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The US midterms delivered a heavy defeat for Donald Trump's Republican Party. Democrats won in Texas, Ohio and Kansas, a state that had not gone blue since the 1930s. Most of that reflects unhappiness with the President himself, but data centres became one of the defining issues of the campaign.
The Thursday after the vote, the Nasdaq fell 5% and talk of an AI bubble returned. The main reason is that America's data centre build-out could face tougher regulation once the new Congress takes its seats.
The voice-to-text app that built its own speech model
Most dictation apps are a wrapper around someone else's speech model. Wispr Flow trained its own.
It's called Canto, and it was built for the way people actually talk to AI: thinking out loud, changing direction mid-sentence, half-whispering in an open office.
Wispr tested it on 10 hours of real dictations from more than 2,300 speakers. Canto had the lowest word error rate of every model tested, including models from Google, OpenAI, AssemblyAI and Deepgram. That means your prompts to ChatGPT, Claude and Cursor come through the way you said them.
Talk naturally in any app and Wispr Flow types clean, formatted text, 4x faster than typing.
James Talarico beat Ken Paxton in Texas on a promise to "rein in" the companies building data centres. Sherrod Brown won in Ohio with ads that blamed them for rising utility bills. Elon Musk, who spent hundreds of millions backing Republicans, posted on X: "Data centers in space looking pretty appealing right now."
A Gallup poll in May 2026 found that seven in ten Americans opposed an AI data centre in their area, with nearly half strongly opposed. Only 53% said the same of a nuclear power plant. These buildings drive economic growth and create blue collar jobs, so the depth of the hostility needs explaining.
A factory that employs almost no one
The factory powered the last great economic transformation. It was an eyesore and could be dangerous, but people worked there and were paid, so towns grew up around it. The data centre is the factory of the intelligence age, and it breaks that bargain almost completely.
The money is vast. Financial Times figures from first-quarter earnings show Amazon, Microsoft, Alphabet and Meta plan around $725bn of capital expenditure in 2026, up 77% on last year's record of $410bn. Most of it is going into chips, networking and the buildings that house them.
Many large facilities are cooled by evaporation, which consumes drinking water from the public supply. In Newton County, Georgia, some applicants asked for six million gallons a day, more than the whole county used. Golf courses still use three to four times more water than every US data centre combined, but the perception has stuck.
The bigger grievance is employment. Brookings research by economists Dany Bahar and Greg Wright, covering 770 data centres across 93 counties, found that large projects often promise only dozens to a few hundred permanent jobs. The construction work is real, but it leaves with the contractors.
A Harvard poll found more Americans would rather live near an e-commerce warehouse than a data centre. The warehouse brings trucks and noise, but it employs people. The data centre answers to a corporation in another state or country, draws on the town's resources and gives back little that a resident can touch.
How local anger became a national vote
The opposition began in planning meetings. Data Center Watch counted 843 opposition groups across 49 states by the summer of 2026. In the first half of the year they helped block or delay around 120 projects worth nearly $200bn.
Local politicians felt it first. In Warrenton, Virginia, every councillor who backed an Amazon data centre in 2023 lost their seat at the next opportunity, and a lawsuit has kept the project stalled for three years.
By the autumn, the opposition had become campaign strategy. Campaigns and outside groups spent $173m on general election ads about data centres, with Democrats accounting for around $140m. Leading the Future, an AI industry super PAC network that launched with around $100m, lost its biggest bet in South Carolina's Senate race.
In Texas, Gina Hinojosa beat Governor Greg Abbott after attacking his support for data centres. By Newsweek's count, 13 of the 15 House Republicans who lost their seats had been rated as boosters of the AI industry. The NBC News exit poll found 76% of voters opposed a new data centre in their community, across both parties.
A small number of opponents have turned to threats and violence, including shots fired at the home of an Indianapolis councillor who had backed a local project. The Soufan Center reports that such cases remain a fraction of the movement, which has worked almost entirely through petitions, hearings and the ballot box.
The economy now leans on the build
Companies are building because the demand already exists. Hundreds of millions of people use chatbots, coding assistants and AI search every day, and that computation needs a building, power and cooling. The same Brookings research found counties landing their first large data centre saw private employment rise by 4 to 5%.
A town can refuse a data centre, but the computation then moves to the next county, the next state or a country with cheaper power. Communities have more to gain by using their leverage to secure water guarantees, grid protections and better infrastructure.
Stopping the build-out is far harder than winning an election on it. The Bureau of Economic Analysis puts third-quarter growth at an annual rate of 3.4%, with spending on computer equipment and software accounting for roughly a third of it. The companies involved are among the largest in the S&P 500, which underpins millions of pensions.
The trades have made their position clear. The International Brotherhood of Electrical Workers, with around 900,000 members, urged members to lobby Congress against a data centre moratorium. Building unions have long been among the Democrats' most reliable supporters, and the party now has to govern an economy that depends on these sites.
Many campaigners are asking for something short of a ban: a written promise that the data centre will cover any rise in electricity bills and protect the town's water. The old factory earned its place by employing the community. The data centre will keep going up, and the next generation of towns will decide what it owes them in return.
