By Priya Raman

Local voters backed data center restrictions in 46 of 47 ballot measures, so AI infrastructure companies must adapt their site plans and community payments rather than assume a smooth buildout.

What did the midterms change?

Democratic candidates won the midterms and flipped both chambers of Congress, with the cost of living, the war in Iran and data centers among the issues that defined the result. Data center opponents emerged as the only bigger winner.

Governors who ran on pausing new projects won in Texas, Ohio and Georgia. Cleanview, an energy research firm, calculated that 41% of the planned national data center pipeline now sits in states where the new governor supports a pause.

The AI industry still wants to spend trillions of dollars on the buildout and is unlikely to give up. Four options could keep construction moving: orbital computing, smaller facilities, distributed networks and larger payments to host communities.

Can data centers move into space?

Elon Musk had an answer ready by the morning after the election: “Data centers in space looking pretty appealing right now,” he posted. He had promoted space-based data centers for months.

In October, Google completed a successful data test from space, while startup Starcloud put Nvidia chips into orbit to run artificial intelligence workloads. Solar panels in space produce up to eight times more power than the same panels on Earth, and nobody can file a zoning complaint there.

The hard part is heat. Space has no air or water to carry heat away, so servers must shed it through large radiating panels. Launch costs remain considerable, and engineers still need to solve maintenance.

A model built by space startup Varda found that orbital computing costs about four times more per watt than ground computing. Jeff Bezos called rivals’ two-to-three-year timelines “probably a little ambitious.”

Can smaller sites fit under the caps?

At least four bans that passed set a 25-megawatt limit: Sunbury, Defiance and Conneaut in Ohio, and Ottawa in Kansas. Depending on design, 25 megawatts can describe anything from a building the size of a large house to a site spread across several football fields.

A project below the cap can avoid the ban if it sits near existing power and customers. That exception turns scale into the central design question for developers seeking to keep building.

The Electric Power Research Institute is working with Nvidia, Prologis and InfraPartners on a pilot of about 25 data centers across five utilities, each sized at 5 to 20 megawatts.

The sites will sit beside electrical substations, which often have spare power and fiber lines already in place. Each is too small to interest most operators, so the pilot plans to run them together as one network.

Can computing be pooled across sites?

Until now, the industry had little reason to solve distributed computing, the coordination of machines across locations; pooling capacity now offers a way around location-specific resistance. Nvidia and Cisco have launched networking gear that links data centers in different places so they operate as one machine.

Prime Intellect trained a model using computers in five countries across three continents. Akash Network, a marketplace for idle chips, wants to train models on computers in solar-powered homes and hopes to have them on its network by 2027.

The distributed approach is slower and clunkier than one large cluster, a linked computing system. The models built this way so far remain much smaller than frontier systems, meaning the largest AI models. Major laboratories are not fans of the approach. But it works, and it avoids a local vote on each site.

Will builders pay more for local consent?

A community benefit agreement is a negotiated deal that directs part of a project’s economic gains to its host town, usually worth millions to tens of millions of dollars. Rewiring America argues the industry should pay more, and on different terms.

The group’s CEO, Ari Matusiak, says a 200-megawatt data center carries roughly $500 million in energy costs. He argues that money could instead fund rooftop solar, batteries and heat pumps for about 50,000 nearby homes, supplying roughly the same power while potentially lowering household bills.

Texas Governor-elect Gina Hinojosa said her data center moratorium, or temporary pause, will continue until legislation gives communities a voice, protects utility bills and ends tax breaks. She takes office in January.

Texas holds nearly 30% of the U.S. data center capacity due online in 2028. The industry has become accustomed to spending millions to win over communities; Texas may require it to start thinking in billions.