Data center limits move from local ballots to state and national proposals

Democratic election winners and progressive lawmakers are calling for limits on data centers and artificial intelligence development after the 2026 midterms, adding to local restrictions approved by voters.

Texas Gov.-elect Gina Hinojosa has pledged to suspend new data center approvals, while Sen. Bernie Sanders has called for a national moratorium. Pennsylvania Gov. Josh Shapiro signed an executive order in August intended to slow development.

The issue also featured in congressional races. In a CNBC Voter Poll, 56% of voters said AI and data centers were a crucial or major factor in their ballot decisions. Of those voters, 65% said they voted for a Democratic candidate for Congress.

Texas governor-elect pledges approval moratorium

Hinojosa, a Democrat who defeated Republican Gov. Greg Abbott, said in a late-October video on X that she would ban data center approvals until the Texas legislature passed protections for residents.

“This is about one fight. Is this going to be a Texas that is by and for the people, or is this the billionaire’s world and we just live here? Data centers are part of that fight,” she said.

Texas is home to 27% of planned data center capacity, according to Wells Fargo data cited by CNBC. Hinojosa did not directly address data centers in her victory speech, although the issue was important to her campaign, CNBC reported.

Hinojosa later told CNN that Texas needed to stop what it was doing with data centers until protections were in place, according to The Guardian. The newspaper reported that incoming governors in Texas and Georgia had called for data center moratoriums.

White House National Economic Council Director Kevin Hassett told CNBC that local ballot initiatives largely would not affect existing projects and expressed confidence that construction would continue, The Guardian reported. His assessment concerned the ballot measures rather than Hinojosa’s proposed halt.

Voters approve local restrictions as Democrats cite community control

Voters passed dozens of local ballot measures intended to restrict data center projects, according to The Guardian. Shapiro’s executive order in Pennsylvania preceded the election. In his victory speech, the governor said local communities, rather than big technology companies, should have the final say over residents’ futures.

Democrats who flipped Senate races also addressed data centers in their campaigns and victory speeches. South Carolina Democrat Annie Andrews, who defeated Sen. Darline Graham, launched a campaign website that labeled her opponent “data center Darline.”

In her victory speech, Andrews said voters chose a South Carolina “where decisions about communities are made by the people who live in our communities, not the billionaires or data center companies in Washington D.C.”

Ohio Democrat Sherrod Brown, who defeated incumbent Republican Sen. Jon Husted, said in his victory speech, “I do not work for data centers.”

Sanders and Ansari seek national limits

Sanders, a Vermont independent who caucuses with Democrats, cited local referendums when he called on X for a national data center moratorium.

“National data center moratorium now,” he wrote. “Americans don’t want Big Tech oligarchs wrecking the environment, gutting jobs and threatening humanity’s future.”

Rep. Yassamin Ansari, D-Ariz., called for a pause on advanced AI development, regulation of the industry and a ban on artificial superintelligence as early Democratic priorities, according to The Guardian. Rep. Greg Casar, D-Texas, chair of the Congressional Progressive Caucus, amplified her post and wrote, “Yes!”

The Guardian reported that SpaceX has proposed an Arizona data center project spanning more than 700 acres. Elon Musk mocked Ansari’s post, and she responded by forecasting congressional hearings, the newspaper reported.

Chip stocks fall as investors weigh construction risks

Shares tied to the AI buildout declined slightly on Wednesday after the election, with selling intensifying on Thursday as investors worried that Democratic victories could affect data center construction, CNBC reported. Chip stocks led the decline: Nvidia fell 8%, while Advanced Micro Devices dropped more than 14%.

The Guardian also reported that concern about potential regulation helped fuel the AI stock selloff. Meta Platforms President Dina Powell McCormick told The Wall Street Journal that it was “going to be harder” to build data centers after the vote, according to The Guardian.