US midterms: Trump’s midterm drubbing demonstrates the power of data-centre opponents
HONG KONG –
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drubbing → demonstrate → opponents
Opponents of data centres were among the biggest winners of the Democrats’ landslide wins in the US midterm elections, pointing to a shifting public mood on AI and, investors said, a possible slowdown of the boom that has propelled US economic growth and stock markets.
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that → point → growth
The size and breadth of the Democratic wave were still coming into focus.
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size → come → focus
But in gubernatorial races in Texas and Georgia, Democrats who campaigned in part on a moratorium on data centre development won offices that the party had not held for decades.
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party → campaign → decades
Their victories hand political heft to the backlash against the projects, which are at the heart of the AI boom but are loud, thirsty for water, hungry for electricity and increasingly unpopular with their neighbours, investors said.
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investors → hand → neighbours
Investors say the results are likely to usher in tougher regulation and could ripple across financial markets where AI stocks were falling on Nov 4; big bets have already started to wobble due to concerns about spending and overcapacity.
uncertain
bets → say → spending
“In our view, the significance of these midterm elections is more like a referendum on AI than a referendum on (Donald) Trump,” said Aidan Yao, a senior investment strategist at the Amundi Investment Institute, the research arm of Europe’s largest asset manager.
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Yao → say → manager
“If the AI theme is subject to some restrictions, then the US economy, US inflation and US monetary policy all become very, very uncertain.”
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economy → become → restrictions
The world’s largest AI company is preparing to begin formally marketing shares to prospective investors next week.
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company → prepare → investors
An amended regulatory filing on Nov 2 showed Anthropic’s net loss narrowed in the third quarter, as revenue surged 47% from a quarter earlier to US$16.96 billion (S$21.6 billion), though the pace of growth slowed.
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pace → amend → growth
The most stunning ballot box repudiation was in Texas, which GLJ Research has estimated accounts for about a quarter of US data-centre capacity that is due to come online by 2030.
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that → estimate → 2030
Democrat Gina Hinojosa ousted Greg Abbott as governor in an upset that ended three decades of Republican hold on the office, while fellow party member James Talarico became the senator-elect.
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Talarico → oust → office
A conservative, oil-rich state, Texas has worked for years to reinvent itself as a tech hub, attracting companies like SpaceX and entrepreneurs like Elon Musk, who donated more than US$150 million to the Republican campaign.
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who → work → campaign
But even Republicans turned against data centres, which opponents say drive up utility bills, pollute the night sky with lights and do not create sufficient jobs or taxes to justify the incentives that states pay.
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states → turn → that
“Data centres in space looking pretty appealing right now,” Musk said on social media after the election.
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Musk → look → election
“Guess my election-interfering space lasers didn’t work this time.”
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lasers → guess → ?
In Georgia, where commercial real estate services and investment firm CBRE says Atlanta is the most active data-centre construction market in the country, Democrat Keisha Lance Bottoms won the gubernatorial contest, ending more than two decades of Republican control.
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Bottoms → say → control
The AI trade
AI has been a dominant theme in 2026 in the financial markets, driving stocks higher due to bets on chip demand while pushing up bond yields, as the data centre construction boom boosts economic growth.
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boom → drive → growth
Chip and AI firms like TSMC, Samsung Electronics, SK Hynix and Kioxia fell in Asia – along with bond yields – on Nov 4.
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firms → fall → Nov
“The Democrats will likely push for greater regulation,” said Nick Ferres, chief investment officer of Vantage Point Asset Management, a fund manager in Singapore.
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Ferres → push → Singapore
Both have likely become more challenging now.”
Shares in US data centre operators Applied Digital, Terawulf, Core Scientific and Iren fell in premarket trading, with losses ranging from 0.16% to 2.9%.
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Shares → become → %
Neocloud company Nebius rose nearly 2%, while rival Coreweave dipped 0.32%.
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Coreweave → rise → ?
To be sure, many analysts said a slowdown in the building of data centres in the US did not necessarily herald a change in demand for AI or computing power, and some view a roughly 8% drawdown in the Nasdaq over the past month as an opportunity to buy.
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some → say → opportunity
Still, Ilan Benhamou on J.P. Morgan’s equity sales desk in New York called the Texas race “the only thing that matters” in a pre-election note to clients, and investors are taking it as a wake-up call.
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investors → call → call
“Companies do have to have the social licence to operate, and I think the current AI providers really have a PR crisis right now on their hands,” said Katie Koch, chief executive of asset manager TCW, at a Hong Kong financial summit.
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Koch → have → summit
“They need to define what the social utility is going to be of AI and data centres to Americans, and so far they’ve been failing to do that.”
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they → need → that
The Aporia
