Democrats move to rein in AI build out, zero in on data centers after midterm wins

The post vote message: tap the brakes on data centers

Coming off a strong election night, Democrats quickly turned their attention to the AI infrastructure boom. On X, Sen. Bernie Sanders, I-Vt., pointed to local ballot measures that backed limits on data centers and posted, "National data center moratorium now," he wrote.

That push extended to the House. In a post, Rep. Yassamin Ansari, D-Ariz., said the House's large Democratic majority should make a pause in AI development its top priority on Day 1. The Congressional Progressive Caucus chair, Rep. Greg Casar, D-Texas, boosted the post with a one-word reply: "Yes!"

Democrats who captured key races on Tuesday also took direct aim at big tech companies and data centers. Ohio Democrat Sherrod Brown emphasized that his allegiance isn't to data centers and said his victory over incumbent Republican Sen. Jon Husted sends him back to the Senate.

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Governors weigh in

Pennsylvania Gov. Josh Shapiro, who in August signed an executive order intended to slow the build-out of data centers, argued that big tech companies should not be the ones setting residents' futures and said local communities should have the final say.

Texas is the linchpin for new capacity, with 27% of planned U.S. data center build out located there, per Wells Fargo. Gina Hinojosa - a Democrat who unseated incumbent Republican Gov. Greg Abbott - did not mention data centers in her victory speech, though they were central to her campaign. In a late October video posted to X, she said that if elected governor she would halt approvals for all data centers until the legislature passes protections for Texans, framing it as part of a broader debate over who the state serves.

Markets react and why that matters

AI exposed names softened on Wednesday after the vote, and the pullback deepened on Thursday as investors weighed whether Democratic gains could affect data center construction. Chipmakers led the drop. The iShares Semiconductor ETF dropped close to 9% on Tuesday, with Nvidia down 8% and Advanced Micro Devices off more than 14%.

Voters' views point the same way. In the CNBC Voter Poll, 56% reported that AI and data centers counted as an important or significant element in their decision, and 65% of those voters backed a Democratic congressional candidate. The bottom line: if approvals slow or projects get pushed out, chip and infrastructure suppliers are already showing they move with the policy outlook. Watch signals from Washington and Texas, because they are showing up in your portfolio.

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