By Nicholas Stephenson, Data Journalist
Fueled by anger over the Iran War and failure to bring down prices, Americans sent a blue wave sweeping across the country last week. CNN’s exit poll found that 89% called the cost of living a crucial or major factor in their vote, and 74% said the same of the war.
But under the surface, another political fault line was emerging. For the first time, infrastructure became a key wedge issue in American politics, as we forecasted in July when mainstream pollsters we were speaking to had it sitting outside their top 20 issues. In the same CNN poll, 56% of voters said AI and data centers were a crucial or major factor in their vote, with Democrats winning 64% of that group. But concern over the issue was not confined to the left: 76% of voters opposed a new data center being built in their community, and a July Fox News poll found that 60% of Republicans did too.
The Democrats were quick to spot and exploit this opening. The DCCC put data centers into 31 of its 69 “redboxes”, the messaging guides for its target House races, pitching attack lines which put Republicans’ support for tax incentives and ties to developers in the crosshairs. Democrats spent $140 million on data center ads in the general election, out of $173 million in total, and about $95 million of that total aired in Ohio, Michigan, Wisconsin and Pennsylvania.
In Ohio, Sherrod Brown pilloried Jon Husted with ads claiming he “cut sweetheart tax deals” with developers while Ohioans “watched their electricity bills explode”, ads that cut through to the extent that a leaked National Republican Senatorial Committee memo said that data centers were “the anchor hanging around Husted’s neck”. James Talarico similarly released an ad attacking Ken Paxton for giving data centers “billions in special tax breaks” while also blaming them for “skyrocketing utility bills” in Texas. And then there was independent candidate Dan Osborn, who joined the fight with a typically eccentric ad which mocked Pete Ricketts for providing “tax relief for Google and their hardworking air conditioners” then depicted Ricketts summoning OpenAI and Anthropic data centers onto Nebraska farmland with lightning shooting from his hands. Though often exaggerated and at times stretching the truth (FactCheck.org shows data centers’ impact on electricity prices is considerably more nuanced), the ads struck a chord with voters: all but Osborn went on to win their races.
Legislation, Regulation, Litigation
So, what will politicians actually do, now that the campaign is over and they are on their way into power? The answer is that it depends heavily on the state. Some are tightening rules and regulations, others are withdrawing tax incentives, and a few are considering pauses and moratoriums.
Texas’s governor-elect, Gina Hinojosa, has promised a moratorium until residents are given “a seat at the table” in data center approval decisions. Pennsylvania’s Josh Shapiro also backs giving communities an opt-in, but opposes a moratorium. New Jersey’s Mikie Sherrill is similarly against a moratorium, but wants data centers to pay for their own power and grid upgrades. Some of the toughest rhetoric, however, comes from re-elected Republican Governor Kelly Ayotte in New Hampshire, who backs a multi-year moratorium. Our interactive map at the top of this page rates how buildable each state is for 2027, based on its current laws, who controls the governorship and legislature, and the direction policy is heading.
No exceptions to the rule?
When it comes to local referendums, the picture isn’t any rosier. Of the 47 data center measures on local ballots on November 3, the side favoring restrictions won every decided vote but one, from deep-red rural communities across the Rust Belt and Kansas to bright-blue California cities. The measures themselves varied, ranging from outright bans and moratoriums on new developments to demands for greater public oversight, approval requirements and tighter zoning rules.
Just one community bucked the trend: Harwood, North Dakota. Ten miles north of Fargo and with a population of just under 1,000 people, Harwood voted 325 to 105 against a charter amendment requiring independent reviews and public hearings for major industrial projects. But this was no ringing endorsement of data centers or AI infrastructure. Residents weren’t voting for the data center, which had already been approved and was under construction, but against new oversight rules they feared would cost the town money and push its tax revenue into Fargo. The result reflected practical self-interest, as residents weighed the prospect of greater oversight over future projects against the risk of losing the financial benefits of a project already approved and which seemed destined to proceed inexorably, regardless of their vote.
To whom go the gains?
At the heart of the growing backlash against data centers is an outdated and increasingly threadbare argument: that projects will generate economic growth whose benefits will eventually trickle down into the community in the form of jobs, investment and increased local spending. But for rural and post-industrial communities that have seen few gains from growth over recent decades, this promise is dead on arrival. A manual worker or farmer, who rarely, if ever, uses AI and has little practical need for it, is unlikely to see what benefit a data center offers them, particularly when the technology it powers poses a longer-term threat to their livelihood through automation. So these people are asking a more direct and immediate question: what, exactly, is in it for us?
And that question is particularly tricky to answer, because the local benefits of data centers are difficult to demonstrate in ways that are tangible. A factory may provide hundreds of local jobs and sustain a wider industrial ecosystem of suppliers, maintenance contractors and engineering firms. Data centers, by contrast, are relatively self-contained operations, often employing fewer than a hundred people beyond the construction phase and doing little to catalyze a wider industrial ecosystem of local suppliers and businesses. Although data centers can bring investment into local economies, their principal output is increased computing capacity, the benefits of which are distributed across customers hundreds or thousands of miles away, leaving host communities with relatively little direct return. This disconnect is succinctly captured in a quote from a Sherrod Brown campaign ad, in which a resident near Google’s Lancaster facility said: “No one asked for that data center to be built here. And no one here is getting a damn thing from it, except higher electric bills.”
Redrawing the battle lines
Recognizing the paucity of tangible returns for host communities, many companies have swiftly pivoted toward a new narrative built around promises of more direct local benefits in order to secure public support. While the midterm results will no doubt accelerate this shift, it was gathering pace long before last week. In August, AEP Ohio and five data center companies, including Amazon, Google and Meta, committed more than $18 million to the utility’s Neighbor to Neighbor bill-assistance program, which offers low-income households up to $500. Microsoft, meanwhile, has pledged to explore ways of redirecting excess heat from its data centers into local district-heating networks. This is already happening at its Høje-Taastrup facility in Denmark, which is designed to supply enough recovered heat to warm around 6,000 homes.
Politicians seeking further regulation are also consolidating around a new narrative, one that seeks not to present regulation as an attempt to obstruct the AI industry, but instead as a way of giving residents a voice in local decisions. Pennsylvania’s Josh Shapiro, for example, signed an executive order in August that requires developers to secure local approval before state permits are granted, and ties those permits to legally binding commitments on energy costs and environmental protection.
In sum, while data centers may not have been the number one issue when people went to vote last week, the blue wave has brought governors to power with a mandate to push for greater regulation, reflecting opposition that increasingly cuts across party lines. For developers, this means that vague promises of jobs, investment, and economic growth through local PR firms are no longer enough. Tangible local benefits, lower energy costs and meaningful community involvement are increasingly becoming prerequisites for securing political support and getting projects approved.
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