Data center champions lose badly as ballot initiatives target AI infrastructure
Network World ·
Republicans weren’t the only group taking it on the chin in midterm elections. Data centers and their supporters got positively annihilated at elections across the country. These concerns are reflected in public opinion. The data center development opponents won and won big. A University of Massachusetts Amherst poll cited by Stateline found that just 11% of Americans supported building an AI data center in their community. It took a day for the dust to settle but once the results of data center ballots became evident, Wall Street bowed and tech stocks took the hit. More than $2 trillion in wealth was wiped out on November 5. Voters in at least 43 of 44 jurisdictions across the country passed bans or restrictions on data centers Tuesday. The one exception was a tiny town in North Dakota that voted down a restriction on new construction. Other than that, it was a case of widespread public revolt against the facilities and adding to the growing pushback on the ambitions of the artificial intelligence industry. Data center construction also suffered setbacks, and Democratic candidates promising to curb the rapid growth of AI data center won governors’ races. The most glaring example was in Texas, where Democratic candidate Gina Hinojosa made slowing the growth of data center construction the centerpiece of her campaign. That led to Hinojosa becoming the first Democrat governor in Texas since Ann Richards in 1994. In other locales, data centers lost badly. In Joliet Township, Illinois, a restriction on new data centers passed with 80% of the vote. In Hubbard, Ohio, more than three-quarters of voters gave data centers a thumbs down. Ohio emerged as the main battleground, accounting for 21 of the 50 measures tracked by Ballotpedia . The votes covered several different approaches to controlling development: outright bans, power-consumption thresholds, temporary permitting moratoriums, mandatory public votes and requirements for developers seeking tax incentives. California and Florida saw outright bans. California voters in the cities of Alhambra and Monterey Park, where voters approved a measure prohibiting data centers. In Florida, Edgewater voters approved a charter amendment opposing new data centers and expansions of existing facilities. “The local moratoriums we had seen were mostly short, and projects that were already permitted could keep moving,” said Alex Cordovil, research director with Dell’Oro Group . “So we expected limited impact on the overall build-out. What we did expect was a lot of jurisdiction shopping, with developers seeking out the authorities most welcoming to data centers.” He added that he expected more legal fights between federal, state and local governments, as people from across the political spectrum came to hold different levels of government and pulled policy in different directions. The data center issue had three significant issues central to the debate: 1. Electricity demand and utility bills. AI data centers can consume electricity on a scale comparable to that of large industrial facilities. There have been numerous instances of individual electric bills skyrocketing after a data center opened nearby. Residents increasingly want assurances that utilities will recover these costs from the data center customers responsible for them, rather than passing them to households and smaller businesses. Many local ballot initiatives were around restricting power hikes. 2. Water consumption and environmental impact. Despite drought conditions across the country, data centers are consuming unheard of amounts of water. One Google data center in 2025 consumed 10 billion gallons of water . Communities have raised concerns about local water supplies, noise from cooling equipment and generators, emissions, and the conversion of farmland or open space. 3. Economic benefits versus public costs. Developers often promise construction spending, jobs, tax revenue and investment in local infrastructure. Critics counter that facilities typically employ fewer permanent workers than many other developments of comparable capital value and that tax concessions or public infrastructure commitments can reduce the net benefit to residents. The balance varies by project, which makes transparency around contracts and incentives particularly important. The ballot results do not mean the United States is about to stop building data centers. Many of the ballot initiatives were simply saying slow down and do a careful evaluation of the surroundings. They do, however, introduce another layer of risk into an industry already dealing with grid interconnection delays, rising construction costs and shortages of some infrastructure components. The near-term effect is likely to be uncertain, and the stock market hates uncertainty. The biggest risks fall on projects whose sites, zoning approvals or financing arrangements are directly affected. Established data centers and projects that have already secured necessary approvals are not automatically subject to new restrictions. “Opposing data centers is easy from the outside. Governing is harder,” said Cordovil. “They will be accountable to the communities that have been asking to be heard on noise, utility bills and the other issues data centers often take the blame for. But they will also own the jobs and investment these projects bring, and by many estimates data centers account for a sizeable share of recent US GDP growth.” Alan Howard, senior analyst with Omdia , thinks the anti-data center crowd needs to slow things down itself. “As anti-data center activists accelerated the rhetoric exponentially over the last year, the voting public has been overwhelmed with negative perceptions on data centers and the idea that AI poses many risks,” he said. And it’s entirely likely that if data center opponents win, data center developers will simply go elsewhere. “It is very true that there are many places that data centers should not be built, and they do need to pay their fair share, so reasonable restrictions are fair. What is misguided is believing the solution is moratoriums,” said Howard.