US voters lashed out at data centres. What does that mean for Australia’s AI ambitions?

This week’s mid-term elections in the United States saw huge swings to the Democrats, away from President Donald Trump’s Republican party.

One surprisingly important factor was a rising backlash to the ongoing boom in data centre development triggered by the rise of artificial intelligence (AI) in recent years.

Americans across ten states overwhelmingly voted in favour of candidates campaigning for local restrictions on data centres.

According to exit polls, some 56% of voters said AI data centres were a crucial or major factor in their vote.

The data centre push

The results are a sign of growing tension between America’s ambition to lead in AI and the willingness of local communities to host the infrastructure needed to support it.

The Trump administration has touted data centre expansion as a core pillar of American technological leadership and economic growth. In July 2025, President Trump signed an executive order to accelerate the development of data centres.

He has also warned that communities opposing them risk becoming “backwards and poor”.

In June alone, US$4.4 billion was spent on building data centres. This is a fivefold increase from November 2022, when ChatGPT was first released. Around 75% of data centres under construction are currently concentrated in Republican-led states.

However, signs of growing opposition to data centres were clear in the run-up to the midterms.

The data centre backlash

Pew Research showed American sentiment hardening against data centres between January and August this year. Most Americans believe data centres do more harm than good, citing concerns about energy costs, environmental pressures and noise.

Local communities have been especially sensitive to rising home energy prices during an affordability crisis. In areas located near US data centres, wholesale electricity prices have increased by up to 267% over the past five years.

Beyond these impacts to the hip pocket, opposition to data centres also reflects wider public unease about AI. Communities are asking what they stand to gain from AI if they are being asked to foot the bill.

The political cost

Many of the Republican states that Trump won in 2024 encouraged data centres through faster permitting, land use approvals and sweetheart tax deals. But as public opposition grew, candidates from both parties pivoted towards advocating for stronger data centre regulations.

Democrats are more likely than Republicans to view the impacts of data centres negatively. Democratic candidates were quicker to capitalise on the discontent and campaign for tighter oversight and restrictions. Democrat-led states including New Jersey, Michigan, Pennsylvania and Oregon have already introduced local bans or are debating statewide bans.

Republicans were slower to shift, facing tensions between local opposition and President Trump’s support for data centre development.

The 2026 midterms rewarded candidates who campaigned on a platform of restricting data centre buildouts. Gubernatorial races in Texas, Ohio and Georgia – all major growth areas for data centres – were won by candidates calling for pauses on new data centres.

As the Democratic sweep became apparent, US-based data centre stocks tumbled. States led by Democrats who support restrictions on data centre development account for around 45% of planned US capacity.

Tighter regulations could mean more project delays and increased costs. Investment may shift towards other jurisdictions or countries with more accommodating regulatory environments.

With the 2028 presidential election approaching, data centres and AI will likely become key battlegrounds. Lawmakers will be mindful of balancing global AI leadership against the mounting local costs of supporting AI compute.

Implications for Australia

Australia’s data centre market is significantly smaller than the US market, but it is growing fast. The backlash is growing, too.

In September, an A$1.2 billion data centre project in Sydney’s north shore was scrapped in the face of strong community opposition. In Melbourne, residents have used bins and cars to block the construction of huge power lines for a data centre project in West Footscray.

Australian data centre operator Firmus cancelled a planned stock market listing when interest from overseas investors faded. The company’s signature data centre projects in Tasmania face stiff local opposition.

The Australian government is developing mandatory national standards for large data centres. These will include requirements on energy and water use, project siting and community engagement. Restrictions on developments near homes and recreational facilities have also been flagged.

However, it is unclear how stringent the requirements will be and how they will interact with existing state and territory rules.

To be effective, the standards will need to address community concerns rather than simply add another layer of regulation and bureaucracy. Clear siting requirements, transparent reporting of resource use, stronger renewable energy commitments, and meaningful early consultation will be essential to winning community approval.

The US midterms demonstrated how data centres can become a potent political issue. If Australia wants to capture the opportunities of AI, it must also earn the trust of the communities expected to host the infrastructure.