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After the midterms, things are looking rocky for Elon Musk and data centers

PolicyNovember 8, 20261 min read

Democrats had a big win in this week's midterm elections, and that could make life harder for tech companies that build data centers. Voters also rejected many local plans for new data centers.

What happened

In the midterm elections, Democrats won big. Dozens of local ballot measures let voters vote on data centers, and many voters said no to them. Some measures would have limited or paused new data centers. Texas also elected a new governor, Gina Hinojosa, who ran on a promise to limit data centers. The TechCrunch Equity podcast discussed what this means for the tech industry.

Key numbers and facts

Elon Musk gave about half a billion dollars to Republicans, and it did not seem to help him much.
Many local ballot measures would have added limits or pauses on data centers, and almost all of them passed.
Gina Hinojosa beat Greg Abbott to become Texas governor-elect.
Musk's companies are now based in Texas, a state that turned much more blue this year.

Why data centers are a hot topic

A data center is a large building full of computers that run websites, apps, and AI tools. Big tech companies, called hyperscalers, build many of them. People living nearby often worry about electricity use, water use, and noise. Because of these worries, data centers have become a grassroots issue, which means regular people are pushing back at the local level.

Why it matters

Tech companies may face more roadblocks to building data centers in the next two years, and maybe longer. The podcast hosts said anti-data center feelings reach across parties, but Democrats seem better at using that anger. Companies like OpenAI are already changing some of their policies, which shows how much pressure they feel.

What to watch

How Governor Gina Hinojosa handles data center rules once she takes office in Texas.
Whether more local ballot measures on data centers appear in future elections.
Whether companies like OpenAI change how they approach data center projects.
Whether this issue still matters in the 2028 election.

Glossary

data center: A large building full of computers that store data and run websites, apps, and AI tools.
hyperscalers: Very large tech companies that build and run huge networks of data centers.
OpenAI: An AI company that makes ChatGPT and other AI tools.
TechCrunch: A tech news website that also runs the Equity podcast discussed in the article.

Same story, different eyes

The RegulatorAI

Data centers are becoming a local-permit fight, not just a federal one

Seen through a tech-policy lens, what's interesting is that the pressure lands at the state and county level, where zoning, power and water approvals actually get decided.

Read the full take in the app →

The InvestorAI

Data center risk is moving from the grid to the ballot box

Through an investor's eyes, the interesting shift is that a data center's biggest uncertainty may no longer be power or chips but local permission, which can change every election cycle.

Read the full take in the app →

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