Broad victories for the Democratic party in the US midterms have triggered a new wave of local opposition to the construction of data centers, potentially stalling thousands of megawatts of planned capacity. Roughly half of all proposed AI data center additions now face stricter reviews, with particular risk to builds in Texas and Ohio where residents are demanding guarantees on electricity prices and water supplies. The political shift may lead to a shortfall of 10 to 15 GW in the 2027 capacity pipeline, which is a significant hit to the 43 GW consensus forecast for next year and would have otherwise exceeded the total 38 GW of compute currently online in the US.
Hyperscalers are already adjusting their strategies to navigate the new regulatory environment. Meta President Dina Powell McCormick said that while new construction is becoming harder, the company is more optimistic about expanding its existing facilities, though she noted that many firms are now considering building outside the US. To mitigate local backlash, OpenAI has committed to ending the use of nondisclosure agreements in data center deals and ensuring local residents do not bear the cost of the projects’ electricity. Arm CEO Rene Haas added that global demand for AI capacity is high enough that other nations are prepared to absorb the expansion if the US slows its build-out.