US mid-terms get an AI twist: How data centres, power bills could decide key races

The giant facilities powering AI models have become a political issue in communities across the United States. Voters are asking who will pay for the electricity, how much water the facilities will use, what will happen to farmland and whether the promised jobs will justify the disruption.

The issue has also created an unusual political divide. Democrats and Republicans have both started distancing themselves from some data-centre projects, even in states where their parties or governments previously promoted the industry.

The shift comes ahead of the November 2026 mid-term elections, when control of Congress and several key governor’s offices will be at stake.

Data centres have become one of the biggest sources of new US investment, and political volatility, in 2026, reported US-based media outlet Axios. The five largest hyperscalers – Amazon, Microsoft, Google, Meta and Oracle – are expected to spend more than $750 billion on capital expenditure this year, with about 75% earmarked for AI infrastructure, Axios reported.

The scale of that investment has made data centres increasingly difficult for politicians to ignore. About 4,000 data centres are already operating across the US, with more projects in the pipeline. At least 75 projects worth about $130 billion in potential investment faced political opposition during the first quarter of 2026, Axios reported.

Why have data centres become an election issue?

AI requires enormous computing power, which in turn requires large data centres. Those facilities need huge amounts of electricity, cooling capacity, land and supporting infrastructure.

Data centres accounted for about 4.4% of US electricity consumption in 2023, according to Axios report. That share could approach 12% by 2030, based on forecasts cited by the outlet.

The expected increase has created a direct connection between the AI boom and household electricity bills.

PJM, the largest US electricity grid operator, is already facing a major capacity challenge. Its July capacity auction for 2028-29 fell 6.8 gigawatts short of its target even after prices reached their maximum level, Reuters reported.

Large new electricity demand has outpaced new generation. PJM estimates that new large loads could add 70 gigawatts of demand by 2038. More than 50 gigawatts of power projects already have grid connection agreements, while another 220 gigawatts remain under evaluation in the PJM queue, Reuters reported.

The power crunch has encouraged developers to seek direct agreements with large electricity users, including data centres.

PJM has created a process to connect generators and large customers through bilateral agreements. More than 43 gigawatts of projects have been announced since 2025, most around data-centre hubs in Ohio and West Virginia, Reuters reported.

That power crunch can become an election issue because voters experience electricity costs directly.

PJM capacity prices have risen sharply in recent years, Axios reported, and utilities can pass higher power costs on to customers through their bills.

That makes the data-centre debate different from a conventional technology-policy argument. Voters do not need to understand how an AI model works to care about the price of electricity.

Water is another concern, particularly in rural areas.

Data centres consume far less water nationally than agriculture. In 2023, direct water use by US data centres amounted to less than 1% of the water used for agricultural irrigation, Axios reported. But the impact can be much greater locally, especially in communities already facing water shortages.

The Associated Press reported on August 26 that opposition to data centres has brought conservative farmers and ranchers together with environmental groups on the political left.

New Mexico provides one example. Oracle and OpenAI are building Project Jupiter, a planned $165 billion data-centre complex near the Mexican border. Local concerns have focused on water supplies.

A water-rights lawyer from a pecan-farming family told AP that farmers and ranchers were worried about their water rights in a state affected by drought.

Land has become another source of conflict. Large AI facilities require huge sites, and developers have increasingly looked towards rural America where land is more readily available.

That has brought projects into communities where residents are concerned about farmland, ranchland, forests and the character of their surroundings.

Some data centres can dwarf football stadiums and factories and consume more electricity than small cities, AP reported. Their scale has made them increasingly visible to local residents and voters.

Why are Republicans and Democrats both changing their stance?

Pennsylvania offers a clear example of how quickly the politics have changed.

Governor Josh Shapiro, a Democrat who previously promoted data-centre investment, announced new requirements for such projects on August 18. Developers must demonstrate that they can pay the full cost of their electricity, use technology to limit water consumption and obtain local approval before seeking state approval.

Shapiro called the measures the “strictest guardrails in the nation”.

His Republican opponent, Stacy Garrity, has attacked him over the issue, illustrating how data centres have shifted from an economic-development question to an election issue.

Texas presents a similar shift from the Republican side.

Governor Greg Abbott previously promoted Texas as a major centre for AI development. He also appeared with Google executives to announce a $40 billion investment in the state, reported AP.

But Abbott has since adopted a more cautious position. He ordered regulators to ensure that Texans did not face higher electricity bills because of data centres and said he would seek tougher rules and consider removing the state’s tax break for the industry, Fortune reported.

Democratic challenger Gina Hinojosa has used the issue in her campaign against Abbott, targeting rural voters concerned about ranchland, water supplies and local communities.

