Data center ad spending hits $380 million

Campaigns spent more than $380 million on television ads mentioning data centers in the recent midterm elections. AdImpact data shows Democratic spending in this category outpaced Republican spending by a ratio of more than three to one. This financial push coincided with a shift in state leadership that threatens to tighten oversight of artificial intelligence infrastructure.

Democrats captured control of Congress and won governorships in Texas, Ohio, Georgia, Nevada, and Iowa. They also secured full control of state governments in Wisconsin, Minnesota, Pennsylvania, Nevada, and Michigan. These victories allow new state leaders to impose regulations even if federal action remains blocked. Data Center Watch, a project of AI security consultancy 10a Labs, noted that 32 of the 34 winning gubernatorial candidates favored stronger regulation or restrictions. Twelve of those candidates supported bans or moratoriums.

Wisconsin Governor-elect David Crowley reversed his campaign stance to support a moratorium and the elimination of a state sales tax exemption for data center businesses. He told the Associated Press that proposals include fuller disclosure of water and energy use and requiring community support for projects. In Texas, Governor-elect Gina Hinojosa defeated incumbent Greg Abbott, who had supported data centers. Hinojosa stated she would deny permits to projects that do not benefit Texans or where residents lack a voice. Clayton Tucker, the first Democrat elected Texas agriculture commissioner since 1986, credited his victory to opposition from ranchers worried about shrinking water supplies.

The industry is adjusting to the political pressure. OpenAI released a framework on Thursday outlining commitments to host communities and called for rules from policymakers at all levels. Dan Diorio of the Data Center Coalition said developers must build public trust while warning that moratoriums could cost communities tax revenue. He noted that data centers encourage investment in domestic manufacturing.

Market concerns about construction pace emerged alongside the political shifts. The Nasdaq index fell to 11% below its record high on Thursday as rising borrowing costs fueled fears of a slowdown. Morgan Stanley analysts said the Democratic victories increased expectations for restrictions that could divide states by their openness to development. They identified Hinojosa’s win and the election of Ohio Governor Amy Acton as key factors that could delay projects.

Local voting results showed strong resistance to new facilities. Redbud Consulting tracked 47 referendums across 44 municipalities in 12 states and found that restrictions passed in 44 of the 45 counted contests. An AP Voter Poll found that roughly three-quarters of voters nationally opposed a new data center in their community. This opposition spanned both Republican and Democratic states. About one-quarter of voters described AI data centers as crucial to their choice, a lower figure than those who prioritized government corruption or living costs.