The US Democrats’ sweeping victory in the midterm elections could bring tighter regulation for the artificial intelligence (AI) industry, which has benefited from the support of the Trump administration over the past two years. Data centre expansion plans will likely take the first hit, with about half the proposed expansion nationwide potentially facing tougher scrutiny.
Bloomberg reported that Texas and Ohio, previously seen by technology companies as ideal investment destinations, will both have Democratic governors following the midterm elections. With public concern growing over data centres’ heavy water and electricity consumption and their impact on electricity bills, the incoming governors could tighten approvals or even halt new construction.
Texas Governor-elect plans legislation to curb data centre expansion
Democrat Gina Hinojosa, who defeated Republican incumbent Greg Abbott in the Texas gubernatorial election, told CNN in an interview on Thursday (5 November) that her incoming administration would legislate to protect residents from the impact of data centre development.
Abbott had already suspended approvals and grid connections for some data centre projects pending reviews. During her campaign, Hinojosa advocated a stricter moratorium on development and ensuring that local residents have a say in the decisions.
Billionaire Elon Musk’s space exploration company SpaceX and electric vehicle maker Tesla are both headquartered in Texas, where he also plans to develop chipmaking operations. He backed Greg Abbott’s re-election bid and disclosed that he had spent US$158 million (about S$200 million) supporting Republican US Senate candidate Ken Paxton in Texas. Paxton ultimately lost.
After the election results were announced, Musk wrote on his social media platform X: “Data centers in space looking pretty appealing right now.”
In response, Hinojosa said Texas could still maintain a good working relationship with Musk and his companies, but they must abide by the incoming administration’s rules and not come at the expense of Texas residents’ interests.
An NBC exit poll found that 56% of voters considered AI and data centre issues a “crucial or major factor” when voting for members of Congress.
OpenAI announced a series of commitments on Thursday to try to ease growing public discontent in the US over data centres. These included ensuring that the costs of electricity and related infrastructure for such projects would not be passed on to local residents.
Democratic control of Congress could see Jensen Huang and other tech leaders summoned
When Democrats take control of both houses of Congress on 3 January next year, they will have greater power to summon AI business leaders, demand internal documents and advance legislation on AI safety regulation.
Democratic Senator Elizabeth Warren wrote to Nvidia chief executive Jensen Huang in June this year, inviting him to testify at a hearing on chip sales to China and US export control policy, but he declined.
Warren, who is expected to chair the Senate Banking Committee in the new Congress, could then use the committee’s subpoena powers to compel Huang to testify.
