BofA Securities: With Democrats controlling the U.S. Congress, data center regulation becomes a focus

BofA Securities released a research report stating that U.S. mainstream media have confirmed a Democratic victory in both the Senate and the House of Representatives. A Democrat-controlled Congress is expected to intensify hearings and oversight across multiple federal policies, but given the president's veto power, legislative changes over the next two years will be limited, though there could be a substantive impact on data center construction and social media regulation. The bank noted that given the unprecedented scale of planned capital expenditure by large technology companies, data center regulation could become a post-election policy focus. New federal regulations are expected to face presidential veto, but Democratic victories in key data center states such as Texas could constrain the pace of future expansion. The bank believes that while capacity expansion plans may continue over the next 12 months and hyperscale data centers could shift to more receptive states, the market may view rising construction costs and constrained future expansion as risks to AI innovation and industry revenue. Regarding social media regulation, child safety has become a bipartisan concern, with limited federal policy changes expected in the near term, but state-level regulation and litigation could pose near-term risks. As for antitrust, the bank believes that since the Federal Trade Commission and the Department of Justice will continue to be led by the Trump administration, the likelihood of major changes is low. Additionally, on tariffs, no significant changes to the existing tariff landscape for e-commerce are expected.