governor Amy Acton also poses a significant risk to data center expansion in Ohio. Elsewhere, candidates in Texas, Maine, Michigan, Nevada, Georgia, and South Carolina have won seats after taking positions opposing rapid data center expansion. Aniketh Koneru, a technology and policy researcher, said, “It’s clear that money can’t buy results.” He added that in modern politics, portraying a “local villain” is a way to build campaign momentum.

Future measures may include additional construction halts or requiring data centers to bear the costs of grid upgrades themselves, rather than passing these expenses on to nearby communities. Goldman Sachs actually predicts that data center construction in places like Georgia and Texas will be delayed due to progress by the Democratic Party.

Democratic control of Congress could also increase the likelihood of bill passage, such as a proposal introduced earlier this year by Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez, though such bills may still face presidential vetoes. The bill proposes a nationwide pause on the construction of new data centers until additional safeguards are enacted by Congress, ensuring that expansion does not drive up electricity prices, harm the environment, or proceed without community approval.

Additionally, the GRID Savings Act, proposed by New Mexico Senator Martin Heinrich, aims to prevent the costs of grid infrastructure expansion from being passed on to communities during the growth of large AI data centers. Environmental concerns are also a major issue, particularly regarding xAI’s data center in Memphis and data centers across Virginia—known as the “world capital of data centers”—which are powered by gas turbines. Maia Woluchem, Project Director at the nonprofit research organization Data & Society, believes that changes in energy regulation, land rights, and other environmental policies could impact the expansion of data centers, especially as Democratic members of Congress further examine the Trump administration’s rollback of certain energy protections, as reported by The New York Times.

Woluchem continued: “Regardless of what action is taken at the federal level, I can envision that, given the momentum built from the ground up, we’ll see more activity at the state and local levels.” She cited elected Governor Gina Hinojosa, who supports a statewide moratorium on data centers. Both Hinojosa and Greg Abbott have called for some restrictions, but Hinojosa made opposition to data centers a significant part of her campaign—a stance that is particularly notable given that Texas’s power grid has proven vulnerable over the past decade.

But the tougher part is still ahead. Smith said she now expects a fight, and possibly more executive orders, to bypass what Congress might now block. “Even within the Democratic Party, a full freeze is controversial,” she said, referring to some Democrats who worry that a pause could slow AI progress and harm national security.

She also expects AI lobbyists to begin reaching out to lawmakers. Smith said, “The Democrats campaigned on making big tech pay. Our job is to make sure they remember that once the cameras are gone.”

The root of this backlash runs deeper than the data centers themselves. Data centers are not new. A private equity executive recently told me that people don’t necessarily hate data centers—they hate AI, and data centers have become a proxy for their fears and anxieties about this technology. “In effect, this at least reveals genuine discontent with technological power,” Woluchem said, noting that it is also an issue that unites both political parties.

Over the past month, many people have told me they are concerned about the environmental impact of data centers and feel they have little to no say in whether these facilities are built.

For example, Amazon built a data center in Gilroy, California, with little to no notification to local residents, simply complying with a zoning regulation that is 45 years old. Vague or outdated zoning laws, along with requirements for local officials to sign non-disclosure agreements (NDAs) prohibiting them from discussing data center projects, only further fuel public anger over expansion. Data centers have also received billions of dollars in tax breaks; although many tech companies emphasize benefits such as job creation and community initiatives, for many people, these remain far from sufficient.

People want to know that they still have a voice in what happens in their communities. Many also fear that the expansion of AI will ultimately benefit only a small group of wealthy individuals, while their communities bear the costs and face rising living expenses.

Smith said: "If AI infrastructure is truly a national priority, then the companies building these facilities should be able to pay for their own electricity, meet clean air standards, disclose what they’re using, and build only with neighbors’ consent. Households shouldn’t subsidize the wealthiest companies in history through their utility bills."

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