How the US Midterm Elections Could Affect Data Center Construction: Texas, Ohio, Michigan, and Georgia Become Key Battlegrounds

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How will the midterm elections affect the fate of U.S. data centers? Read this to understand: These four states have become the "decisive battlegrounds"!

Cailianshe, Xiaoxiang, Editor: Lin Qi, 2026-10-27 10:54

① Affected by the surge in water and power resource consumption and disputes over environmental protection and taxes, a wave of resistance against AI infrastructure is currently spreading across many parts of the United States; ② Since the beginning of this year, amid strong opposition from local residents, multiple data center projects across the United States with a total value of up to 100 billion dollars have been forced to delay or stall. As Election Day approaches, this issue has completely evolved into a core point of political confrontation.

Cailianshe, October 27 (Editor: Xiaoxiang) — Affected by the surge in water and power resource consumption and disputes over environmental protection and taxes, a wave of resistance against AI infrastructure is currently spreading across many parts of the United States. Since the beginning of this year, amid strong opposition from local residents, multiple data center projects across the United States with a total value of up to 100 billion dollars have been forced to delay or stall. As Election Day approaches, this issue has completely evolved into a core point of political confrontation.

Historically, during the U.S. midterm election season, Democrats and Republicans not only contest a large number of seats in the U.S. Senate and House of Representatives, but multiple U.S. states also elect governors, state legislators and some local officials. According to statistics, the impact of this election will extend to more than 40 local ballot initiatives, 36 gubernatorial elections and numerous mayoral and county-level races, all of which may intensify restrictions on data center construction.

U.S. President Trump has recently publicly called on the industry to ensure that relevant facilities economically benefit local communities and do not drive up residents' electricity prices.

At the local level, "construction bans" have been implemented one after another. Oregon recently became the latest state to halt approvals of new projects, a move that even prompted one city in the state to declare a state of emergency out of concern about damage to the local economy.

Previously, Nashville, Tennessee, also issued a moratorium this summer, freezing all approvals of new projects until December this year, directly forcing developer Metrobloks, which had originally finalized plans to build a plant there, to withdraw from the project.

Metrobloks CEO Ernest Popescu, a former executive at Amazon and Meta, acknowledged that the moratoriums appearing frequently across the country have left the investment community jittery. "The impact of this wave of resistance is extremely far-reaching."

The following are four states in the data center sector that will be closely watched on Election Day:

Texas

Many in the industry are nervously watching the Texas governor's race. Democratic candidate Gina Hinojosa has promised to ban approvals of new projects until the state legislature passes a bill protecting communities from the impact of data centers. She believes that the recent move by incumbent Republican Governor Greg Abbott to pause approvals of new projects is far from enough to eliminate concerns about the electricity and water consumption of about 200 planned facilities in the state.

The latest polls show that the race between Hinojosa and Abbott is in a dead heat, which worries developers — because Texas has the second-largest number of data centers in the United States and has long been regarded as a developer-friendly, pro-business conservative stronghold.

Matthew Aks, a senior strategist at investment bank Evercore ISI, said that if Hinojosa wins, "that in itself would be an event of major economic significance, and the signal it sends will go far beyond that."

Data centers are also a key factor in the closely contested Senate race between Democratic State Representative James Talarico and Republican State Attorney General Ken Paxton.

Talarico accused Paxton of having "sold out Texas" to the data center industry by accepting campaign donations from the industry while state leaders approved tax exemptions for developers. Paxton said he supports the restrictions imposed on the industry by Governor Abbott and wants to ensure that state residents do not have to foot the bill for these facilities.

Ohio

There are more than 20 local ballot initiatives on data center restrictions across Ohio, adding uncertainty to this far-reaching governor's race — both candidates have promised to make the approval process stricter.

Democratic gubernatorial candidate Amy Acton has called for banning new projects unless they meet specific standards — including bearing all costs and engaging in public consultation with the communities where the projects are located. Republican candidate Vivek Ramaswamy previously supported data centers, but said in August that he would also pause approvals until a bill is passed ensuring that these facilities provide free electricity to local residents and pay property taxes in full. His plan was proposed after months of opposition to data centers in the state.

State and local elections are crucial to developers because these leaders are usually responsible for approving projects; while congressional midterm elections are used to gauge the overall direction of public opinion and the possibility of nationwide restrictions.

In the race for a federal Senate seat, Democratic Senate candidate Sherrod Brown attacked incumbent Republican Senator Jon Husted as "a spokesman for data centers," citing his past support for such facilities and criticized tax breaks enjoyed by tech companies and projects that pass costs on to local residents. Brown called for ending tax breaks, increasing transparency and strengthening local control over approvals.

Husted, who served as the state's lieutenant governor during the period when data centers flocked to the state, said he has always agreed that tech companies should bear their own responsibility. A bill he previously introduced in Congress required developers to commit to minimizing their impact on communities, but it was recently rejected by Democrats as insufficiently strong.

Michigan

Both candidates for governor of Michigan are now calling for restrictions on data centers.

However, the difference is that Republican candidate John James advocates temporarily freezing approvals to devolve more control to local governments, while Democrat Jocelyn Benson wants to establish stricter regulatory guardrails. Recent polls show that Benson is leading in the race to succeed Democratic incumbent Governor Gretchen Whitmer. Previously, Whitmer had drawn criticism from local residents for welcoming data center developers.

In the Senate race, progressive federal Senate candidate Abdul El-Sayed supports a federal proposal jointly introduced by Vermont independent Senator Bernie Sanders and New York Democratic Representative Alexandria Ocasio-Cortez, namely a nationwide ban on new data center construction, and calls for strict regulation of AI models to guard against hacker attacks and other high-risk behaviors.

El-Sayed, currently in a fierce contest with former Republican federal Representative Mike Rogers, has proposed a set of so-called "access conditions" that allow data centers to proceed, which explicitly require projects to bring tangible community benefits.

Georgia

In recent years, thanks to tax incentive policies and abundant power resources, developers have flocked to Georgia.

In the race to succeed Republican Governor Brian Kemp, Democratic candidate Keisha Lance Bottoms advocates putting the brakes on this AI construction boom in order to comprehensively review data centers' consumption of local water and power resources and the tax incentives they enjoy.

In this close race, her opponent—Republican billionaire businessman Rick Jackson—defended his decision to invest in Texas data centers and touted the benefits of these projects. Jackson said that after the state government sets a clear regulatory framework, local officials should decide whether projects proceed.

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Cailian Press statement: The content of this article is for reference only and does not constitute investment advice. Investors who act on it do so at their own risk.

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