Analyst says Democratic wins could slow U.S. AI data center expansion

Stocks fall after Democratic wins

Yahoo Finance reports that AI-linked shares dropped on Wednesday after Democrats won a majority in the House and Senate on Tuesday night and gained governorships in key states. Among the stocks that moved lower were Elon Musk-led SpaceX, which trades under the ticker SPCX, and Tesla, which fell 4% before trimming some of the loss as the broader market rose. CoreWeave, IREN and Vertiv also traded lower.

Ives says legislation could face delays

According to Yorkville partner and managing director Dan Ives, the election result will slow AI build-out in the U.S. over the next two years. He wrote on Wednesday that Democrats controlling Washington, especially the Senate, would create "major hurdles" for AI and tech legislation. Yahoo Finance says Ives is one of Wall Street's biggest AI bulls.

Impact on planned data centers

Ives said those political hurdles could slow the pace of 800 to 1,000 planned AI data centers across the country. He said the biggest concern for tech investors and the AI trade is Texas, which he described as a major source of data center power and capacity. In his view, about 25% to 30% of data center gigawatts and capacity will come from the state.

Texas and SpaceX cited as key concerns

Yahoo Finance reports that Democrat Gina Hinojosa won the Texas governor race over incumbent Greg Abbott in a surprise result. The article says Abbott currently has a moratorium on data centers in Texas, and the expectation had been that it would end if he won again. Ives said Hinojosa is known for opposing data centers and is negative on AI build-out, which he said makes the outlook in Texas a real issue for tech investors. He added that SpaceX and Musk are "caught front and center" in what he called this situation, and said there will be negotiations and politics around the issue in Texas.

Musk responds online

Musk posted on X after the election results, writing that space-based data centers looked more appealing. Yahoo Finance says the article also notes that data center expansion has become a major issue in the 2026 midterm elections, with candidates facing public opposition to proposed sites, the power infrastructure needed for them, and concerns that higher electricity demand could increase consumer costs.