Voter referendum roadblocks and power grid queue delays: Amid nationwide political backlash, has the "AI trade" been declared over?

Author: Ozeco, Crack The Market

Translated by: TechFlow

TechFlow Summary: As election results roll in across the United States in November, including multiple referendums and local elections, public opposition to the expansion of AI data centers has reached unprecedented heights. Exit polls show that 76% of respondents explicitly oppose building data centers in their own communities, while policy dynamics are subtly shifting in key compute hubs like Texas and Georgia.

This widespread community resistance, coupled with a sharp pullback in the semiconductor and hardware infrastructure sectors, has triggered widespread panic on Wall Street over whether the AI capex cycle has peaked.

However, looking past the panic, existing compliant construction projects scheduled for delivery before 2027 remain on track. The real compression is concentrated in long-term plans spanning 2028 to 2030.

This political backlash does not end the AI narrative; rather, it is redefining the allocation logic for compute assets.

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

Note: This article was written at the onset of the sell-off. By Thursday's U.S. market close, the Philadelphia Semiconductor Index (SOX) plummeted nearly 10% in a single day, retracing 37% from its historical highs. The Nasdaq fell 4.6%, and Vertiv tumbled 14%.

Meanwhile, Digital Realty and Equinix, which hold ready-made power capacity, dipped only 4% to 5%, remaining roughly 13% away from their historical peaks.

On November 3, U.S. voters across the country were asked 41 times about their views on data center construction, with answers showing near-unanimous consensus: national exit polls indicate that 76% of respondents explicitly oppose building data centers in their local communities.

In this election, Democrats won the governorship in Texas, currently the single largest compute hub by planned capacity nationwide; meanwhile, Democrats also gained control of Georgia's public utilities regulatory agency.

The market's initial reaction was to view this as a fatal threat to the AI construction cycle, but I believe this represents a completely flawed analytical framework.

Projects already under construction will continue; what is affected is forward-looking supply coming online after 2028. These assets are being repriced, which precisely makes existing compute facilities with ready-built power capacity more valuable.

Does this election signal the end of the AI trade? The answer is no. The election does not change demand itself, but rather determines who gets to profit and when.

Regarding AI infrastructure development, there are currently two distinct yet simultaneous battles unfolding:

State-level negotiations over who will foot the bill for grid expansion can ultimately be resolved through financial settlements, and are expected to be settled by mid-2027.

However, local community debates over exactly where these compute facilities will be built cannot be compromised with money. It is this very friction that will tightly suppress actual supply below plan projections for 2028 to 2030.

Will Compute Construction Halt? 2027 Under Construction Projects and Texas Slowdown

Will compute construction halt indefinitely? No.

From an underlying engineering tracking model perspective, all projects slated for delivery by the end of 2027 are already in substantial construction phases. Approximately 87 gigawatts (GW) of compute facilities are currently under construction nationwide, with net additions of 7 GW during October alone.

The earliest cracks of slowdown appear in Texas. As the hub with the largest planned capacity, Texas saw new ground-breaking volume plummet sharply from 3.4 GW in September to just 0.6 GW in October.

Scale of Forward Supply Delays: Reassessing 2028 to 2030 Plans

How much capacity will face delays? What is truly exposed to risk is the pipeline spanning 2028 to 2030.

My estimated range is approximately 10% of delivery volumes under moderate schedule slippage; if local authorities impose strict moratoriums, the delay ratio could reach 28%, though I lean toward the lower end of that range.

The first industry model adjustment following the vote has already downgraded these forward deliveries by roughly 11%.

Stranded Capacity Hits Record: The Wide Gap Between Nominal Plans and Actual Deliveries

How many plans will be outright canceled? Stalled "stranded capacity" nationwide due to approval bottlenecks and queue standstills has reached a record 61 GW, accounting for roughly 13% of total planned pipelines, jumping by 9 GW in October alone.

While this figure seems alarming, investors often overlook a simple fact: in the grand blueprints publicly announced by major tech giants, only about 30% was ever destined to materialize on time before 2030. Nominal figures splashed across front-page headlines have never reflected true supply scales.

The vast majority of substantive damage stems from schedule delays: Of the 51 GW of projects announced in January targeting 2027 commissioning, a staggering 31 GW have been pushed to 2028 or later, while another 9 GW have been formally withdrawn, canceled, or shelved.

Divided Public Opinion and Existing Trust: The Treatment Divergence Between New and Legacy Sites

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

However, in mature communities where data centers are already operational, voter support outweighs opposition at 49% to 42%. Provided projects commit to self-powered generation, offer community benefits, and preserve local veto rights, they garnered a 64% approval rate across various proposal comparisons.

Could ongoing construction projects be halted? This remains the largest current exposure risk. In Ashville, Ohio, nearly 82% of voters cast ballots to revoke an agreement for a campus already under construction. While a single town does not dictate national trends, this marks the first real-world stress test targeting active developments.

Who Captures the Ultimate Returns: Repricing of Existing Assets with Ready-Made Power

Why did related hardware stocks plunge so dramatically? Beyond political headwinds, the market is pricing in expectations ahead of time for reduced construction scale and slowed capital expenditure in 2028.

On November 4, Vertiv, Quanta, and GE Vernova fell between 9% and 13% in a single day. Some infrastructure contractors saw their market capitalization shrink by nearly half within four weeks—clearly exceeding what pure construction scale reductions can explain—as market sentiment underwent a distinct shift toward risk aversion.

Who will ultimately capture commercial returns? Debates over who bears the cost can be resolved with capital, but community conflicts over facility locations cannot be compromised with subsidies.

This directly caps future incremental supply, granting established legacy assets with ready-made power approvals ("Power in Hand") enhanced monopolistic value and pricing power.