The Datacenter Backlash Goes Bipartisan: Next Week's Midterms and the 2028 Buildout

Key Points:

• The 2027 US datacenter buildout is largely underway, with about 75% of the 33.8 GW pipeline already under construction, making the 2027 capacity forecast stable despite upcoming midterm elections.
• The major uncertainty lies in 2028, where 62.2 GW of net additions are expected, but most projects have not started construction and depend on states holding gubernatorial elections on Nov. 3, which could lead to new restrictions or moratoriums.
• Texas, the largest datacenter market, has paused environmental and power permits, with the duration of this freeze hinging on the gubernatorial election; incumbent Gov. Greg Abbott favors resuming permits after grid and water reviews, while challenger Gina Hinojosa supports a lengthy moratorium until new legislation is passed.
• Many midterm candidates from both parties advocate for stricter conditions on datacenter development, including making developers pay grid costs, ending tax breaks, and limiting water use, reflecting growing local opposition driven by concerns over jobs, power rates, and environmental impact.
• State-level decisions by governors, legislatures, and utility commissions will critically shape the pace and scale of datacenter projects post-election, with states categorized into tiers based on their capacity exposure and likelihood of policy changes, highlighting Texas, Ohio, Arizona, and Georgia as key battlegrounds.