An unpopular war in Iran. Rising prices for gas and groceries. Anger over data centers. These three issues combined to propel the Democrats to a historic midterm victory, raising the prospect that the new Congress will pursue data center moratoriums and AI safety regulation.
Public pressure for action is mounting. According to exit polling, 56% of voters stated that AI and data centers represented a “crucial or major factor” in their ballot decision. Data centers are blamed for rising electricity bills. Democrats weaponized the issue, spending more than $100 million on ads framing Republicans as friends of data centers. They even sent personalized leaflets to Texas voters near a proposed data center site, warning that Republican Senate candidate Ken Paxton would give the project a green light. Paxton lost.
High-profile Democratic winners, such as Texas Governor-elect Gina Hinojosa, won on explicit promises to enact temporary bans or strict freezes on new data center permits. In Ohio, Governor-elect Amy Acton’s closing message was a promise to make data centers “pay their fair share.” Almost 40 referendums restricting data centers passed in 10 states. Only one in North Dakota failed. On election night, Democratic Senator Bernie Sanders immediately called for a “national data center moratorium now.”
But Democrats will be wary of blowing up the AI infrastructure boom that powers the US economy. They will not want to fall behind China, which is sure to continue its compute buildout. And some analysts caution that they should avoid overestimating data center backlash.
Moderate Democrats won in Republican strongholds such as South Carolina and Kansas, and the Chamber of Progress, a center-left tech industry policy coalition, calculated that the new House Democratic majority “includes a strong bloc of innovation champions.” Democratic governors who did not support data center bans actually won at higher rates than those that did, added Adam Kovacevic, the Chamber’s founder and CEO. He pointed to a poll that showed AI and data centers ranked 19th among voters’ top issues, far below the economy and immigration. Even in Ohio, where 8% of ads were about data centers, only 3% of voters said data centers mattered most to their votes.
“Temporary data center bans just kick the can on the hard work of crafting policies to make sure they are built right and benefit communities,” Kovacevic says. “We have to show that we can make technology work for all Americans. That means neither a return to tech’s Obama-era honeymoon nor a continuation of the Biden-era divorce, but something in between.”
Data center policy will be set at the state level in the absence of a national permitting framework. Expect stricter water and power rules, and an end to tax breaks. Texas and Ohio will be key to the future direction of infrastructure buildout. Data center investment in Texas reached $66 billion in 2026, fueled by a generous 6.25% state sales and use tax break. In Ohio, SoftBank Group and SB Energy’s Portsmouth Campus, funded by NVIDIA, plans to generate 10 gigawatts of power, which would make it the world’s largest data center.
Moratoriums could prove costly. It takes two to three years to bring new data centers online. As Google CEO Sundar Pichai puts it, “The compute we have today is a function of decisions I made in 2024.” Project delays in 2027 could mean a shortage of compute in 2029.
This reality will force Democrats to strike a balance. They look certain to support measures to require tech companies to pay for much of the necessary upgrade to America’s outdated energy grid. State-level commissions could institute requirements that would provide clarity for industry and communities.
One open question is whether bipartisan cooperation is possible. In September, before the midterm vote, the House passed the bipartisan Ratepayer Protection Act by a 417–3 vote. The Act would shield ratepayers from electricity price hikes by requiring large data centers to cover 100% of incremental costs for new power generation and infrastructure upgrades caused by companies’ buildout. The bill failed in the Senate, but it is likely to be reintroduced by republicans in the 120th Congress.
But the bill does not impose any binding requirements for state regulators. The new Democratic Congress looks set to propose stricter rules — a move that could run up against President Donald Trump’s veto powers. Even after his midterm loss, President Trump has said that “winning [the AI race] is very important,” signaling opposition to stricter guidelines.
Another unanswered question is how much weight newly elected Democratic officials will give to AI competition with China. Beijing does not face the same friction for data center construction as the US does.
Ultimately, the newly empowered Democrats will have to walk a thin, high-stakes tightrope. While progressive lawmakers and local activists will push hard for strict moratoriums, the reality of global competition with China and AI’s role in the economy will force a compromise. Get ready for new regulation forcing tech giants to subsidize the AI buildout. But lawmakers will be careful to make sure that the tech boom can continue without turning off the lights.
Jack Galloway is a Program Assistant with the Tech Policy Program at the Center for European Policy Analysis (CEPA).
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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