Voters Said No to Data Centers 40 Times Out of 41. By Wednesday Afternoon Amazon Was Up 8%, Google 6%, and CoreWeave, the Smaller Rival Renting Out AI Computing, Was Down 10%
About This Episode
Democrats flipped both chambers of Congress on Tuesday and voters sided against data centers in 40 of 41 local ballot measures. Analysts warned overnight of an AI sell-off, but on Wednesday the market split the industry in two: Amazon, Google, Microsoft and Meta rallied while CoreWeave and other smaller 'neocloud' builders sank, with Needham's Laura Martin writing that higher regulatory barriers entrench incumbents.
Our Take
The public voted against Big Tech's data centers almost everywhere it was asked, and Wall Street's first-day reading is that the no falls on Big Tech's smaller rivals: a harder permit is a moat for whoever already has the power, the cash and the buildings.
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Compute Landlords: When AI Builders Become Rentiers
Its shortage-versus-glut test (in a shortage the owner of the building sets the terms, and the tenants are whoever cannot build their own) is the frame for why a vote that makes new capacity harder to permit raises the value of capacity the four biggest companies already hold.
Data Center Moratoriums: Who Vetoes the AI Buildout?
Its warning that a veto can act as a sorting mechanism rather than a brake applies one level up: Tuesday's vetoes sort among builders by balance sheet, and its 'keep the veto, change the deal' prescription is the test for what the new governors do with the lever.