Lates News

US midterm elections show voters oppose data center construction, with 40 of 41 local ballot measures restricting data center construction expected to pass. Although Microsoft (MSFT.O) and Amazon (AMZN.O) have both invested heavily in data centers, they are currently down about 2.5% and 1.5% respectively, with declines notably smaller than those of stocks across the industrial chain such as AI cloud computing companies, data center equipment and power suppliers, indicating that large tech companies are relatively resilient. The market believes that the massive capital expenditure on data centers and the excessively high costs of chips and supply chains mean investment returns are not yet sufficient to justify continued expansion, and a slowdown in construction helps ease capital expenditure pressure and improve free cash flow. Going forward, attention needs to be paid to the AI and data center regulatory agenda after Democrats take control of Congress, and to how the newly elected Democratic governors of Texas and Ohio will implement their campaign pledges to restrict data center construction.