Voters reject AI expansion plans

Donald Trump’s rapid expansion of American AI infrastructure faces a sharp deceleration after voters in Tuesday’s elections approved a wave of restrictions on data centers. Redbud Consulting, a polling firm tracking local initiatives, reported that 38 of 44 measures seeking to limit data center growth passed across ten states. These votes included numerous moratoriums and outright bans, while only one measure allowed a specific project to proceed, albeit with new requirements for independent reviews and public hearings in North Dakota.

Analysts indicate these local wins will not halt construction already underway or approved through 2027. The primary impact will be felt by projects scheduled for 2028. Beyond local ballots, voters elected officials in key states who pledged tighter oversight. In Texas, the epicenter of the current AI boom, Democratic challenger Gina Hinojosa defeated the incumbent in the governor’s race. Axios reported that this outcome fundamentally scrambles the mathematical projections for the state’s role in the national buildout.

Texas was expected to account for more than 41 percent of added data center capacity in 2028. Hinojosa has stated she will delay projects as necessary to pass laws addressing impacts on water, electricity, air, and property rights. Bloomberg reported that approximately 13 gigawatts of data center capacity in the state are now exposed to these regulatory shifts. Gordon Johnson of GLJ Research noted in a client memo that Texas projects with existing power, permits, and steel will continue, but those lacking state environmental permits will slip by 12 to 18 months.

Johnson warned that Hinojosa would impose a moratorium until legislation grants communities a voice, protects utility bills, and ends tax incentives for data centers. He added that the duration of this pause remains the critical unknown. Libby Cantrill, head of public policy at PIMCO, offered a similar assessment. She predicted increased friction in the AI buildout, citing longer permit timelines and more concessions developers will need to make to proceed.

Some developers may relocate projects to states like Louisiana or Georgia, or leave the market entirely. The immediate effect is a pause in capital deployment for future phases. The 38 passed measures create a patchwork of local rules that developers must now navigate before breaking ground on new sites. This shift marks a clear departure from the previous period of unimpeded growth in the sector.