Author: Ozeco, Crack The Market

Translation: TechFlow

TechFlow Introduction: With the results of multiple referendums and local elections across the United States in November, public sentiment against the expansion of AI data centers has reached unprecedented heights, with 76% of surveyed voters explicitly opposing the construction of data centers in their own communities. The policy scales in key computing hubs like Texas and Georgia are also undergoing subtle shifts.

This widespread community resistance, coupled with a severe correction in the semiconductor and hardware infrastructure sectors, has triggered a general panic on Wall Street regarding whether the "AI capital expenditure cycle has peaked."

However, beneath the panic, we can see that existing compliant construction projects scheduled for delivery before 2027 have not come to a halt; the real squeeze is concentrated on long-term plans from 2028 to 2030.

This political backlash has not ended the AI narrative but is instead repricing the logic of computing asset allocation.

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

Note: This article was written at the onset of the sell-off. When the US stock market closed on Thursday, the Philadelphia Semiconductor Index (SOX) plummeted approximately 10% in a single day, retreating 37% from its historical high, while the Nasdaq fell 4.6%, and Vertiv dropped 14%.

In contrast, Digital Realty and Equinix, which have existing power capacities, only fell by 4% to 5%, remaining about 13% below their historical highs.

On November 3, voters across the United States were asked 41 times about their views on data center construction, with answers showing overwhelming consistency: nationwide exit polls revealed that 76% of respondents were explicitly against building data centers in their own communities.

In this election, the Democratic Party won the governorship in Texas, which currently has the largest planned computing capacity as a single hub; at the same time, the Democratic Party also controls the public utility regulatory agency in Georgia.

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

Projects under construction will continue to progress; what is affected are the supplies coming online after 2028. These assets are being repriced, which precisely makes existing computing facilities with access to power worth more.

Does this election signify the end of AI trading? The answer is no. What the election changes is not the demand itself but who can make money and when.

There are currently two competing yet simultaneously occurring games surrounding AI infrastructure construction:

The state-level game regarding who pays for the grid expansion can ultimately be compromised with money, and this game is expected to be resolved by mid-2027.

However, the local community game regarding where these computing facilities are specifically built cannot be compromised with money; it is this resistance that will keep the actual supply from 2028 to 2030 firmly below planning levels.

Will Computing Construction Come to a Halt? Projects Under Construction by 2027 and Texas' Slowdown

Will computing construction come to a halt? No.

From the underlying inspection model of the engineering sector, all projects scheduled for delivery before the end of 2027 are currently in substantial construction phase, with about 87 gigawatts (GW) of computing facilities under construction across the United States, and in October alone, there was a net increase of 7 gigawatts in ongoing projects.

The first signs of loosening appear in Texas. As the hub with the largest planned capacity, Texas' new construction volume in October sharply slowed from 3.4 gigawatts in September to only 0.6 gigawatts.

Scale of Delayed Future Supply: Reevaluation of Planning from 2028 to 2030

How much capacity will be delayed? The real exposure to risk lies in the pipelines from 2028 to 2030.

My estimated range is that in a mild extension of timelines, about 10% of the delivery volume will be affected; if local authorities issue strict pause orders, the delay ratio could reach 28%. I am more inclined toward the lower end of that range.

The first industry model revision released after the voting has already marked down this batch of future delivery volumes by about 11%.

Stranded Capacity Hits New Highs: The Huge Gap Between Nominal Planning and Real Delivery

How much planning will be completely canceled? The "stranded capacity" in the United States due to approval and queue stagnation has reached a record 61 gigawatts, accounting for about 13% of all planned pipelines, with a jump of 9 gigawatts just in October.

This figure seems astonishing, but investors often overlook a fact: among the ambitious blueprints publicly announced by major tech giants, only about 30% can realistically be delivered on time before 2030, and the nominal numbers in headline news have never reflected the true scale of supply.

The majority of the substantive damage comes from delays: of the 51 gigawatt projects announced in January for 2027 release, as many as 31 gigawatts have been pushed to 2028 or later, while another approximately 9 gigawatts have been formally withdrawn, canceled, or shelved.

Public Opinion Split and Trust in Existing Assets: Treatment Divide Between Old and New Sites

Has the industry completely lost public acceptance? For newly proposed sites, the answer is largely yes: 76% of voters oppose the construction of new data centers in their communities.

However, in mature communities with existing data centers, the support-to-opposition ratio among voters is 49% to 42%. As long as projects promise to self-provide power, offer community benefits, and retain local veto rights, they have achieved a 64% support rate in various plan comparisons.

Is there a possibility that ongoing projects could be halted? This is the biggest open risk at the moment. In Ashville, Ohio, nearly 82% of voters voted to revoke an already underway park agreement. A single town may not represent the national trend, but this is the first real pressure test on ongoing projects.

Who Can Ultimately Benefit: Revaluation of Existing Assets with Access to Power

Why have related hardware stocks experienced such drastic declines? The market is, beyond the political resistance, already pricing in expectations of reduced construction scale and a slowdown in capital expenditures in 2028.

On November 4, Vertiv, Quanta, and GE Vernova fell 9% to 13% in a single day, with some infrastructure contractors losing nearly half their market value in four weeks, clearly exceeding the explanation scope of mere engineering scale reductions; market sentiment has obviously shifted to a risk-off mode.

Who will ultimately achieve commercial returns? The game over who pays can be solved with funding, but community conflicts over where facilities are built cannot be compromised with subsidies.

This directly limits future new supply and allows existing assets with power in hand to enjoy higher monopoly value and pricing power.