Democrats’ historic victory in this week’s midterm elections could also have a dramatic effect on the tech industry. In dozens of local ballot measures, voters rejected data centers. And even when they weren’t voting on the issue directly, they were electing politicians — like Texas’ new governor-elect Gina Hinojosa — who campaigned on the promise of restricting data centers.
On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I discussed what the midterms mean for the tech industry. Sean kicked it off by noting that Elon Musk “seems to have basically nothing out of donating half a billion dollars” to Republicans, while his companies are now headquartered “in a state that has, remarkably, turned about as blue as it could possibly turn.” And Kirsten said that while data centers probably weren’t the main cause of the “blue wave,” they’ve become an “an increasingly grassroots issue, in part because of how hyperscalers and companies have gone about” getting their projects approved. And now, “we’re already seeing companies like OpenAI all of a sudden go, ‘Actually, we can change our policies.’” Keep reading for a preview of our conversation, edited for length and clarity.
Sean O’Kane: First off, let’s talk about the fact that one of the biggest data center builders was also the largest donor to the Republican Party. Elon Musk seems to have gotten basically nothing out of donating half a billion dollars — maybe even more, by the time we see the final count — and in fact is now sitting there with all of his businesses in a state that has, remarkably, turned about as blue as it could possibly turn for the first time in a very long time, if ever. That, I think, is the biggest thing hanging above a lot of this discussion.
But, there were also a bunch of ballot measures up around the country that would have paved the way for data centers to get built faster. Almost all of them got shot down, or voted against. [Actually, many of the ballot measures would have imposed restrictions or moratoriums on data centers, and almost all of those measures passed.] With [Democrats] in power, there is a consensus view, at least in the tech world, that this is going to mean we have a lot of roadblocks ahead for data centers, especially in places like Texas, where [you have] folks like the governor-elect [Gina] Hinojosa, who has spoken pretty openly about this being a campaign promise and something that she wants to focus on once she takes power, now that she’s beaten Greg Abbott. It’s the thing that I think the tech world is maybe a little too focused on.
I’m curious what you guys think about that. Anthony Ha: I don’t necessarily think that they’re too focused on it, but I understand why it would feel a little bit disproportionate — the data center ballot measures, certainly there were a number of them, but it wasn’t something that was on the ballot everywhere. And in different races, the dynamic might have been a bit different, but there was this undercurrent and sense that it seems to be an issue that reaches across the country, that is bipartisan in a lot of ways, but that the Democrats seem to have been more effective at harnessing that energy.
And of course, there’s all kinds of reasons why the Democrats did so well on Tuesday, but it does seem like anti-AI and especially anti-data center sentiment was a big part of it. That seems like a pretty potent political force. The next two years, [and] potentially beyond that, are going to be more difficult for tech companies in general, and hyperscalers, data center companies in particular.
Extract — continue reading at the source.
