Even as the 2024 midterm elections produced a pronounced shift toward Democratic control across many states, the outlook for new data center construction remains largely intact. Recent analyses suggest that only a modest portion of planned facilities will be scrapped, countering expectations of a sweeping industry slowdown.
Political backlash and voter action
Over the past year, a broad opposition to large‑scale data centers—built primarily to support artificial‑intelligence workloads—has swept the United States. In response, several of the nation’s biggest technology firms altered their approach: they reduced secrecy around site selection, pledged greater community benefits, and committed to paying higher rates for electricity. Despite these concessions, many elected officials who once championed the projects have reversed course.
The electoral environment amplified the backlash. Voter sentiment turned more sharply against data centers than pre‑election polls had anticipated. Across the country, citizens voted in 40 of 41 local ballot initiatives to limit or outright prevent new data center development, signaling a strong grassroots pushback.
Analyst forecasts temper expectations of a collapse
Investment bank Bernstein released a scenario‑based assessment of the potential impact of the political climate on data‑center pipelines. In the most extreme case, the firm estimates that 9 percent of projects that would likely have proceeded could be halted before breaking ground. A more moderate outlook projects cancellations of only 2 to 4 percent of future facilities nationwide.
Meanwhile, Susquehanna Financial Group offers a longer‑term perspective. Their analysis predicts that, even if some projects are abandoned, the number of data centers dedicated to AI training slated for 2027 and 2028 will exceed the total built in the current year. This suggests that the sector’s growth trajectory may only be marginally slowed, rather than reversed.
Labor and policy considerations
Labor unions and newly elected Democratic leaders are shaping the policy environment for upcoming projects. Austin Keyser, a senior regional official with the International Brotherhood of Electrical Workers (IBEW) and advisor to Ohio’s Democratic governor‑elect Amy Acton, emphasized that the industry should not expect a dramatic downturn. “We are not going to see a dramatic downturn,” Keyser said, underscoring confidence that demand will persist.
Acton’s campaign platform included proposals for moratoriums on data‑center projects that fail to meet specific criteria. Those criteria focus on labor and land use: projects must prioritize union employment and be situated on former industrial sites rather than on farmland. Such stipulations aim to align new construction with broader economic and community goals while still allowing the sector to move forward.
Overall, the combination of modest cancellation estimates, continued demand for AI‑focused infrastructure, and policy adjustments that address labor and land‑use concerns points to a resilient data‑center market. While political opposition has intensified, analysts agree that the sector will likely avoid a steep decline, and construction activity is expected to continue, albeit with heightened scrutiny and revised community‑benefit expectations.
Mitchell Landsberg is a Senior Technology Correspondent at News Raise. He covers consumer electronics, artificial intelligence, software developments, and digital privacy trends.
