Data Center Backlash Raises AI Trade Risk Ahead of US Midterms, Investors Warn

Public opposition to data centers could disrupt the AI trade as U.S. midterm elections approach, with Democratic gains potentially slowing the buildout that has powered the stock bull market into its fourth year. Data center and AI infrastructure spending is expected to top $1 trillion next year. A Democratic sweep of both chambers in the November 3 elections is the most likely outcome, according to prediction markets Kalshi and Polymarket. While analysts doubt legislation that significantly stalls construction would become law — Trump would likely block it — Democratic control of Congress would mean more hearings and investigations into AI and data centers, raising volatility. A Reuters/Ipsos poll this month showed 69% of Democratic registered voters back limits on building data centers, versus 43% of Republicans. Investors are also watching state and local races, including governorships in Texas, Ohio, Pennsylvania, Georgia, Nevada, Wisconsin and Michigan, where authorities hold sway over development pace.