Texas governor race and state ballot measures hit AI data center stocks
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In the US midterm elections, Democratic candidate Gina Hinojosa, seen as supporting a pause on new AI data center construction, is projected to defeat incumbent Republican Governor Greg Abbott and win the Texas governor race, sending AI-related stocks lower. According to Wells Fargo, Texas accounts for 27% of planned US data center capacity. The market reaction was concentrated in tech stocks: Nasdaq 100 futures fell 0.8%, more than twice the drop in Dow futures; the State Street Technology Select Sector SPDR ETF (XLK) fell 2% on Robinhood; high-risk new cloud provider CoreWeave, which borrows to build data centers, fell 7%. Follow-up reports said the Nasdaq Composite fell as much as 5.7% intraday on Thursday, more than 10% below its October 6 high, entering correction territory. According to 404 Media, of more than 40 data center-related ballot proposals across 13 states, 38 have been rejected, 6 cities have outright banned data centers, and 12 cities have limited their power draw in megawatts; Abbott, who backed data centers, lost by more than 700,000 votes, and anti-data-center candidates won state-level and mayoral races in multiple places.
AI overview based on source reports · Updated 11 hr ago
Developments
2 developments
- Nov 5 01:58 · 1 reportsMultiple US midterm ballot measures reject data center proposals404 Media：American Voters Overwhelmingly Reject AI Data Centers
- Nov 4 15:00 · 2 reportsTexas governor race result sends AI stocks lowerHacker News AI：AI stocks slide as Texas governor result raises data center risks
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- Hacker News AIStocks plunge as midterm results send AI trade into a tailspin
The Nasdaq Composite fell as much as 5.7% Thursday, entering correction territory, as investors weighed whether Democratic midterm gains could slow the data center buildout, with Texas' Democratic gubernatorial victory a key factor given the state's role in AI infrastructure. Nvidia fell 7%, a chipmaker index dropped 10%, and CoreWeave and Nebius plunged roughly 11% and 15%, while the VIX surged 50% to a seven-month high. Yardeni called a slowdown in the "too frenzied and speculative" AI buildout a potential silver lining, while Truist's Lerner said the risk-reward is improving for longer-term investors.
- Ars Technica · AIFeaturedBig Tech claims voters’ AI backlash is “anti-Trump” not “anti-tech”
Voters in the US midterm elections backed candidates and ballot measures restricting AI and data centers, with 38 of 44 data center measures across 10 states passing, and Democrats winning governor races in Texas, Arizona, Georgia and Ohio. Industry figures such as Chamber of Progress CEO Adam Kovacevich downplayed the results as an "anti-Trump wave" rather than an "anti-tech mandate," while civil rights advocates and analysts described it as the first true "AI election." The article also reports that a slowdown in US data center buildout could benefit China and that Elon Musk was among the biggest losers on election day.
- MIT Technology Review · AITexas was the new epicenter of the AI data center buildout. That might be kaput.
Democrats won Texas' US Senate and governor races and took control of the state House for the first time in 24 years, with data centers a central campaign issue; governor-elect Gina Hinojosa pushed for a full moratorium after previously supporting tax breaks for data centers in 2023. The article notes massive projects underway, including the 1,820-megawatt Stargate Frontier in Shackelford County and the 6,400-megawatt Nexus Hubbard intended mostly to serve Anthropic, and that Governor Abbott directed a key state regulator on September 21 to halt data center permits. It adds that no single state office decides project outcomes, so local officials and construction unions may complicate follow-through on a moratorium.
- 404 MediaFeaturedAmerican Voters Overwhelmingly Reject AI Data Centers
In the midterm elections, data center-related proposals appeared on ballots in more than 40 races across 13 states, and voters opposed them in 38 and counting, with six cities banning data centers outright and 12 capping their megawatt draw. Candidates who backed data centers lost nationwide, including Texas Gov. Greg Abbott, who lost his bid for a fourth term by more than 700,000 votes to Democrat Gina Hinojosa, and Elon Musk responded on X that "Data centers in space looking pretty appealing right now." Local Progress's Michael Whitesides said the results show people don't want data centers in their backyards and don't see the promised benefits in their daily lives.
- Hacker News AIAI stocks slide as Texas governor result raises data center risks
AI stocks fell overnight as Democrats, seen as backers of data center moratoriums, won midterm races including the Texas governorship, where Gina Hinojosa was projected to defeat incumbent Greg Abbott. Nasdaq-100 futures dropped 0.8%, while CoreWeave fell 7%, Nebius 4%, SpaceX 6% and Oracle 4% on Robinhood. Wells Fargo estimates 27% of planned US data center gigawatts are in Texas, and strategists warned a Democratic win there could be a "left-tail event" for the AI trade.
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