Democratic Wave Changes AI Policy Calculus
Plus, a reckoning for tech executives and the data center build-out
The ascendance of Democratic leadership in the House and Senate challenges many assumptions about the outlook for tech policy.
Of course, it’s too early to know what if anything will emerge in terms of specific legislation governing data center construction and AI safety, two areas of rising public concern. But the prevailing wisdom in recent years was that nothing would come out of Congress, and now that assumption seems less certain than it did before the midterm elections. A tech market driven by uncertainty over the pace of innovation and returns on capital investment may now have to price-in a higher degree of political uncertainty as well.
Even if President Trump vetoes tech legislation during the remainder of his term, his successor in 2028 might not. And until then, Democrats may have a clearer shot at passing tech regulation at the state and local levels.
Tech leaders who worked closely with the Trump administration will have to reach across the aisle as well. That’s always true, but it’s truer when power changes hands.
Tech analyst Dan Ives of Yorkville Ives wrote this morning that the midterm election “was a seismic shift that will have a negative impact on the pace of the AI Revolution build-out in the U.S. over the next few years.” He predicts that the pace of the planned 800 to 1,000 datacenters across the U.S. will slow. The biggest impact may be in Texas, he said, where Democrat Gina Hinojosa beat incumbent Greg Abbott. An estimated 25% to 30% of data center gigawatts and capacity will come from that state, according to Ives.
If the expansion of AI infrastructure supply slows down, it stands to reason that enterprises and other consumers of technology will have to contend with relatively higher prices for longer periods, possibly having an impact on the diffusion of AI across the economy. That could give the rest of the world, including China, an advantage in a global technology race.
Today, we assess the areas where the election raises the odds of change in tech policy and regulation that matter to business leaders the most. More below.
Tougher on AI Regulation
The Wall Street Journal reports that one way Democrats are likely to focus on artificial intelligence is by bringing in top executives to testify about their close relationships with the White House.
AI regulation will also be a higher priority, the WSJ notes, after a wave of hacks by recent AI models and warnings from industry researchers that the technology could be capable of destroying humanity within the next decade.
Progressives have also proposed bills targeting the data centers underpinning the AI boom, hoping to curtail their power usage and address a recent backlash that swept across the country.
Incoming Governors Target Data Centers
Last night’s wins could put half of the nation’s proposed data centers under stricter oversight with candidates supporting a slowdown winning at state and local levels, Bloomberg reports.
Texas. Democrat Gina Hinojosa, who unseated Greg Abbott last night, has called for an immediate moratorium on construction until lawmakers pass protections for communities. About 13 GW of capacity is immediately exposed, Bloomberg reports.
Ohio. Democrat Amy Acton flipped the governor’s seat in the state. Acton supports a conditional moratorium requiring developers meet set requirements before building.
Georgia. Democrat Keisha Lance Bottoms also flipped the governor’s seat. Bottoms on her campaign called for a data center moratorium . Atlanta has nearly 2.9 GW of data centers under construction, FT reports, citing real-estate investment group CBRE.
Politico reports how pro tech industry super PAC Building the Future spent $4.8 million on Republican Darline Graham in South Carolina in the final weeks of the midterms. The winner of the race, Democrat Annie Andrews has called for a data center moratorium and tech protections for kids.
And in the pre-midterms Beltway/Valley Nexus…President Trump’s edict renaming “artificial intelligence” as “super intelligence” has tested tech industry leaders, even those who opened their wallets for his various D.C. construction projects. Nvidia Chief Executive Jensen Huang has used SI for certain audiences, and AI for others, the WSJ reports.