Voters Challenge Tech’s Data-Center Power Grab

Local restrictions on data centers passed in 44 of 45 completed referendum elections across 12 states. Technology stocks rebounded Friday after investors sold shares over the prospect of tighter rules. Communities are resisting projects that consume electricity and water, while companies and investors weigh what that resistance could cost their expansion plans.

In Texas, Clayton Tucker said concerns about dwindling water supplies helped carry him to the state agriculture commissioner’s office. “You know, there's an old saying around here that 'whiskey's for drinking and water's for fighting,'” Tucker told the Associated Press. “And that's exactly what happened.”

The market took a hit the previous day. The Nasdaq fell more than 1,400 points and entered correction territory, according to CNBC. Nvidia dropped 9.3%, AMD fell 17.3%, and Micron Technology lost 17.5%. Data-center-focused neocloud companies also took a beating: Nebius dropped 15%, Iren fell 17% and CoreWeave declined 10%.

Communities Push Back

Redbud Consulting tracked 47 referendums in 44 municipalities across 12 states, including 21 in Ohio, eight in Maine, seven in Illinois and four in Kansas. The firm said restrictions passed in 44 of the 45 elections with completed counts. The Associated Press Voter Poll found about three-quarters of U.S. voters opposed a new data center in their community, with majorities against construction in both red and blue states.

The opposition crossed party lines, even when voting did not. CBS News exit polls found most voters who opposed data centers backed Democratic candidates, while most self-identified Republicans also opposed a new center nearby, even as they predominantly voted Republican. The same polls found most voters believed AI would do more harm than good; those voters were more opposed to local data centers.

Projects have already felt the pressure. From January 2024 through May 2026, community opposition blocked, withdrew or stalled at least 46 AI data-center projects across 20 states, representing more than $170 billion in announced investment, according to research by the International Data Center Authority, a think tank. CNBC reported that dozens of local ballot measures in 10 states sought restrictions on construction.

In Wisconsin, Gov.-elect David Crowley shifted his position during the campaign after pressure from his Republican opponent. He initially opposed a moratorium, then said he supported one and wanted to abolish the state sales-tax exemption for data-center operators and developers. Crowley said he was discussing proposals for when he takes office, including disclosures of water and energy use, community support before projects proceed, and protections for ratepayers and taxpayers from project energy costs.

The Cost Lands Locally

The scale of resource demand gives that opposition a material edge. Penn State Dickinson Law professor Hannah Wiseman estimated that one mega data center could consume as much electricity each day as a small or medium-sized city, or about 80,000 houses. The Florida Water & Pollution Control Operators Association said a center could use 1 million to 5 million gallons of water on a very hot day, comparable to a town of 30,000 to 50,000 people.

The association also said newer facilities use more efficient technology, including drawing water from waste supplies. “The industry knows water is a critical issue and is rapidly deploying newer cooling designs to use less water per unit of computing,” it said. “The days of wanton water use are numbered, driven by both environmental and business pressures.”

Midterm results put electoral pressure behind local resistance, but campaign promises aren't the same as rules in force. Data Center Watch, a project of AI security consultancy 10a Labs, said 32 of 34 victorious gubernatorial candidates in races where the Associated Press had called a winner supported stronger regulation or restrictions; 12 supported bans or moratoriums. In Texas, Gov.-elect Gina Hinojosa said she would block a permit if a project wasn't a good deal for Texans or residents hadn't had a say. In Ohio, Gov.-elect Dr. Amy Acton pledged to block projects that failed to meet certain standards.

OpenAI published a framework Thursday outlining new commitments to communities where it develops data centers and called on federal, state and local policymakers to set “clear rules for how the industry builds.” The company said: “Lawmakers should establish rules to advance responsible investment, protect residents, and ensure that the benefits of AI infrastructure are broadly shared.”

Investors Count the Resistance

The prospect of those rules showed up in the market. On Friday, the S&P 500 rose 72 points, or nearly 1%, and the Nasdaq Composite gained 437 points, or 1.8%, while the Dow Jones Industrial Average fell 129 points, or 0.2%. According to CBS News, Nvidia rose 6.6% and Micron Technology gained 9.8% in early trading.

Investors are also reckoning with the money already committed. Goldman Sachs estimated AI-related capital spending across computing, data centers and power could reach about $7.6 trillion from 2026 through 2031. CNBC reported many hyperscalers had turned cash-flow negative while spending hundreds of billions of dollars on AI infrastructure. Bloomberg said technology firms borrowed $296 billion in investment-grade debt through Oct. 12, making them the largest borrowers of any industry outside finance.

For companies selling the buildout, local resistance is a cost to manage. Dan Diorio, an official with the Data Center Coalition, said the industry knew many midterm winners had promised moratoriums. “We should expect them to want to deliver on those promises, but there are going to be real world consequences of that,” he said, citing possible lost tax revenue or payments for host communities. Barclays Investment Bank’s Dominique Toublan said, “AI pushback is bipartisan but local, making the buildout pricier rather than stalling it.”

Investors still expect expansion. Dan Ives of Yorkville Ives & Co. called the selloff a buying opportunity, arguing that most planned centers for the next 18 months would still be built. “Current data centers with permits and construction underway are not being stopped and this includes Texas,” he wrote. Projects may face more organized resistance, but the money behind them is still looking for a way through.