AI’s No-Good, Very Bad Election  

Elon Musk’s vast wealth is often described in hypotheticals — by imagining the good things he could do with all that money, but doesn’t. Like paying the salaries of every American made jobless by artificial intelligence, or staving off a global famine. Musk prefers spending his money more selfishly — buying social media networks, making flamethrowers and race cars that briefly go upside-down — but over the last few months he provided a public service by spending nearly half-a-billion dollars on the midterms. Not only did all of his biggest bets all lose, but his high-profile involvement actively hobbled them. It would have benefited Ken Paxton and Greg Abbott more if he had stuffed the money into one of his missiles and shot it at Mars.

It is no mystery why Musk and the wider tech industry cared so much about this election. The future of Silicon Valley’s data center build-out was on the ballot across the country. And in nearly every case where the voters had a direct say, they opposed the industry, both by electing anti-data center candidates and, in nearly 50 referenda, pumping the brakes directly. “Expect moratoriums starting in January,” one industry informed The New York Times’ DealBook.

For Musk and his fellow tech titans, the stakes were highest in newly sapphire Texas, where pro-data center donors and SuperPACs combined forces with Musk to shower Paxton and Abbott with more than $200 million. The Lone Star State isn’t just where Musk incorporated Tesla and SpaceX, it is the country’s data center powerhouse and leader of the 10 states that together contain 70% of current and planned data center capacity. Lose Texas (and other big data center states like Ohio and Georgia) and the entire project begins to falter. As these states fell to data center critics on Tuesday night, shares in AI and chip companies started to fall, as did the value of the so-called neoclouds that provide “compute” to AI firms. The AI industry was already facing serious problems, but those now exist in a political world that reflects profound public anger and distrust. The industry phrase for what the election introduced — “regulatory headwinds” — is an understatement. 

As Musk feared, the reversal of A I  fortunes will be most dramatic in Texas. The new governor, Gina Hinojosa, ran an anti-data center campaign that resonated so strongly with voters, a back-footed Abbott was forced to pump the breaks and promise stronger regulations. But it wasn’t enough. The permissive environment created by the Texas GOP will end when Hinojosa appoints her own judges to the state business court, regulatory agencies and utility commissions. (The state’s new attorney general, meanwhile, has called for investigating SpaceX).

Similar stories unfolded in other data center heavies like Ohio, where Sherrod Brown and Amy Acton both soundly defeated pro-data center candidates. Georgia’s governor-elect Keisha Lance Bottoms won on a moratorium platform, and in South Carolina, Annie Andrews taunted Darline Graham by calling her “Data Center Darline” and shining a light on her support from the data center PAC Building the Future. 

Anger over data centers also powered a number of successful Democratic Congressional campaigns. In Illinois, a Sunshine Movement co-founder named Will Lawrence flipped his seat on the strength of a platform he called Stop Tech Overreach, which called for an immediate halt to data center construction, artificial intelligence development and the creation of a jobs program funded with taxes on surplus AI profits. 

“Democrats running in more than 130 federal and gubernatorial races aired anti-tech or anti-data center ads this cycle,” reports Dave Weigel in Semafor. So, too, did candidates further down the ballot, including those for utility commission positions in states where they are still elected. The backlash even smashed through gerrymandered districts that were designed to withstand it. In Florida’s 14^th — redrawn by the state GOP in May — the pro-data center Republican fell to Democrat Kathy Castor, who “strongly opposed data centers in the Tampa area [and] warned that the facilities could drive up her constituents’ utility costs while straining local water supplies,” according to Grist.  

The morning after the blowout, Musk grumbled on X, “data centers in space looking pretty appealing right now.” When a professor at Utrecht University replied by reminding Musk of the scientific obstacles to placing data centers in orbit, Musk responded, “You are fully retarded.”

It’s understandable that Musk is upset. He and his Silicon Valley colleagues are facing a crisis that is much bigger than the fate of data centers in Texas and Ohio. Over the last four years, they have hitched themselves to a MAGA cult that has come apart at the seams. In the process they revealed themselves to be profoundly corrupt, antidemocratic and even anti-human. As Jason Koebler observed at 404 Media, on trial this Tuesday was an entire worldview in which 

the masses must shut up and suffer while oligarchs centralize power, self-deal, spend wildly to capture the political process, and automate away human endeavors so they can amass yet more wealth. [This] was wholly repudiated in Tuesday’s election as people in Red States, Blue States, and Purple States rejected the cruelty, corruption, and depravity economy we’ve seen over the last few years… Up and down the ballot, in all states, voters were generally given the choice between largely normal people trying to fight for the working class and sycophantic cartoon supervillains, nepo picks, fumbling buffoons, and Twitter trolls seeking to enable the regime and Big Tech’s vision of the future, where AI CEOs become trillionaires and everyone else loses their job to a robot and breathes methane gas from the data centers in their backyards.

Read the rest of Koebler’s essay here, and learn more about the problems with data centers in space here.