Election results put data center plans in focus

Democrats won several key seats in the US midterm elections, prompting business leaders, technology executives and investors to assess what the results could mean for Congress and local governments. Data center approvals, public support for AI infrastructure and the role of campaign spending in policymaking are among the issues drawing attention. In California, opponents of a proposed one-time 5% wealth tax on residents with net worths above $1 billion remained well ahead as votes were counted, a result watched closely by wealthy residents and investors.

Reid Hoffman says voters want economic results and credible leadership

LinkedIn co-founder and prominent Democratic donor Reid Hoffman said on election night that voters want an economy capable of competing globally while improving life at home. They also want leaders who represent them, he said. Democrats performed better than expected in states including Texas, Ohio, Kentucky, Iowa, South Carolina and Indiana, Hoffman added, warning against underestimating voters in any region.

Hoffman spent tens of millions of dollars supporting Democrats during this election cycle and contributed millions to Kamala Harris’s 2024 campaign. He has previously criticized Democrats for alienating Silicon Valley, arguing that the shift has contributed to some technology figures changing their political allegiances.

Musk touts space data centers as AMD chief stresses local support

Tesla and SpaceX CEO Elon Musk posted on X after the election that “space data centers are looking pretty compelling now.” He later joked that “the space lasers for election interference didn’t work this time.” Musk spent $446 million on this midterm cycle, making him the largest individual donor; most of the money went to Republican candidates in Texas.

Democrat James Talarico won the Texas Senate race, despite Republican opponent Ken Paxton receiving more than $150 million in support from Musk. Democrat Gina Hinojosa also won the Texas governor’s race, marking the first Democratic victory in a statewide election there in decades. The results have put Texas data center permitting policies on the radar of technology companies.

AMD CEO Lisa Su said the technology industry needs to do a better job explaining AI’s benefits to local communities. Companies should make clear what communities hosting data centers stand to gain and ensure that the benefits of AI reach more people, she said. Community support and local permits are key factors in whether data center projects can move forward.

Uber CEO says inflation is weighing on consumers

Uber CEO Dara Khosrowshahi described the results in an interview the day after the election as a signal that voters want change, pointing to persistent inflation’s effects on consumers. Businesses, politicians and leaders in Washington all need to respond to the message voters sent, he said.

Khosrowshahi publicly criticized Donald Trump during his first presidential term, but donated $1 million to Trump’s inaugural fund after the 2024 election. His comments on inflation underscore how the cost of living is shaping not only political debate but also consumer spending and the business environment.

Investors disagree on the pace of data center construction

Keith Rabois, managing partner at Khosla Ventures, wrote on X that the results gave him another reason to move to Miami. Republican incumbent Ashley Moody won Florida’s Senate race. Two of Miami’s three main congressional districts showed a clear shift toward Democrats, while the district that includes downtown remained close, with the Republican incumbent still in position to narrowly win as counting neared completion.

Brad Gerstner, CEO of Altimeter Capital, said fears that Democratic wins would obstruct data center construction were overstated, though he allowed that project development could slow. He cited the possibility that Hinojosa could pause new data center construction, creating a challenge for the expansion of AI infrastructure. Gerstner also said Republicans and the AI industry had not done a good job explaining AI’s value as voters focused on the cost of living. He designed the Trump Accounts investment program for US children, which launched in July.

During the Texas governor’s race, SemiAnalysis CEO Dylan Patel said he was bullish on space-based data centers. Dan Ives, a veteran Wall Street analyst and longtime AI optimist, said Democratic victories in both chambers of Congress could slow US data center construction. He estimated that about 10% of projects might not proceed. Some investors would welcome a slower buildout, he said, while others would see it as an added risk.

Richard Branson calls for debate on campaign finance

Virgin Group founder Richard Branson said the results showed that money’s influence in politics is not unlimited. He said it was embarrassing to see technology entrepreneurs and hedge fund managers spend billions of dollars backing candidates in the election, and called on the new Congress to discuss campaign finance’s effects on public policy and possible reforms.

From data center permits to public acceptance of AI, business leaders’ reactions suggest the election could shape more than federal policy debates. Local communities’ attitudes toward major infrastructure projects will also matter. Whether projects proceed, and at what pace, will depend on future policy and permitting decisions.