After the midterms, a bigger clash over data centers could be coming

The November 3 midterm results gave Democrats full control of Congress, setting the stage for what could be one of the most divided U.S. governments this decade, with Republicans in the White House. 

Tuesday’s results suggest that anger over data centers, the large facilities that house the computers powering AI, is becoming a political force. With Democrats now in control of Congress, that could lead to new limits on where data centers can be built and how much say local communities have.

“National security matters,” Smith said, referring to a common argument from data center supporters that the infrastructure is essential for the U.S. to stay ahead in war and in its rivalry with China. “And so do the families in South Memphis breathing exhaust from the gas turbines powering an AI supercomputer.” (She was referring to xAI’s data center in Memphis, Tennessee, which uses gas turbines for power.)

Likely next steps include more construction moratoriums or requiring data centers to pay for their own power grid upgrades instead of passing those costs on to nearby communities. Goldman Sachs, in fact, predicts data center construction delays in states like Georgia and Texas because of Democratic gains.

Democratic control of Congress could also improve the odds for bills like the one Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez introduced earlier this year, though any such bill would also face a possible veto. It proposes a nationwide moratorium on new data centers until Congress adds new guardrails and ensures that the buildout does not raise electricity costs, harm the environment, or proceed without community approval.

There are also bills like the GRID Savings Act, proposed by New Mexico Sen. Martin Heinrich, which would prevent grid infrastructure costs from being passed on to communities during large AI data center buildouts.

“Regardless of federal action, I could imagine that we will see additional movement at the state and local level, given the momentum that’s been building from the ground up,” Woluchem continued, citing governor-elect Gina Hinojosa, who supports a statewide moratorium on data centers, as an example. Both Hinojosa and Gov. Greg Abbott called for some limits, but Hinojosa centered much of her campaign on opposing data centers, a notable choice in Texas, whose electrical grid has proved vulnerable over the past decade.

But the hard part is still to come. Smith, for example, is now expecting a fight, or even more executive orders, to bypass what Congress is now likely to block. “Even among Democrats, a blanket freeze is contested,” she said, referring to some Democrats’ worry that a moratorium could slow AI progress and hurt national security.