41% of US Data Center Plans Face Halt Risk in Five States Democrats Flipped, With Musk Hit Hardest
Summary
- Five states where Democrats retook the governorship account for 41% of all U.S. data center construction and development plans, raising the risk of a halt to new data center development.
- Policies calling for a halt to new data center development and construction delays in states including Texas are set to hit Elon Musk’s planned 1-gigawatt new data center construction.
- Gary Ng said that if U.S. artificial intelligence (AI) development slows, delays in data center construction could push up AI service prices and allow Chinese companies to expand in overseas markets.
Forecast Trend Report by Period
Defeat After Pouring $200 Million Into Texas
China May Benefit if AI Development Slows
Five states where Democrats reclaimed the governor’s office in the U.S. midterm elections account for 41% of all planned and under-development data center projects nationwide, raising the risk that new projects could be halted.
According to DCMap, a U.S. website that tracks data center projects, Texas, Georgia, Ohio, Nevada and Iowa — the five states where Democrats won back governorships in this election — have 505 data centers under construction or planned, with combined power capacity of 142.5 gigawatts as of November 4. That represents 41.2% of all U.S. projects by power capacity.
Texas accounts for 26.9% of U.S. data center capacity, or 93.1 gigawatts, after Governor-elect Gina Hinojosa pledged to halt new data center development. Georgia, at 19.8 gigawatts, or 5.7%, and Ohio, at 17.6 gigawatts, or 5.1%, followed. Georgia Governor-elect Keisha Lance Bottoms said she would temporarily suspend new data center construction until the state reviews its economic and environmental impact. Ohio Governor-elect Amy Acton has taken the position that construction should be deferred until data center companies bear the full cost of electricity.
Elon Musk, chief executive officer of Tesla and SpaceX, stands to take the biggest hit from the Texas result. Musk spent $446 million backing Republican candidates nationwide, including $200 million to support Ken Paxton, the Republican candidate for the U.S. Senate in Texas. SpaceX is known to be pursuing construction of a new 1-gigawatt data center in Texas.
Gary Ng, a senior economist at Natixis, said a slowdown in U.S. artificial intelligence development could amount to a win for China. If U.S. data center construction is delayed, computing supply could be constrained and AI service prices could rise. That could help Chinese companies, with abundant power and cheaper inference services, push into overseas markets.
Kim In-yeop, Silicon Valley correspondent, Hankyung.com inside@hankyung.com
Korea Economic Daily
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