After US midterms, data center industry faces stronger pushback
The Democratic victory in the US midterm elections and local ballot results against data centers could make building them harder, especially in Texas. Companies including OpenAI are already promising to change their practices.
Following the US midterm elections, in which Democrats won, the tech industry is bracing for a tougher environment for building data centers. The topic was discussed on the latest episode of TechCrunch's Equity podcast, where journalists examined what the vote means for the sector.
Data centers are large computing facilities needed to run artificial intelligence systems. In dozens of local ballot measures, voters came out against them. Voters also elected politicians who promised to restrict them, such as Texas governor-elect Gina Hinojosa, who defeated Greg Abbott.
Musk and Texas
TechCrunch's Sean O'Kane noted that Elon Musk, one of the biggest data center builders and also the Republican Party's largest donor, appears to have gained essentially nothing from donating half a billion dollars. His companies are based in a state that has turned strongly Democratic. A correction in the text also clarifies that many ballot measures actually imposed restrictions or moratoriums on data centers, and almost all of those passed.
Why the opposition
Colleague Kirsten Korosec said data centers were probably not the main driver of the "blue wave," but the issue is becoming increasingly grassroots. In her view, corporate secrecy contributed: officials were sometimes required to sign NDAs, and project scale was not disclosed in environmentally sensitive areas, including the Southwest, where water is scarce.
Company response
OpenAI has already released a "compute campus policy blueprint," promising to stop requiring NDAs and to operate with less secrecy. Korosec sees this as evidence that companies respond to signals of regulation. The journalists also noted that the new term may be an attempt to rebrand data centers.
TechCrunch's Anthony Ha added that investor enthusiasm for heavy spending on data centers and computing power has cooled, reducing the financial incentive to build them. Even so, to reach the scale they want, companies will still need to build data centers somewhere.
