With the midterm elections just 55 days away, the data-center buildout story has become a major political issue.
Socialists Rep. Alexandria Ocasio-Cortez, D-N.Y., and Sen. Bernie Sanders, I-Vt., have proposed a nationwide moratorium on new data-center buildouts. President Trump, meanwhile, has promoted data centers and infrastructure development as sources of jobs and economic growth.
Last month, Trump wrote on Truth Social, "The only reason that communities throughout the U.S.A. should not want Data Centers is if they want to end up being backward and poor. If they want to be successful and rich, with far lower taxes and jobs all over the place, let Data Reign."
"If we kill the Golden Goose, you will only have yourselves to blame. China could not be happier with this anti-data center movement. Actually, they can't believe it is happening!" Trump continued.
Vice President JD Vance also addressed the issue, acknowledging the backlash around data centers and saying he believes the concerns stem from higher power bills. But data centers wouldn't be an issue if not for years of terrible grid management and climate change policies that have neutered the grid over the last decade.
Data center messaging has been a major issue for hyperscalers, as local resistance, some of which is fueled by outside groups and ones linked to China, spread rapidly and threatens construction timelines, complicating the electricity-demand forecasts underpinning Wall Street's AI trade.
We cited Morganley Stanley in mid-July, which warned:
"An estimated $156 billion of data center projects were canceled or delayed in 2025, and $130 billion in 1Q26. Community pushback against data center construction has accelerated in 2026 as new moratoriums have been introduced, with the majority of the change happening at the local level. This puts pressure on costs and timelines and could alter the geographic distribution of data centers. Sustained data center pushback could ultimately extend the cycle and reduce future supply by lowering capex and financing needs."
And according to Wells Fargo's latest data center tracker, the revolt continues to grow, with 374 active local moratoriums by the end of summer, compared with 92 reported in June.
Analyst Shahriar Pourreza said the data center blowback centers on electricity costs, grid capacity, water use and the impact of large industrial developments on surrounding communities. He compared the organized opposition to the resistance that materialized around natural-gas infrastructure.
Michigan, Ohio, North Carolina, Iowa and Tennessee rank among the states with the most local moratoriums in Pourreza's report.
Pourreza continued:
State-level policy actions have also been increasing (recently Texas Audit/PA GRID & EO among others) alongside election rhetoric (PA, TX, GA, OH, IA, MI, WI, KS) because DCs are unpopular across the political spectrum.
In our view, the most exposed to state- level DC political rhetoric risk are: The IPPs (CEG, NRG, TLN, VST), AEP, CMS, CNP, DTE, EXC, FE, LNT, PPL, SO, SRE, and WEC. That said, we think much of the current pressure is optical and election-driven and should moderate post-November.
We believe noise will quiet post-Nov. as election winds down, econ- dev/nat'l security interest wins out. While we are less comfortable calling the trend fully benign, we view risk as manageable for credible projects. The unregulated era is over, but load-growth is not. State involvement post-Nov. could even be constructive by giving local officials more comfort. We think the market will always allow responsible hyperscaler projects that do not shift costs & deliver meaningful community benefits.
He pointed out that active moratoriums average about 346 days, while the average across all tracked measures increased to 311 days from 277. Some extend as long as five years. Even temporary pauses can delay projects enough to push developers toward other states.
Map of Active Local Data Center Moratoriums
Mounting moratoriums pose an execution risk for the AI trade as local opposition and infrastructure constraints delay projects.
A Democratic sweep in the midterms could increase investor concerns about nationwide restrictions, though passage would remain uncertain. If enacted, a broad construction moratorium could reprice stocks linked to the AI buildout and derail Trump's 'Digital New Deal,' holding up the entire economy - and, in fact, the entire global economy (read here).