US Data centers are on the ballot
How the midterm elections could reshape data center regulation, investment, and the future of AI-driven growth.
A Democratic sweep in the midterms would raise the prospects of federal legislation to ensure data centers contribute more to grid costs and improve environmental reporting. Federal action would be more limited in a split Congress. Regardless, the data center debate will intensify into the 2028 presidential election.
The outcome of gubernatorial races matters much more for the data center buildout, especially in Texas, Georgia, and Ohio. Simultaneous tightening of policy toward data centers across the South and Midwest is the main downside risk, though local opposition mostly relocates projects rather than stopping them.
Data center opposition softens appreciably when projects deliver local benefits or supply their own power. National security concerns and bipartisan lobbying should limit the bite of future regulation, which justifies not changing the baseline despite the rising political backlash.
The threat of moratoriums and tougher rules may be pulling data center construction forward into this year. Even if they materialize after the midterms, they wouldn’t immediately spell the end of AI capex’s GDP boost. Longer term, a slower buildout wouldn’t necessarily be a bad outcome for the macroeconomy.
