44 of 45 Local Votes Favor Data Center Limits

Voters in 45 local referendums across 12 states voted to restrict new data center construction, with 44 of those ballots passing, according to an analysis by Redbud Consulting. The firm tracked 47 such votes in 44 municipalities, finding that opposition to server farms was strongest in Ohio, where 21 referendums were held, followed by Maine, Illinois, and Kansas.

Statewide races produced leaders who pledged to tighten the screws on the industry. Democrats won governorships in Texas, Ohio, Georgia, Nevada, and Iowa, states identified as data center hot spots. In Wisconsin, Gov.-elect David Crowley, a Democrat, shifted his stance during the campaign to support a moratorium on new projects. He also proposed abolishing the state sales tax exemption for data center operators. Crowley said on Thursday that his administration is currently drafting proposals that would require developers to disclose water and energy usage and ensure community support before projects begin.

Texas Gov.-elect Gina Hinojosa, a Democrat who defeated incumbent Greg Abbott, has vowed to block permits for facilities that do not offer a good deal to residents. Abbott had previously marketed Texas as the center of AI development before attempting to curb the industry late in the race. In Ohio, Gov.-elect Amy Acton, a Democrat, pledged to halt projects that fail to meet specific standards.

The industry responded to the election results with a call for clearer federal and state rules. OpenAI published a framework on Thursday urging policymakers to establish guidelines for responsible investment. Dan Diorio, an official with the Data Center Coalition, warned that new state regulations could have real-world consequences, such as communities losing out on tax revenue. He noted that data centers are currently driving broader economic expansion and investment in domestic manufacturing.

Financial markets reacted quickly to the political shift. The Nasdaq index fell 11% below its all-time high on Thursday. Analysts at Morgan Stanley stated that the election results create greater expectations for data center restrictions. The firm predicted that new state rules could split the country into regions open to new facilities and those that are not. Morgan Stanley identified the election of Hinojosa in Texas as the most important result for the sector. The firm also flagged the victory of Acton in Ohio as creating a high risk for project delays.

Campaign spending reflected the intensity of the issue. AdImpact data shows that political campaigns spent more than $380 million on television ads mentioning data centers. Democrats outspent Republicans on the topic by a ratio of more than 3 to 1. Clayton Tucker, the first Democrat elected as Texas state agriculture commissioner since 1986, said his pledge to fight data center development was critical to his win. Tucker cited concerns from ranchers about dwindling water supplies.

National polling indicates that while voters oppose local construction, it was not a primary driver of their vote. The AP Voter Poll found that about three-quarters of U.S. voters oppose building a new data center in their community. However, only about one-quarter of voters said AI data centers were crucial to their choice for Congress. That share is lower than the percentage citing government corruption or cost of living as highly important issues.

Texas is projected to overtake Northern Virginia as the largest global data center market by 2030, according to a report from JLL. Stephen Sanders, a Republican and co-founder of a data center protest group in Lubbock, said the issue was on the ballot for many Texans. He noted that the state’s drought conditions make concerns over electricity and water threats particularly acute.