One of the clearest messages from Tuesday’s US midterm elections had nothing to do with Republicans or Democrats. It was a resounding rejection of data centers.
Communities across the country voted on dozens of ballot measures involving data-center construction, zoning, moratoriums and development restrictions. Almost everywhere, voters came down on the same side: against new development.
The margins were extraordinary in many places.
Granville, Ohio: 82.5% voted to prohibit data centers.
Sunbury, Ohio: 78.6% supported a ban on large data centers, potentially affecting a proposed $2 billion Amazon project.
Trenton, Ohio: 79.6% backed restrictions on large-scale data centers.
Edgewater, Florida: 77.6% supported a ban on new data centers and expansions.
Bloomington, Illinois: 77.6% supported an advisory moratorium.
Alhambra, California: 82.4% supported a ban, with counting still incomplete.
Boulder City, Nevada: 70.6% opposed allowing data centers in a designated development area.
Ashville, Ohio: 81.6% rejected a development agreement involving EdgeConneX.
Downe Township, New Jersey: 87.3% opposed data-center development in an advisory vote.
In Illinois, four Madison County townships voted on whether officials should permit data centers. All four rejected the idea, with opposition ranging from roughly 74% to 83%.
The results weren’t literally unanimous. One North Dakota measure reportedly went the other way, and several jurisdictions were still counting. But the overall picture is remarkable, and looks like it will be 44 of 45 ballots rejecting data centers and many pro-data center candidates losing elsewhere. This is a 70/30 issue, if not 80/20.
You would think they were putting toxic waste on the agenda.
The consistency of the results is difficult to ignore.
The opposition also cuts across party lines and geography. The complaints are familiar: electricity costs, water consumption, noise, pressure on local infrastructure and concerns that large technology companies receive tax incentives without delivering enough permanent employment.
For financial markets, this is worth watching closely. Shares of Neoclouds NBIS (-4.8%) and CRWV (-6.5%) are down heavily today despite a big rebound in stock futures that has the S&P 500 up 1.1%.
The AI investment boom depends on an enormous pipeline of new data centers, along with the power generation and transmission capacity needed to run them. Technology companies have committed extraordinary amounts of capital to this buildout, and those spending plans underpin expectations for semiconductor demand, electrical equipment, utilities and construction.
Tuesday’s votes won’t bring that investment to a halt. Local bans can face legal challenges, and developers can shift projects to more accommodating jurisdictions. Some measures are also nonbinding.
The industry has generally focused on whether enough chips, electricity and capital are available to support its expansion. The election results suggest obtaining permission to build may become just as important and I think there is already a shift underway where tech companies are forced to buy that consent via expensive taxes or paying for things like schools. That’s flipped the old script of companies getting tax waivers to build in communities.
There is also a political dimension. With voters delivering lopsided verdicts against data centers, politicians at the state and federal levels may find it increasingly attractive to promise restrictions, tougher permitting rules or greater protection against electricity-price increases. I think that flows towards AI in general, if not tech.
The irony is that the United States is pouring hundreds of billions of dollars into winning the AI race, but voters in the communities being asked to host the infrastructure increasingly want no part of it.
Nasdaq futures are up 0.4% today.
This article was written by Adam Button at investinglive.com.