Regulation concerns after the election
The Democrats' decisive victory in the US midterm elections has heightened concerns about data center regulation, with cryptocurrency, power and semiconductor companies expected to face substantial pressure. However, the impact on big technology companies that have already built large-scale data centers is expected to be limited.
Reuters reported on November 5, local time: “Democratic victories in key regions with concentrations of data centers, including Texas and Georgia, have prompted expectations of tighter AI regulation. There are concerns that a substantial volume of projects could be delayed if Texas extends its suspension of data center permits.”
According to Goldman Sachs, 45% of planned US data center expansion capacity is concentrated in regions where Democrats could restrict data center development. Texas alone accounts for 25% of the total. See this publication's November 5, 2026 report: “Democratic control of Congress could constrain AI data center investment, with half of new US projects at regulatory risk.”
Potential pressure on infrastructure, power and chips
Sectors expected to be affected by delays in data center development include data center infrastructure, electricity supply and related equipment, semiconductors, and AI cloud services.
US investment bank Morgan Stanley identified cryptocurrency mining companies including Cipher Digital, MARA Holdings and Galaxy Digital, along with energy infrastructure company Solaris Energy Infrastructure (SEI), as data center infrastructure businesses likely to be affected. Cryptocurrency mining companies have expanded their data center infrastructure businesses using the large quantities of graphics processing units (GPUs) secured for their existing operations.
Morgan Stanley explained: “These companies are closely exposed to data center regulation in Texas. Democratic Governor-elect Gina Hinojosa and Senator-elect James Talarico, who won in Texas, made a moratorium on data center development a major campaign pledge.”
Private energy companies and power equipment suppliers are also expected to be affected. US investment bank JPMorgan analyzed: “Private power companies including Vistra, NRG Energy, Constellation Energy and Talen Energy could come under pressure from delays in data center projects.” It added: “Although many state governments have not banned data center development outright, the permitting requirements for new projects will become more stringent. Projects that have already received permits will enjoy a significant advantage.”
Morgan Stanley explained: “We expect weak earnings at power equipment companies. However, the impact on US power infrastructure company GE Vernova will be limited because its customer base is diversified and its operations are geographically dispersed.”
Semiconductor companies, considered among the biggest beneficiaries of the AI boom, are also expected to be negatively affected by delays in data center development. Swiss financial services firm UBS said: “A temporary suspension of data center construction would affect about 30% of the expansion scheduled through 2028. This is negative for semiconductors and AI infrastructure.” However, it added: “Semiconductor stock valuations are already close to their lowest levels, so much of this has already been priced into the market.”
Other companies expanding their AI cloud businesses, including Oracle and CoreWeave, are also expected to face adverse effects.
Hyperscalers and utilities identified as potential beneficiaries
By contrast, hyperscalers, or operators of very large data centers, including Amazon, Microsoft (MS) and Alphabet, are identified as potential beneficiaries. Reuters explained: “Hyperscalers are likely to be relatively resilient because their businesses are diversified and they have more capital. For large companies, a slowdown in new data center construction could ease concerns about cash flow and increase the value of existing data centers.” Utilities supplying electricity, gas and water are also identified as potential beneficiaries. Morgan Stanley said: “We expect investors to increase their allocations to utilities including Ameren, Consolidated Edison and Duke Energy.”
Original Korean article: theguru.co.kr
English brief by Korea Wind Intelligence, koreawindintel.com
