Equity podcast hosts see a harder road for data centers after the midterms

TechCrunch published an edited preview of a recent Equity podcast episode in which Kirsten Korosec, Sean O'Kane and a third host (the article's narrator, with Anthony Ha speaking in the transcript) discuss what this week's midterm elections, won by Democrats, could mean for the tech industry. The article's intro says voters rejected data centers in dozens of local ballot measures, and that even where the issue was not on the ballot, voters elected politicians who campaigned on restricting data centers, such as Texas' new governor-elect Gina Hinojosa.

O'Kane opened with Elon Musk. He says Musk, one of the biggest data center builders and the largest donor to the Republican Party, "seems to have gotten basically nothing out of donating half a billion dollars", with the figure possibly higher once the final count is in. Musk's businesses are now based in a state that has turned "about as blue as it could possibly turn". O'Kane also said that ballot measures meant to speed up data center construction were almost all voted down. An editorial bracket corrects this: many of the measures would have imposed restrictions or moratoriums on data centers, and almost all of those passed. O'Kane adds that there is a consensus view in the tech world that Democrats in power will mean many roadblocks for data centers, especially in Texas, where Hinojosa has spoken openly about making this a priority now that she has beaten Greg Abbott.

Anthony Ha says he does not think the tech world is too focused on the issue, though he understands why it might look disproportionate: data center measures were on some ballots, not everywhere. He sees an undercurrent that cuts across the country and is bipartisan in many ways, but which Democrats seem to have harnessed better. Among the many reasons Democrats did well on Tuesday, he says, anti-AI and especially anti-data center sentiment seems to have been a big part, and a potent political force. He expects the next two years, and potentially longer, to be harder for tech companies in general and for hyperscalers and data center companies in particular, and wonders whether the issue will last to 2028 and beyond.

Korosec agrees only in part. She does not think data centers are what brought people to the polls and produced the "blue wave", but says they have become an increasingly grassroots issue. Her reason is how hyperscalers and other companies got projects approved: very secretively, often requiring NDAs from elected or appointed officials, and without sharing the scale of projects in environmentally sensitive areas, including the Southwest, where water is scarce. Republicans, independents and Democrats all saw this as wrong, she says, though it was not a single issue for them.

She then points to OpenAI. After a lot of hand-waving that AI companies could not operate any other way, OpenAI is saying it can change its policies. It has released what the speakers call a compute campus policy blueprint. In Korosec's telling, OpenAI will no longer require NDAs and will share its plans and supposedly operate with less secrecy. Her conclusion: when regulatory certainty, or at least signals of it, appear in the market, corporations respond; without them they will not necessarily do what people hope.

Ha notes that the "compute campus" label is also an attempt to rebrand data centers, which have become a toxic phrase. O'Kane is dismissive: "this is ridiculous. Come on. It's not going to change anything." He says it costs OpenAI effort and does not look likely to move the needle, for a company that says it is no longer focused on side quests. Korosec jokes that OpenAI should create a cute compute campus avatar, and Ha jokes that if these are lovely campuses, the company should put its offices next door.

Ha closes with a financial angle: the election may be the second part of a one-two punch, after a shift in how Wall Street reacts to hyperscalers and AI companies. Investors, he says, are not excited about spending so much on data centers and compute, so there is a financial incentive not to build them. It will probably be harder to build them from a regulatory standpoint, and Wall Street is unlikely to reward it, yet to reach the scale they want the companies will probably still need to build data centers somewhere.

Key facts

The article says voters rejected data centers in dozens of local ballot measures, and that candidates such as Texas governor-elect Gina Hinojosa campaigned on restricting them.
Sean O'Kane says Elon Musk, the largest Republican donor and a major data center builder, got basically nothing from donating "half a billion dollars", maybe more by the final count.
Kirsten Korosec says data centers were probably not the main driver of the "blue wave" but are an increasingly grassroots issue, partly because of secretive approvals and NDAs for officials.
Korosec says OpenAI's new "compute campus policy blueprint" means no more NDAs and supposedly less secrecy; Anthony Ha calls the naming an attempt to rebrand data centers, and O'Kane says it will not change anything.
Ha expects the next two years and possibly beyond to be harder for tech companies, with Wall Street's cooler attitude to data center spending adding a financial incentive not to build.

Why it matters

The discussion links the election result to the physical build-out behind AI. The speakers argue that local resistance to data centers is turning into a political force, one that Democrats seem to have harnessed more effectively, according to Ha. O'Kane describes a consensus view in the tech world that Democratic control means many roadblocks for data centers, especially in Texas. Korosec adds a second point: OpenAI's policy changes show companies will shift when regulation, or signals of it, arrive.

Who it affects

Hyperscalers, data center companies and AI developers such as OpenAI, which Ha says face a harder next two years and possibly beyond. Elon Musk is named as a large Republican donor whose companies are based in a state that has turned very blue. Local officials and residents are affected too: Korosec describes officials being asked to sign NDAs and communities in water-scarce areas such as the Southwest not being told the scale of projects.

How to use it

This is a podcast preview, not a product or a ruleset, so there is nothing to adopt. It is useful as a read of how three TechCrunch hosts see the politics of data center siting. If you follow data center projects, the points to watch are the ones raised: how approvals are handled, whether NDAs for officials continue, and whether companies publish plans in more detail, as Korosec says OpenAI now promises to.

How solid is it

This is conversation and opinion, in a transcript edited for length and clarity, not reporting with data. The article gives no list of the ballot measures, no locations or vote counts, and no seat totals. The source also contains a correction: O'Kane's remark that nearly all data center measures failed is followed by an editorial bracket saying many measures would have imposed restrictions or moratoriums and almost all of those passed. Korosec's account of OpenAI's blueprint is her own paraphrase, and no OpenAI statement is quoted.

Risks and caveats

The speakers themselves caution against over-reading the result. Korosec says data centers were probably not the main cause of the "blue wave" and not a single issue, and Ha notes the measures were not on ballots everywhere. Korosec says OpenAI will "supposedly" operate with less secrecy, and O'Kane doubts the rebrand changes anything. Ha also points out that companies will probably still need to build data centers somewhere to reach their desired scale.

“I don’t think that the data center issue is what brought everyone to the polls and led to the quote-unquote “blue wave.””

— Kirsten Korosec, TechCrunch Equity podcast