Dems won and data centers lost in Tuesday’s US midterms

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The biggest news out of Tuesday’s US midterm elections: Democrats won big, seizing control of both houses of Congress and ensuring a bumpy road for President Trump and his allies — including some AI companies and executives — during his final two years in office.

Trouble on the horizon: Even before the election, financial filings from AI companies including Meta were suggesting that a Democratic win could herald the end of Trump’s laissez-faire approach to AI and create business complications, such as new taxes and regulations. Here are details via Bloomberg.

The secondary, but highly consequential news: US voters are fed up with data centers.

As of Wednesday, voters had opted to ban or restrict data center construction in 33 of 40 districts where the issue was on the ballot, according to a tracker managed by the data science firm Redbud Consulting. The “restrict” option was ahead in six other races. Only one voted to allow data center building, the firm found.

Not in my backyard: 56% of midterm voters said they considered AI and data centers to be a major or crucial factor in their vote and 76% said they would oppose the construction of a data center in their community, according to an exit poll conducted by NBC News. (Data center concerns ranked behind other big priorities for voters including government corruption, the war in Iran and affordability.)

Lawmakers who supported data center construction also got trounced at the ballot box. Texas Gov. Greg Abbott, a Republican and a supporter of data center construction who later reversed course and ordered a moratorium on them, was unseated by Democrat Gina Hinojosa, who was firmer in her opposition. Sen. Jon Husted, an Ohio Republican and data center industry champion, lost to Democrat Sherrod Brown, a former senator who promised to hold Big Tech accountable.

Out of this world: Tech bajillionaire and space entrepreneur Elon Musk, whose SpaceX has plans to build orbital data centers on satellites, quipped on X, “Data centers in space looking pretty appealing right now.” Musk, who owns X, spent heavily (specifically, more than anyone else in any election in prior human history) to support pro-tech Republicans in the race, including Abbott.

What’s the takeaway for MENA?

First, everything the major AI companies do will be a little more complicated from now on. That includes deals to supply top-level AI chips to the UAE and Saudi Arabia — deals that might get swept up in Democratic-led congressional investigations as we reported last week.

Unclear outcomes: A tighter leash from the US government might lead some AI companies to be more cautious about big building projects, including those planned for the MENA region. Or, conversely, a tougher building environment in the US could spur more construction abroad in countries where there’s less vocal opposition from citizens.

Watch the public angst: Much of the mounting US opposition to data center construction likely comes down to the simple, obvious stuff — data centers are noisy; they’re eyesores; they suck up electricity and water and stick their neighbors with the bill.

But hostility to data centers also likely reflects a broader animosity to AI, which people fear will steal their jobs and their livelihoods. And animosity toward AI companies and their leaders, who people see making incredible profits from technology that may ultimately harm average working people. (See, for example, Musk’s election spending, which equaled approximately the lifetime earnings of 278 average working Americans.)

That’s an animosity that could spread to MENA and elsewhere if the negative effects of AI turn from speculation to reality, potentially prompting an anti-machine sentiment like we haven’t seen since the Industrial Revolution — back then, the original Luddites broke into factories at night and destroyed the machines that were displacing them. — Joe

Now, let’s get to today’s Lede, which looks at US vs. China competition in the Gulf tech sector.