Ohio has become another important battleground.

The National Republican Senatorial Committee privately warned major AI companies that opposition to data centres could hurt Republican Senator Jon Husted’s chances of holding his Ohio seat, Axios reported. The memo said Democrats had made data centres a “centerpiece” of their campaign against Husted.

The warning illustrates the wider concern inside the Republican Party: if a candidate closely associated with data-centre development loses, politicians elsewhere may become more reluctant to support new projects.

The backlash has also reached congressional races.

A majority of competitive House districts in the 2026 election have data centres under construction or in the planning stage, according to Axios. The outlet also found that every congressional and gubernatorial advertisement it had tracked that mentioned data centres opposed them.

The New York Times reported on August 23 that opposition to data centres had reached House, Senate and governor’s races. Campaign advertisements in Texas, Ohio, Michigan, Wisconsin and Pennsylvania have used the issue to attack candidates associated with the AI infrastructure boom.

Can jobs and investment counter the backlash?

Data centres still have powerful political supporters. US President Donald Trump remains one of the industry’s strongest backers. He has continued to defend data-centre construction despite opposition from politicians in both parties, AP reported.

Trump has said that large projects bring substantial employment and tax revenue. He also views data centres as part of the US effort to maintain its lead over China in artificial intelligence.

His administration has pushed measures designed to help technology companies build facilities and connect them to power plants and high-voltage transmission lines, AP reported.

The economic argument is substantial. Data centres accounted for more than $21 billion in private construction spending in the US over the previous year even as the broader construction industry contracted by more than $100 billion, Axios reported.

The projects also create construction jobs, giving the industry an important source of political support.

The Wall Street Journal reported that building-trade unions have become a counterforce to the anti-data-centre movement. Unions and construction groups argue that blocking projects could put thousands of construction jobs at risk.

Steamfitters UA Local 602, which represents workers in Virginia, Maryland and Washington, D.C., told members it would not support politicians who oppose data-centre projects, according to the Journal.

In Kansas, a union representing HVAC and railroad workers broke with its previous political pattern to support Republican state Senator Ty Masterson for governor, partly because his Democratic opponent opposed data-centre construction, the Journal reported.

The economic benefits also extend beyond construction. Data centres can generate tax revenue for local governments, although the industry often receives tax incentives to locate projects in particular states or communities.

That has created another point of tension.

Opponents question whether taxpayers should subsidise facilities that consume large amounts of electricity and water. Supporters argue that investment, construction activity, jobs and tax revenue can benefit communities over time.

Some states have already begun reconsidering those incentives.

Several states have stopped sales-tax exemptions for new data-centre projects, AP reported. Others are considering requirements that data centres pay for their own power, limit water consumption, disclose more information and secure greater community support before receiving permits or tax benefits.

New York Governor Kathy Hochul, a Democrat, ordered a one-year ban on large data centres, AP reported.

Why is the AI power debate becoming a broader political problem?

The environmental debate adds another layer to politics. AI’s growing electricity demand has contributed to a construction boom in natural-gas power plants. Environmental groups and companies with clean-energy targets want data centres to use cleaner sources of electricity.

Michigan, Oregon and Minnesota have passed laws in the past 18 months protecting requirements for utilities to use emissions-free energy sources by 2040, AP reported. Similar legislation was under consideration in California in August.

That leaves politicians facing competing pressures.

They want the investment and jobs associated with the AI boom. But they also face voters concerned about electricity bills, water use, land and changes to rural communities.

Importantly, opposition to data centres does not necessarily mean opposition to AI itself.

The political fight is increasingly about who pays for the physical infrastructure required to build the AI economy.

A data centre may bring billions of dollars in investment and thousands of construction jobs. But residents may also face questions over electricity capacity, water consumption, tax incentives and land use.

That is turning what was once largely a technology and economic-development issue into a local political one.

For technology companies, the risk is clear. A project that once needed land, financing and a power connection may increasingly need local political support as well.

For politicians, the calculation is equally difficult. Supporting a data centre can bring investment, construction jobs and tax revenue. Opposing or restricting one can appeal to voters worried about power bills, water, land and the broader impact of AI.

There is also a timing problem. Data-centre projects can take years to build, while elections operate on much shorter cycles.

A project may promise large economic benefits in the future. But voters facing higher electricity bills or pressure on local water resources may judge those costs much sooner.

That is why data centres have become an unexpected issue in the 2026 midterms.

The AI race was once largely about chips, models and software. It is now increasingly about power grids, water supplies, farmland, construction jobs and household electricity bills. And that could make the infrastructure behind AI one of the issues shaping key US races in November.