Will the Democrats’ Big Win Stop the AI Buildout? — With Teddy Schleifer

Teddy Schleifer · The New York Times

Voter backlash against data centers is a near-national referendum, with 38 jurisdictions passing restrictions.

Schleifer argues the 2026 vote is as close to a national referendum on data centers as possible. Voters in at least 38 jurisdictions passed bans or restrictions on data centers, a result he calls a pretty good average for opponents. He notes the politics of this new industry are still being sorted out in real time, and that the backlash is clearly shared by many Americans across many places.

“this is as close to a national referendum as you're gonna get... 38 to zero is a pretty good average.”at 5:50

Teddy Schleifer · The New York Times

Data center industry will spend heavily on politics by 2028, after its super PAC's electoral losses.

The data center industry launched its first super PAC this cycle, which spent to help elect Darlene Graham in South Carolina, and she lost. Schleifer reads a super PAC as a sign of political headwinds. He argues campaign spending in this wave election did not really work because public opinion was already set. Still, with regular voters pushing the other way, the industry is only beginning to play offense, so he expects a ton of political spending on data centers by 2028.

“I think next 2028, I think there's gonna be a ton of spending politically on data centers.”at 7:31

Teddy Schleifer · The New York Times

Texas's embrace of data centers became a political liability that helped Democrat Gina Hinojosa win.

Schleifer notes Texas accounts for a large share of data center development, around 30% by a stat he saw, and that Governor Abbott embraced the issue. Democrat Gina Hinojosa used data centers as a millstone around Abbott and, he says, won based in part on that. He calls it an earthquake in Texas politics and a sea change for a state that had embraced the industry.

“that's an earthquake there... Gina Hinojosa has, like, really tried to use that as a millstone around Abbott and has been pretty successful or, you know, she won based in part on that.”at 19:57

Teddy Schleifer · The New York Times

Major Democratic AI reform is unlikely to pass with Trump in the White House, though guardrails are now more likely.

Schleifer argues that Trump remains president, so Democratic-led reforms would need both chambers to pass them and Trump to sign them, which he thinks is unlikely. He still expects more guardrails than before in legislation. He also says Democrats who ran on taking on the billionaire class, the AI industry and data centers will serve six-year Senate terms, so these positions are hard to reverse. Investigations are a likely channel for pressure, with the political calculus changing for tech companies.

“Trump is still gonna be in the White House... I think it's probably unlikely. But there's gonna be guardrails now in a way that there wasn't at least in terms of legislation.”at 8:43

Teddy Schleifer · The New York Times

Expects heavy congressional scrutiny of AI company CEOs, including subpoenaed hearings, not just bluster.

Responding to Senator Ed Markey's post about subpoenas for big tech executives, Schleifer says he does not think it is bluster and that some Republicans would likely join. He compares the likely format to the social media trials before Congress in the Trump and Biden terms. He expects a lot of scrutiny on all the AI company CEOs, though he is less sure these spectacles achieve much beyond public spectacle.

“I don't think that's bluster... I think there's gonna be a lot of scrutiny on all these AI company CEOs.”at 16:20

Teddy Schleifer · The New York Times

Musk's roughly $500M midterm spending was a dramatic failure, with significant political pain ahead.

Schleifer says Musk spent nearly $500 million, more than anyone has spent on an election when not the candidate. Republican spending operations lost, including in Texas, so Musk's side lost along with them, and Musk did more than anyone. He points to Musk deleting tweets and joking about his political spending as signs he knows it did not go well. He expects investigations into Musk's DOGE work, which likely would not have happened under a Republican Congress, so significant political pain is coming for him.

“this is a dramatic failure for him... he knows this did not go well. And I think there's gonna be significant pain for him politically going forward.”at 27:15

Teddy Schleifer · The New York Times

Billionaire-funded opposition likely killed California's one-time billionaire wealth tax; a ban measure looks set to pass.

The proposal was a one-time 5% tax on Californians with over $1 billion in net worth. Opponents raised over $330 million into a political nonprofit linked to Sergey Brin, with a massive advantage in paid advertising, while the pro-tax side barely campaigned. Schleifer says it looks like they killed it. A second tax proposition on the California ballot that would effectively ban such taxes in the future also looks likely to pass, giving billionaires downside protection.

“There was a pretty unprecedented campaign against it where over $330,000,000 was raised into a political nonprofit linked to Sergey Brin... and it looks like they killed it.”at 30:31