Goldman Sachs: Election Results Threaten Nearly Half of US Data-Center Buildout

Goldman Sachs estimates that nearly half of planned US data-center capacity could be affected by the 2026 midterm results, a forecast that landed the morning after Democrats swept Tuesday's elections. The bank's warning, tied to outcomes in Texas and elsewhere, turns a political story into an infrastructure and valuation question for the entire AI economy.

One VC told Business Insider it's hard to see how the result won't hit startup valuations from OpenAI down to smaller neolabs. "They will have trouble finding compute," he said. "This election result is definitely going to affect the AI economy."

AI data centers emerged as one of the top villains of the campaign. On X, owned by GOP megadonor Elon Musk, users joked about returning to an era of DEI, pronouns, and land acknowledgments.

How are MAGA-aligned VCs reacting?

Quietly. On Wednesday morning, some of the loudest venture voices on the right — a16z's Marc Andreessen and Craft's David Sacks, who also served as the White House's AI and crypto czar — said remarkably little. Left-leaning investors filled the vacuum. Darian Shirazi posted: "Remember when all the VCs in Silicon Valley endorsed Trump and said he 'made sense'? Quite stupid. Yeah, I wasn't one of them."

Reid Hoffman, the LinkedIn cofounder who donated nearly $40 million this cycle, delivered the sharpest read. "Voters rejected the status quo, and VCs should take that seriously," Hoffman told Business Insider. "Because some very notable and wealthy tech figures have so publicly supported the Administration as they've harmed Americans, tech's brand has lost massive amounts of trust. VCs should rethink their assumptions about how most Americans are experiencing this economy."

There was one bright spot for Silicon Valley's biggest political spenders. California's billionaire tax, opposed by John Doerr, Vinod Khosla, Ron Conway, Peter Thiel and others, looks headed for defeat.

What did Sequoia Capital just announce?

While the election dominated headlines, Sequoia Capital announced three structural changes: no more London office, no more Scout program, and no more Monday partner meetings. A person familiar with the firm's thinking said the Monday-meeting change is meant to let it move fast and make decisions quickly. Sequoia says it will still invest in Europe.

Because Sequoia sets the tone for the industry, the memo got attention across the continent's startup scene. Victor Riparbelli, CEO and cofounder of UK-based Synthesia, posted: "the sad reality is there just aren't enough deals in Europe to justify an office here."

Ann Bordetsky, a board partner at NEA and head of business development at Factory, saw a bigger signal. "Everyone's missing the real story in this Sequoia memo," she posted on X. "It's not the London office. You can win European founders in San Francisco because the companies are global from day 1. It's the no more MONDAY meetings, 24x7 deal cycle and decisions moving with the market rather than holding on to dated VC traditions, bravo."

Who wins and loses if data centers stall?

Betterment founder Sheel Mohnot sketched the market split on X: short-term winners Equinix and Digital Realty on scarcity; losers Nvidia, AMD, Vertiv and Oracle on less buildout. Long term, he sees Google, Amazon, Microsoft and SpaceX gaining moats, while Anthropic, OpenAI and other AI startups face pricier compute.

What else moved this week?

• SoftBank-backed Nigerian fintech OPay nearly went public in New York at a $4 billion valuation, then canceled the IPO.
• Jake Storm joins Headline as general partner after serving as a GP at Felicis.
• Blackstone told investors Anthropic might not receive an investment-grade rating after its IPO.
• Business Insider opened nominations for its annual Rising Stars of VC list.

Most VCs and founders would rather skip politics entirely. An LP who has backed many prominent funds put it bluntly during the 2024 race: "I've always wanted our VCs to just shut their mouths and do their job and not be political unless they're defending the startup ecosystem."

With compute costs, valuations and Sequoia's operating model all in play at once, staying quiet just got harder.

By Amara Osei