It was a bad night for data centers.
In hotly contested gubernatorial races, Democrats who campaigned on pausing development beat Republican challengers who proposed more moderate approaches. At least 38 towns and cities passed ballot measures to restrict data centers locally.
The message voters sent was clear even to Elon Musk, who appeared to be writing off the future of data centers on Earth as results rolled in: “Data centers in space looking pretty appealing right now,” he posted on X on election night.
Americans’ strong opposition to data centers, and by extension the results of Tuesday’s elections, could have a real impact on the future of the industry. Some artificial intelligence industry stocks fell as investors contended with political shifts in states that host large swaths of planned development. The decisive swing toward Democrats in several states could allow governors and state legislatures to move quickly on state policy that places new regulations on AI infrastructure developers, restricting the massive growth they’ve pursued over the past two years.
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An analysis from Cleanview Energy, a company that tracks U.S. power infrastructure and data center development, shows 41% of the country’s data centers could be paused.
“I think data centers were just right at that nexus of both the cost and corruption issues that people cited in exit polls as their top two issues,” said Jesse Lee, a senior adviser at Climate Power, an advocacy group.
Lee called Tuesday’s results a “huge repudiation” of the data center build-out that has happened throughout the Trump administration. Democrats should start from scratch and reimagine an approach to data center policy that gives communities “a real say,” he said.
In Texas, Georgia and Ohio, Democrats who ran on data center moratoria won tough gubernatorial races. Nevada Democrat Aaron Ford, who ousted incumbent Republican Gov. Joe Lombardo, ran on pausing tax abatements and incentives and opposing data centers on public lands.
Democrats also won control of state governments in Pennsylvania, Wisconsin, Michigan, Minnesota and likely Arizona. Lena Moffitt, executive director of the advocacy group Evergreen Action, said those blue sweeps have given state officials the power to deliver on promises to lower energy costs using clean energy.
“A lot of that is going to look like data center accountability, utility accountability, and I think they’re going to move fast and strong on those things,” she said.
In Texas, Democrat Gina Hinojosa made data centers a major part of her race against Gov. Greg Abbott, putting out a set of priorities that included stopping data center companies from using nondisclosure agreements, requiring union labor, and stopping subsidies.
She hit Abbott on his 2015 signing of a law that allowed for 20-year tax breaks for data center developers.
Abbott reversed course in August, announcing a pause on data center approvals and an audit of the way those projects were handling water, power and community impacts. Attorney General Ken Paxton, who was trounced by James Talarico in the first Senate election in Texas that has gone blue in decades, also tried to get in on the action, issuing letters to push data centers to provide that information.
But those actions seem to have fallen flat for voters in a state where more than 80% said they were concerned about the impact data centers could have on the cost and quality of living and 79% support limiting the number of data centers that can be built, according to a survey from the University of Houston.
Hinojosa told ABC News that data centers reflect a larger problem voters have with longtime politicians, calling it a “physical manifestation” of a governor “doing the bidding of the moneyed interests and leaving the people to fend for themselves.”
For hyperscalers in that state, which accounts for about 26% of the country’s planned data center capacity, the stakes are high.
“It’s certainly not a great outcome for developers who were looking to build huge AI facilities and things sort of largely unchecked,” said Abhi Rajendran, a nonresident fellow at the Center for Energy Studies at Rice University.
Rajendran said Texas could back out of “heavy deregulation,” and even a modest regulatory environment could represent a big change.
Georgia’s Democratic governor-elect, Keisha Lance Bottoms, has also pushed for a pause on data center development. Her opponent, Republican health care executive Rick Jackson, focused throughout his campaign on the way local communities could benefit from data center development — a sentiment that hews close to President Donald Trump’s approach to data centers.
Trump has said communities that welcome data centers are “smart,” while calling those that reject AI infrastructure “backwards and poor.”
Ohio Republican gubernatorial candidate Vivek Ramaswamy also focused on the economic benefits of data centers, writing an op-ed in The Columbus Dispatch over the summer that advertised free electricity and slashed taxes under his data center plan.
He lost to Democrat Amy Acton, who cast Ramaswamy as a friend of “big-tech billionaires.” Acton has supported a conditional moratorium on data centers to ensure they cover their costs, build with union labor on brownfields and previously industrial sites where jobs have been lost, and operate transparently and under state environmental laws.
Michigan’s Democratic governor-elect, Jocelyn Benson, pushed for a moratorium until the state creates rules forcing AI infrastructure developers to negotiate with communities and pay for power, among other guardrails.
Tom Lenard, Michigan director at Climate Power, said Tuesday’s result amounted to a rejection of Trump’s agenda and alignment with big tech.
“The people of Michigan chose Jocelyn Benson in this election because they know she will work for an affordable future that includes access to cheaper, cleaner energy,” he said.
With these wins, the policy environment in key states where data center developers are trying to scale up quickly could become even more important in the coming months.
“Particularly if we don’t fix the stuff at the federal level, then the data center debate comes down to a bunch of states,” said Abe Silverman, an assistant research scholar at Johns Hopkins.
Silverman said despite the “crazy level of rhetorical bipartisan consensus” that data centers need to pay their own way, there’s been a major lack of real policy implementation. For states, making those rules will require guts, he said.
“That really requires some very bold leadership at the state level to make those kinds of hard choices, given the political power of the data center industry and the interest in the labor community in building data centers and the economic development imperatives and everything else,” he said.
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