US Midterms Deal Setback to Data Center Expansion and Musk's Political Bets
In this week's US midterms, voters in dozens of localities rejected data center measures and elected politicians who campaigned on restricting them, turning project approvals into an increasingly grassroots fight for hyperscalers. Elon Musk appears to have gained little from roughly $500 million in Republican donations, while his companies are headquartered in a state that shifted sharply blue. Companies like OpenAI are already adjusting their policies in response.
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Democrats’ historic victory in this week’s midterm elections could also have a dramatic effect on the tech industry.
In dozens of local ballot measures, voters rejected data centers. And even when they weren’t voting on the issue directly, they were electing politicians — like Texas’ new governor-elect Gina Hinojosa — who campaigned on the promise of restricting data centers.
On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I discussed what the midterms mean for the tech industry. Sean kicked it off by noting that Elon Musk “seems to have basically nothing out of donating half a billion dollars” to Republicans, while his companies are now headquartered “in a state that has, remarkably, turned about as blue as it could possibly turn.”
And Kirsten said that while data centers probably weren’t the main cause of the “blue wave,” they’ve become an “an increasingly grassroots issue, in part because of how hyperscalers and companies have gone about” getting their projects approved. And now, “we’re already seeing companies like OpenAI all of a sudden go, ‘Actually, we can change our policies.’”