By Elena Vasquez

Goldman Sachs estimates that nearly half of planned US data-center capacity could be affected by the Democrats' overwhelming midterm victory on Tuesday, a number that turns an election result into a direct commercial problem for the artificial intelligence economy.

Venture capitalists, whose profession rests on predicting the future and backing the right people, watched the blue wave make their loudest political wagers look misjudged. Some of the industry's most prominent figures had gone all in on MAGA-aligned politics. On Wednesday morning, several of the loudest VC voices on the right — including Marc Andreessen of a16z and David Sacks of Craft Ventures, who also served as the White House's AI and crypto czar — were remarkably quiet.

On X, the platform owned by GOP megadonor Elon Musk, users joked about a return to an era of DEI, pronouns and land acknowledgments. Investors on the left were far more vocal, eager to note they had never joined the bandwagon. Darian Shirazi wrote: "Remember when all the VCs in Silicon Valley endorsed Trump and said he 'made sense'? Quite stupid. Yeah, I wasn't one of them."

What does the result mean for tech's most prominent donor?

Reid Hoffman, the LinkedIn co-founder who donated nearly $40 million this cycle, said the results carry a clear message for the industry.

"Voters rejected the status quo, and VCs should take that seriously," Hoffman said. "Because some very notable and wealthy tech figures have so publicly supported the Administration as they've harmed Americans, tech's brand has lost massive amounts of trust. VCs should rethink their assumptions about how most Americans are experiencing this economy."

AI data centers emerged as one of the top villains of the election. Goldman Sachs now estimates that election results in Texas and elsewhere could affect close to 50 percent of planned US data-center expansion — capacity that underpins compute for companies from OpenAI down to smaller AI laboratories.

One VC put the consequence bluntly: "They will have trouble finding compute. This election result is definitely going to affect the AI economy."

There was one bright spot for Silicon Valley's biggest spenders. California's billionaire tax proposition — opposed by John Doerr, Vinod Khosla, Ron Conway, Peter Thiel and many others — appears headed for defeat, according to state election results.

Why do most founders want the election over?

Most VCs and founders still refuse to talk politics, viewing it as an unwelcome distraction from product launches, fundraising and hiring. On the ground in San Francisco, investors and founders preferred to discuss their latest release or upcoming round — outside a small but increasingly influential group that has chosen to wade into politics.

The dynamic recalled what a limited partner in many prominent VC funds said during the 2024 presidential race: "I've always wanted our VCs to just shut their mouths and do their job and not be political unless they're defending the startup ecosystem. Other than that, they shouldn't be posturing for a political candidate."

The week's post of the week, from investor Sheel Mohnot, sketched the market read: if data centers become harder to build short term, the winners are Equinix and Digital Realty through scarcity, the losers Nvidia, AMD, Vertiv and Oracle through less buildout, while long term Google, Amazon and Microsoft gain moats and AI startups face pricier compute.

Why did Sequoia pick the day after the election?

While attention focused on the results, Sequoia Capital announced several structural changes: the closure of its London office, the end of its Scout program, and the abolition of Monday partner meetings. A person familiar with the firm's thinking said the aim is to move fast and make decisions quickly, with a 24x7 deal cycle replacing dated VC traditions.

Sequoia is widely seen as setting the industry's tone, and the news drew attention on social media. The firm says it will still invest in Europe, but the continent's startup scene struggled to interpret the retreat.

Victor Riparbelli, CEO and co-founder of UK-based Synthesia, posted on X: "The sad reality is there just aren't enough deals in Europe to justify an office here."

Ann Bordetsky, a board partner at NEA and head of business development at Factory, saw a different story. "It's not the London office. You can win European founders in San Francisco because the companies are global from day 1," she posted. "It's the no more MONDAY meetings, 24x7 deal cycle and decisions moving with the market rather than holding on to dated VC traditions, bravo."

What else moved around the cap table?

• SoftBank-backed Nigerian fintech OPay nearly went public in New York at a $4 billion valuation, then canceled the IPO.
• Jake Storm joins Headline as general partner after serving as a GP at Felicis.
• Blackstone told investors Anthropic might not receive an investment-grade rating after its IPO.

Silicon Valley's political class went quiet on Wednesday. History suggests it will not last.