After the midterms, things are looking rocky for Elon Musk and data centers

Key points

• Democrats' midterm wins could make it harder for tech companies to build data centers.
• Voters rejected data center measures and elected officials who promised restrictions.
• OpenAI released a compute campus policy blueprint dropping NDAs and promising less secrecy.

Democrats' historic victory in this week's midterm elections could have a dramatic effect on the tech industry, according to a TechCrunch Equity podcast discussion. In dozens of local ballot measures, voters rejected data centers, and politicians who campaigned on restricting data centers were elected, including Texas governor-elect Gina Hinojosa.

On the podcast, Sean O'Kane said Elon Musk "seems to have basically nothing out of donating half a billion dollars" to Republicans, while his companies are headquartered in a state that has turned heavily Democratic.

Why data centers became an issue

Kirsten Korosec said data centers probably were not the main cause of the "blue wave," but the issue has become increasingly grassroots, partly because of how hyperscalers and companies sought project approvals, often with secrecy and NDAs. She said Republicans, independents and Democrats saw this as wrong.

Anthony Ha said anti-AI and especially anti-data center sentiment seemed to be a potent political force, and that the next two years could be more difficult for tech companies and data center builders.

seems to have basically nothing out of donating half a billion dollars

— Sean O'Kane

OpenAI changes its approach

Korosec said OpenAI has already released what it calls a compute campus policy blueprint, dropping NDAs and promising to share plans and operate with less secrecy. Ha said the move is also an attempt to rebrand data centers as "compute campuses" because the phrase has become toxic.

O'Kane called the rebranding ridiculous and said it will not change anything. Ha also noted that Wall Street is less excited about spending on new data centers and compute.