Voter referendums block, grid queues delay: Has the 'AI trade' ended amid the nationwide political backlash?

Author: Ozeco, Crack The Market

Translation: TechFlow

TechFlow Editor's Note:As multiple referendums and local elections across the U.S. concluded in November, public resistance to the expansion of AI data centers reached an unprecedented high. Exit polls showed that 76% of surveyed voters explicitly opposed building data centers in their own communities, and the policy balance in key compute hubs such as Texas and Georgia is also shifting subtly.

This broad community resistance, combined with a sharp pullback in semiconductor and hardware infrastructure stocks, has triggered widespread Wall Street panic over whether the AI capital expenditure cycle has peaked.

However, looking beyond the panic, existing compliance-approved compute projects under construction and scheduled for delivery before 2027 have not halted. The real squeeze is concentrated in long-term plans for 2028 to 2030.

This political backlash has not ended the AI narrative; it is repricing the allocation logic of compute assets.

Seven Questions, Seven Answers: The Nationwide Public Backlash and the Real Impact on Data Centers

Note: This article was written at the beginning of the sell-off. At Thursday's U.S. market close, the Philadelphia Semiconductor Index (SOX) fell about 10% in a single day, down 37% from its all-time high, the Nasdaq declined 4.6%, and Vertiv plunged 14%.

At the same time, Digital Realty and Equinix, which hold ready power capacity, fell only 4% to 5%, roughly 13% below their all-time highs.

On November 3, U.S. voters across the country were asked 41 times about data center construction, with answers showing near-overwhelming consistency: national exit polls showed that 76% of respondents explicitly opposed building data centers in their own communities.

In this election, Democrats won the Texas governorship, while Texas is currently the single largest hub for planned compute capacity in the U.S.; Democrats also took control of Georgia's public utilities regulator.

The market's first reaction was to treat this as a fatal threat to the AI build-out cycle, but the author believes this is a completely wrong analytical framework.

Projects already under construction will continue to advance; what is affected is long-term supply coming online after 2028. These assets are being repriced, which is exactly what makes existing compute facilities with ready power more valuable.

Did this election mark the end of the AI trade? The answer is no. What the election changes is not demand itself, but who can capture the profits and when.

Around AI infrastructure construction, there are currently two distinct but simultaneous battles:

The state-level battle over who pays for grid expansion can ultimately be resolved with money and is expected to be settled before mid-2027.

But the local community battle over where these compute facilities will actually be built in someone's backyard cannot be settled with money. It is this resistance that will keep actual supply for 2028 to 2030 far below plans.

Will compute construction stop? Projects under construction in 2027 and slowdown in Texas

Will compute construction simply stop? No.

From an engineering-level screening model, all projects scheduled for delivery before the end of 2027 are already in substantive construction. Approximately 87 GW of compute facilities are under construction across the U.S., and net additions in October alone were still 7 GW.

The first cracks appeared in Texas. As the hub with the largest planned capacity, Texas's new starts in October slowed sharply from 3.4 GW in September to just 0.6 GW.

Scale of long-term supply delays: repricing 2028 to 2030 plans

How much capacity will be delayed? The pipeline truly exposed to risk is for 2028 to 2030.

The author's estimate range is: under moderate schedule slippage, about 10% of deliveries may be delayed; if localities impose strict moratoriums, the delay ratio could reach 28%. The author leans toward the lower half of this range.

The first industry model revision released after the vote has already cut this batch of long-term deliveries by about 11%.

Stranded capacity hits a record high: the gap between nominal plans and actual deliveries

How many plans will be completely canceled? Nationwide 'stranded capacity' stalled by permitting and grid queues has reached a record 61 GW, about 13% of the entire planned pipeline, and jumped by 9 GW in October alone.

This figure may appear startling, but investors often overlook a key fact: of the grand plans publicly announced by major tech companies, only about 30% were ever expected to be delivered on schedule before 2030; headline nominal numbers have never represented true supply capacity.

Most of the real damage comes from schedule delays: among the 51 GW projects announced in January this year slated to come online in 2027, as much as 31 GW has been pushed back to 2028 or later, and about 9 GW has been formally withdrawn, canceled, or shelved.

Public Opinion Split and Incumbent Trust: A Divide in Treatment Between New and Existing Sites

Has the industry completely lost public acceptance? For new siting, the answer is largely yes: 76% of voters oppose building new data centers in their own communities.

But in mature communities already hosting data centers, voter support and opposition stand at 49% versus 42%. When projects commit to self-supplied power, community benefits, and local veto rights, they win 64% support across scenario comparisons.

Could projects under construction be halted? This is currently the biggest exposure risk. In Ashville, Ohio, nearly 82% of voters voted to revoke an agreement for a campus already under construction. While a single town does not represent a national trend, this is the first real stress test against projects under construction.

Who ultimately benefits: revaluation of existing assets holding ready power

Why have related hardware stocks fallen so sharply? Beyond political resistance, the market is already pricing in expectations of reduced 2028 construction scale and slower capital expenditure.

On November 4, Vertiv, Quanta, and GE Vernova fell 9% to 13% in a single day, and some infrastructure contractors lost nearly half their market value within four weeks. This clearly goes beyond a pure reduction in engineering scale; market sentiment has shifted markedly toward risk aversion.

Who ultimately captures the commercial returns? The dispute over who pays can be resolved with money, but community conflicts over where facilities are built cannot be compromised through subsidies.

This directly constrains future new supply and gives mature existing assets holding ready power approvals (Power in Hand) greater monopoly value and pricing power.

Source: TechFlow