Midterm Elections and Data Center Buildout: Experts Weigh In
The Democrats' midterm election victories could impact data centers, according to Wall Street analysts. As of Wednesday, ballot measures restricting data centers had been approved in 37 states, compared to only one allowing them, indicating a potential shift in public sentiment.
Public Opposition to Data Centers
The rapid expansion of data centers to support artificial intelligence has faced strong public backlash, with a CBS News poll showing that more Americans oppose than favor building a new data center in their area.
Focus on Texas and Georgia
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Texas: Franklin Templeton's Stephen Dover predicts a slowdown in data center construction due to the election results, bringing new regulations and costs. Texas, expected to account for 25% to 30% of the data center capacity online by 2030, could be significantly affected. Democrat Gina Hinojosa's win over Republican Greg Abbott in the governor's race includes a proposed temporary ban on data center construction.
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Georgia: Keisha Lance Bottoms' gubernatorial victory also has implications. She campaigned on pausing new data center construction and plans to review tax incentives. Bottoms indicated she would sign an executive order for the pause.
Analysts' Perspective
Yorkville Ives & Co. analyst Dan Ives suggests that the midterm elections will indeed slow the pace of data center development, especially in Texas. GLJ Research's Gordon Johnson estimates that Hinojosa's win could stall 13 gigawatts of data center power in Texas.
While data center moratoriums may delay construction, economists predict that they won't significantly impact capital spending on AI or hamper economic growth. Dover of Franklin Templeton agrees, stating that while expansion may be tempered, it is unlikely to be dramatically hindered.