Voters Slam the Brakes on AI Data Centers, and Wall Street Feels the Jolt

Voters just sent Washington and Wall Street the same message: slow down on AI data centers. At least 44 of 47 data center measures on Tuesday's ballots passed — everything from outright bans to temporary moratoriums — with a handful still undecided, according to CBS News.

The midterms also handed wins to candidates who campaigned against unchecked construction. Texas Gov.-elect Gina Hinojosa, who unseated Republican incumbent Greg Abbott, told CNN's Jake Tapper she wants new data centers halted until safeguards exist. 'What has happened is data centers have moved into mostly rural communities and there are no rules to protect Texas,' she said. In Georgia, Democratic Gov.-elect Keisha Lance Bottoms told 'CBS Mornings' she'll sign an executive order pausing new builds after taking office in January.

That's a direct threat to a state carrying serious weight in the boom. Texas accounts for 25% to 30% of the data center capacity expected online by 2030, with 169 facilities running, 118 under construction and more than 500 plotted. Meta, Google and Microsoft have all announced major projects there in the past two years.

Markets didn't take it quietly. Stocks plunged Thursday, dragging the tech-heavy Nasdaq into correction and erasing post-election gains, before rebounding Friday morning. Capital Economics markets economist Joe Maher wrote that it's unclear whether the midterms will be the catalyst that derails the AI equity boom — but it 'strengthens our sense that the boom is in its final innings.'

OpenAI is already pivoting. On Thursday the company said it will stop using controversial nondisclosure agreements with public officials and give residents access to construction plans as it tries to rebuild trust with local communities. President Trump, meanwhile, posted on Truth Social that he's '100% in favor' of AI and vowed to work with states that want to 'become RICH by having them.'

CBS News business analyst Jill Schlesinger told 'CBS Mornings' the selloff reflects investors digesting the ballot results, and warned more swings are coming. 'What we are now seeing is a repudiation of the AI story,' she said, pointing to unprofitable AI firms borrowing from and investing in each other. Her advice to retirement savers: 'taking no action is a wonderful action in and of itself long term.' deVere Group CEO Nigel Green called dumping the whole sector 'an overreaction,' but noted tech 'had become the most crowded trade on the planet.'