Elon Musk's $500 Million Bet Bought Nothing as Voters Turn on Data Centers

Elon Musk donated roughly half a billion dollars to Republicans — and got "basically nothing" out of it, while all of his companies are now headquartered "in a state that has, remarkably, turned about as blue as it could possibly turn." That was Sean O'Kane's opening verdict on TechCrunch's Equity podcast, where he, Kirsten Korosec and Anthony Ha broke down what this week's midterm elections mean for the tech industry.

The numbers cut two ways. Voters across the country approved ballot measures imposing restrictions or moratoriums on data centers — almost all of those measures passed. Democrats, meanwhile, won races up and down the ballot, including the Texas governorship, where governor-elect Gina Hinojosa beat incumbent Greg Abbott after campaigning on restricting data centers.

What does the election change for data center builders?

O'Kane sees the Texas result as the sharpest edge of the new reality. Hinojosa "has spoken pretty openly about this being a campaign promise and something that she wants to focus on once she takes power," he said. With Democrats in office, he added, the consensus view in the tech world is that "this is going to mean we have a lot of roadblocks ahead for data centers."

Anthony Ha cautioned against overreading the ballot measures — they weren't on the ballot everywhere. But he flagged the undercurrent beneath the results: opposition to data centers crosses party lines, and Democrats proved more effective at harnessing it.

"It does seem like anti-AI and especially anti-data center sentiment was a big part of it," Ha said. "That seems like a pretty potent political force." His forecast: the next two years, and potentially beyond, will be harder for tech companies generally and hyperscalers and data center companies in particular — with 2028 already a looming question.

Why did data centers become a grassroots issue?

Kirsten Korosec drew a straight line from industry behavior to voter anger. Hyperscalers pushed projects through "very secretive" processes, "oftentimes requiring NDAs of elected officials or appointed officials, not sharing information about the scale of a project in very environmentally sensitive areas, including in the Southwest, where there's very much a water scarcity issue."

Her bottom line: "I don't think that the data center issue is what brought everyone to the polls and led to the quote-unquote 'blue wave.'" But Republicans, independents and Democrats alike saw the secrecy as wrong, and it motivated them.

How is the industry already responding?

OpenAI moved fast. The company just released what it calls a compute campus policy blueprint — and it drops NDAs, shares project plans and promises less secrecy. Korosec's read: "We're already seeing companies like OpenAI all of a sudden go, 'Actually, we can change our policies.'"

Her takeaway cuts to incentives. "When you put up either a regulatory certainty in the marketplace, or at least signals of going in that direction, then corporations will respond," she said. "If you don't do that, they will not necessarily do the thing that we hope that they will do."

Ha noted the blueprint doubles as a rebrand: data centers have become "such a toxic phrase" that they're now "compute campuses." O'Kane wasn't buying it. "This is ridiculous. Come on. It's not going to change anything," he said, questioning why OpenAI — "a company that likes to say that it's no longer focused on side quests" — is spending time on it at all.

What comes next for the builders?

Ha pointed to a second pressure: Wall Street. Investors are no longer excited about hyperscalers and AI companies spending heavily on new data centers and compute, which creates a financial incentive not to build.

That leaves the industry squeezed from both sides. Regulation will make data centers harder to build, and markets may not reward the spending. Yet, as Ha put it, to reach the scale these companies want, "they are probably going to need to build data centers somewhere." Where that somewhere is just became a much harder question.