Trump's midterm drubbing demonstrates the power of data-centre opponents
QQQ•Democrats who campaigned partly on data-centre moratoriums won gubernatorial races in Texas and Georgia, raising investor concerns about tougher regulation and a possible slowdown in the AI boom. AI and chip stocks fell in Asia on Wednesday, alongside bond yields.
1. Democratic gains
Democrats Gina Hinojosa and Keisha Lance Bottoms won gubernatorial races in Texas and Georgia, respectively, after campaigning in part on moratoriums on data-centre development. The results give political weight to opposition to data centres, which critics say consume water and electricity and can raise utility bills.
2. Investors weigh regulation
Investors said the election results could lead to tougher regulation and complicate financing and returns on data-centre projects. Aidan Yao of the Amundi Investment Institute said the results looked more like a referendum on AI than on Donald Trump, adding that restrictions could make the outlook for the U.S. economy, inflation and monetary policy uncertain.
3. AI shares fall
Chip and AI companies including TSMC, Samsung Electronics, SK Hynix and Kioxia fell in Asia on Wednesday, along with bond yields. Some analysts said slower U.S. data-centre construction would not necessarily mean weaker demand for AI or computing power; others viewed the Nasdaq’s roughly 8% decline over the past month as a buying opportunity.
