Elephant in the room: midterms were a data-center rebuke in some states

In some states, the blue wave hit harder than anticipated, as this once-niche infrastructure concern turned into a central political concern, particularly in data center-rich regions. How the changes to governorships and Congress may or may not decelerate data center buildouts remains to be seen, but below is a quick rundown of some of the most relevant results pertaining to AI infrastructure:

Texas: Perhaps the most surprising was Democrat Gina Hinojosa’s win over incumbent Greg Abbott in TX, breaking 30-year streak for Republicans there. Hinojosa’s platform centered on a statewide moratorium on new data center construction and a promise to freeze new permits until the state legislature passed regulations giving communities a bigger voice in AI infrastructure decisions. She also promised to end Texas’ 20-year sales tax exemptions for hyperscale data centers, as well as to take action on environmental and utility-rate reforms.

Virginia: Loudoun County represents the world’s largest data-center hub, and it saw a whopping 21-point electoral swing last night, building somewhat on the momentum of last year’s gubernatorial win by Abigail Spanberger, who has thus far offered what she calls “qualified support” for data centers – most recently with her Data Center Accountability Framework and EO 22 (issued last month).

Ohio: A state with about 200 operational data centers, Amy Acton won the gubernatorial race over Vivek Ramaswamy, and Sherrod Brown retained his Senate seat. Additionally, dozens of separate ballot measures related to AI data centers passed in various OH municipalities, with some looking for outright bans and others focusesd on implementing size restrictions.

Georgia: An historic win in Georgia, as former Atlanta Mayor Keisha Lance Bottoms became the first black woman to win a gubernatorial race in U.S. history. She won, in part, on promises to roll back unconditional state tax incentives for data centers in Atlanta’s metro centers. 

Kansas: Adam Hamilton unseated incumbent Senator Roger Marshall and as of publishing of this blog, Cindy Holscher held a razor-thin lead over Senate President Ty Masterson. That race is yet to be officially called. Additionally, there were a citizen-led ballot initiatives to restrict data center buildouts, as with a 10-year ban on “high impact data centers” in El Dorado, and Emporia’s passage of an ordinance prohibiting high-impact data center construction (facilities with peak electrical loads over 10 MWs and 10,000 gallons of water per day). Data center projects exceeding those threshold must be approved by a direct public vote.

In addition, Manny Rutinel (D-CO) and Annie Andres (D-SC) won their seats with promises to hold tech CEOs accountable with public hearings, and to pursue legislative changes to the Ratepayer Protection Act in favor of some iteration of the proposed Grid Savings Act.

Federal directives, like EO 14179, could also be weakened if House and Senate Democrats successfully champion the Guardrails Act. In addition, some of these candidates’ promises to take a closer look at upcoming megamergers could impact the industry, such as the $3.5 trillion Tesla-SpaceX mega merger on the horizon for next year.

RCRTech will continue to watch the results for further reporting.