Silicon Valley’s Very Bad Night

· The Atlantic ·

6 min read Original article ↗

For years, public anxiety and frustration over AI have been mounting. More than 80 percent of Americans think the technology is moving too quickly, and more than 70 percent oppose data-center construction in their area. Meanwhile, tech companies have spent hundreds of millions of dollars on this election to combat regulations and candidates they deem a threat. Yesterday, months of skirmishes between these two political forces culminated, for the first time, in a nationwide contest. All over the country, Silicon Valley was on the ballot. And for the most part, Silicon Valley lost.

Residents of at least 10 states voted on dozens of proposals to restrict data-center development—local moratoriums, new zoning regulations—and several towns recalled mayors accused of putting the interests of data-center companies over those of constituents. Democratic candidates in some of the most consequential Senate races, including Abdul El-Sayed in Michigan and Sherrod Brown in Ohio, made AI and data-center regulation central to their campaigns. In California, the home of Silicon Valley, residents voted on a proposed “billionaire tax” that tech executives came out in droves to oppose.

Again and again, Americans repudiated the AI boom and Silicon Valley, while candidates who made a point of blasting the tech companies won easily. Dozens of bans and restrictions on data-center development sailed through at the local level, and at least nine governors who support a statewide data-center ban will be in office next year. “The titans of Silicon Valley dig bunkers for themselves and warn that the artificial intelligence they’re creating risks human extinction,” Senator Jon Ossoff of Georgia declared in his victory speech. His job, he said, will be to bring “Big Tech to heel.”

For a quarter century, tech companies have been able to marshal capital and connections to beat back meaningful regulation with relative ease. In 2024, crypto spent more than $100 million to crush a slate of candidates, including Brown, then a three-time incumbent. But such wealth and influence have perhaps grown too great—yesterday’s results show that reining in Silicon Valley is now an urgent and galvanizing issue in our politics. Although federal regulation seems unlikely under a Trump presidency, towns in Ohio, Illinois, Kansas, Florida, and elsewhere passed anti-data-center measures, including temporarily banning or advising city governments to ban new data-center construction. More than 30 of these referenda passed, in red and blue counties alike; only one so far, to my knowledge, failed, in North Dakota. And at least three mayors, in Oklahoma and Ohio, were recalled for their prominent support of local data-center projects. (As Elon Musk posted on X last night, “Data centers in space looking pretty appealing right now.”)

Meanwhile, the candidates who ran on strong AI-regulation platforms swept the night. Less than a month before the election, El-Sayed, the Democratic nominee for Senate in Michigan, launched a plan to get “AI Under Control” and made the technology central to the final stretch of his campaign. “This is the existential crisis of our time,” El-Sayed told The New York Times. In Ohio, Brown put tech regulation front and center in his campaign while erecting billboards that painted his opponent as the “face of data centers.” Elsewhere, Gina Hinojosa crushed Greg Abbott in the race for governor of Texas in part by criticizing his support of—and late, unconvincing flip-flop on—data centers. New York Governor Kathy Hochul, after passing the first statewide data-center moratorium, won reelection with ease. In Pennsylvania, Democrats harped on data centers to flip four seats and take control of the state Senate for the first time in decades.

Just how much weight AI carried in many of these victories is hard to ascertain, of course. The technology was the top issue for less than 1 percent of voters in a September New York Times poll. Inflation, the war in Iran, and the flaws of individual nominees likely played much larger roles than AI for many people; many of the candidates who won and were harshest on tech were also Democrats benefiting from outrage at Trump’s presidency. But another reason it’s hard to discern how data-center sentiment shifted votes is because of how popular data-center skepticism has become over the past year, both on the left and on the right. Ohio’s Jon Husted and Michigan’s Mike Rogers are two of many Republicans who tried to distance themselves from the data-center industry.

These victories for critics of AI and data centers (and crypto, too) are part of a broader shift against Silicon Valley over the past half decade. There’s a global techlash under way: antitrust investigations in the U.S., strict privacy regulations in Europe, social-media lawsuits and bans around the world. Still, for the most part, Silicon Valley has been able to use its wealth and influence to beat back any substantive opponents or regulations in the U.S. This week, that playbook failed. Tech companies and executives poured hundreds of millions of dollars into Trump’s super PAC, inauguration fund, ballroom renovation, and other pet projects. Crypto and AI super PACs have spent still more, some $250 million, on this year’s federal elections, while Elon Musk alone has poured close to half a billion dollars into the midterms. Many of the candidates they spent the most on in competitive races lost; that use of wealth to buy power may be exactly what Americans voted against.

The success of various anti-data-center ballot measures and candidates can be understood as a repudiation of Silicon Valley as much as one of the White House. The president has given both crypto and AI his blessing, and recently launched something of a pro-data-center tour, writing on Truth Social that the only reason communities “should not want Data Centers is if they want to end up being backwards and poor.” (Many of the data-center moratoriums were passed in counties that voted for Trump in double digits in 2024.)

But the proposal that most explicitly challenged Silicon Valley’s wealth—a literal wealth tax on billionaires proposed in California—appears poised for defeat. The measure, called Proposition 40, would have been a onetime tax on billionaires’ wealth to make up for cuts to the state’s health-care program in the One Big Beautiful Bill Act. Tech investors and entrepreneurs, many of them billionaires, donated more than $300 million to defeat the measure, framing it as an existential threat to the state’s start-up ecosystem. Still, that a wealth tax came close to passing at all—and until a recent adversarial blitz polled favorably—in the state home to, and traditionally proud of, an industry built on the promise of amassing wealth is itself indicative of the most fundamental concern underlying the techlash.

Even before yesterday’s election, Silicon Valley was fretting about 2028. Tech firms have been clamoring to get Democratic consultants on the phone and coming up with all manner of ideas to quell the data-center backlash. OpenAI’s head lobbyist, Chris Lehane, has been reportedly circulating a memo among lawmakers in Washington predicting that AI will be a defining issue of the 2028 election. The memo, obtained by Politico, begins, “We already know the number-one issue of the 2028 presidential election: AI. What we don’t know is how it will show up.” Tuesday’s results suggest otherwise.