Midterm results raise hurdles for data center builders

The election is unlikely to have turned on data centers alone, Kirsten Korosec said, but opposition to projects has become a grassroots issue across party lines. She attributed some of the resistance to companies’ efforts to secure approvals, which she described as secretive, including requiring nondisclosure agreements and withholding details about projects in environmentally sensitive areas facing water scarcity.

Sean O’Kane pointed to Elon Musk’s political donations, saying he appeared to have gained little from giving Republicans half a billion dollars or more. Musk’s companies are now headquartered in Texas, where Democrat Gina Hinojosa defeated Greg Abbott in the governor’s race. O’Kane said Hinojosa had campaigned on restricting data centers.

Korosec said OpenAI’s new compute campus policy blueprint showed that companies could change their practices: the plan calls for ending the use of NDAs and sharing project plans. The hosts also questioned whether the term “compute campus” was an attempt to rebrand data centers, and whether that change in language would matter.

Anthony Ha said the next two years, and potentially the period beyond, could be more difficult for technology companies and hyperscalers. He also cited a shift in Wall Street’s response to heavy spending on data centers and computing capacity. The industry may face both tougher approval processes and less investor enthusiasm, even as companies seek to build more facilities.