Democrats take Congress, putting new data center limits on the table

What the midterms decided about data centers

The November 3 midterm elections gave Democrats control of both the House and Senate, flipping a narrowly divided Congress into unified Democratic leadership. The same voters who delivered that majority also sent an unambiguous message about AI infrastructure: they do not want data centers in their communities.

An NBC exit poll found that nearly 80 percent of voters oppose building data centers in their neighborhoods, and almost 60 percent said data centers were a crucial or major factor in their vote. More than half of respondents believe AI will do more harm than good. Those numbers crossed party lines.

The backlash played out in dozens of local races. According to Data Centers on the Ballot, 33 measures restricting data center development have already passed, with six more leading. Only one measure — an extra review process for industrial projects in Harwood, North Dakota — failed. Voters in Piqua, Ohio recalled their mayor and two council members for supporting a data center project. The mayor of Yukon, Oklahoma was recalled for the same reason.

As we reported in "Data centers lost the 2026 midterms as anti-development candidates swept key races",the scale of the rejection was unprecedented. What changes now is that the fight has a federal dimension.

What Democratic control of Congress means for data center policy

The shift in Washington opens the door for federal legislation that stalled under Republican leadership. The most prominent proposal is the nationwide moratorium on new data center construction introduced by Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez. The bill would pause new projects until Congress establishes guardrails on electricity costs, environmental impact, and community consent.

A second bill with bipartisan potential is the GRID Savings Act, sponsored by New Mexico Senator Martin Heinrich. It would prevent grid infrastructure upgrade costs for large AI data centers from being passed on to residential and small-business ratepayers. With Democrats controlling committee agendas, both bills are likely to receive hearings and floor votes.

"It is clear that money does not buy outcomes," Anshi Bhatt, a tech and policy researcher, told TechCrunch, noting that pro-AI super PACs spent millions in the midterms with limited results. "In modern politics, creating a 'local villain' is one way to build campaign momentum." Data centers became that villain.

The environment is another front. Maia Woluchem, program director at Data & Society, told TechCrunch she expects congressional Democrats to investigate the Trump administration's rollback of energy protections, particularly around gas turbine usage at data centers in Virginia and at xAI's Memphis facility. "Regardless of federal action, I could imagine that we will see additional movement at the state and local level, given the momentum that's been building from the ground up," she said.

The Texas effect: Abbott out, Hinojosa in

Texas was the most visible battleground. Governor Greg Abbott lost his bid for a fourth term to Democrat Gina Hinojosa by more than 700,000 votes. Abbott had made Texas the most data-center-friendly state in the country — more than 300 operating facilities with plans to double that number — and accepted over $9 million in data-center-related campaign donations.

"Texas is the epicenter of AI development," Abbott said in 2025 at a press conference with Google CEO Sundar Pichai. The line became a campaign ad for Hinojosa, who centered her platform on a statewide data center moratorium. She won decisively.

Hinojosa's victory sends a signal to every state considering data center incentives. She is one of several Democratic governors-elect who campaigned against the AI buildout. Morgan Stanley analysts predict that Amy Acton, the Democratic governor-elect of Ohio, will pose a similar risk to the state's planned data center expansion, including a $500 billion OpenAI project backed by Nvidia financing.

The market is already reacting

Investors did not wait for the runoff. Data center stocks slid on Wednesday, while clean-energy shares rallied after the Democratic sweep, Reuters reported. Goldman Sachs predicted construction delays in states like Georgia and Texas because of Democratic gains.

"Data centers in space looking pretty appealing right now," Elon Musk posted on X after midnight on election night, acknowledging the political setback. Musk spent $224 million in Texas alone during the midterms, where his plans to expand xAI's data center footprint now face a hostile state government.

The market moves reflect a recognition that the easy era of data center expansion may be ending. Over 300 local bans have been enacted across the U.S., though only three developments totaling 2.3 gigawatts have been delayed so far. A separate 38 gigawatts are expected online by 2027, and global investment in AI infrastructure is still on track to hit $32 trillion by 2050, according to industry forecasts. But the political headwinds are real and growing.

What happens next

The hard part is still to come. Nadine Smith, president and CEO of Color of Change, told TechCrunch she expects a fight — and possibly more executive orders — to bypass what Congress is now likely to block. "Even among Democrats, a blanket freeze is contested," she said, noting that some Democrats worry a moratorium could slow AI progress and harm national security.

She also expects AI lobbyists to start calling lawmakers. "Democrats ran on making Big Tech pay," Smith said. "Our job is to make sure they remember it once the cameras leave."

For now, the most immediate effects will be at the state and local level. Democratic governors in Texas, Ohio, Michigan, and other states have mandates to slow or stop data center development. Local zoning boards are tightening rules. Utility commissions are scrutinizing rate agreements. The federal conversation will take months, but the ground game is already in motion.

One private equity executive told TechCrunch that people don't necessarily hate data centers — they hate AI, and data centers have become a proxy for their fears about the technology. "It does look like the results are pointing to a real frustration with tech power at minimum," Woluchem said. That frustration now has a majority in both chambers of Congress.