Data Center Backlash Threatens AI Buildout in Midterms

Voters in multiple states are pushing back against multibillion-dollar data center projects that power the AI boom, forcing candidates from both parties to reverse course on incentives they once championed. The shift threatens to slow U.S. efforts to expand computing capacity at a time when tech firms are racing to meet surging demand for AI infrastructure.

Projects already under construction in Ohio, Texas, Pennsylvania, Wisconsin, Wyoming and Michigan now face new political headwinds. In Ohio, former Sen. Sherrod Brown has spent millions on ads tying Republican Sen. Jon Husted to data centers. In Texas, Gov. Greg Abbott moved to limit rural projects and remove tax breaks after Democrat Gina Hinojosa labeled the state the "wild west of data centers." Pennsylvania Gov. Josh Shapiro added new guardrails this week following criticism from Republican challenger Stacy Garrity.

The pattern extends to other states. Wisconsin GOP nominee Tom Tiffany is running ads against his Democratic opponent on the issue. In Wyoming, Republican Chuck Gray won a House primary after promising to stop data centers and calling for a federal ban. Michigan Democratic Senate nominee Abdul El-Sayed has called for state and federal moratoriums.

Industry and Republican operatives say the backlash caught them off guard. One GOP source criticized groups that raised money from tech firms but failed to prepare candidates for the attacks. New York Gov. Kathy Hochul, who imposed the first statewide moratorium on hyperscale centers, called Senate efforts to coach companies on messaging "tone deaf."

The White House and major firms responded earlier this year with a ratepayer-protection pledge. Google, Microsoft, Meta, Oracle, xAI, OpenAI and Amazon agreed to cover power generation and grid upgrades rather than pass costs to local customers. President Trump has described data centers as central to AI leadership and said communities should welcome the jobs and investment, while acknowledging they "could use a little public relations help."

The central tension remains unresolved: whether local opposition will translate into lasting restrictions or whether companies can address concerns over power, water and taxes fast enough to maintain momentum.