The Vote Against the Data Center
On Tuesday American voters elected a Democratic Congress and in dozens of towns and counties they voted to ban or restrict the data centers that artificial intelligence needs. By Thursday the vote had reached markets around the world. In New York the S&P 500 fell 4.4 percent and the Nasdaq 100 fell 6.3 percent, the worst day for both since the tariff shock of April 2025. On Friday Japan's Nikkei closed more than 20 percent below its June peak and entered a bear market. The Korea Exchange halted trading for twenty minutes after the Kospi fell almost 9 percent at the open. SK Hynix, which makes the memory chips that go into AI servers, lost a tenth of its value in a day and TSMC in Taiwan fell almost 5 percent.
Voters in ten states decided 41 local measures on data center policy and the builders won only one of them, in North Dakota. Ohio alone held votes in 21 municipalities. Some measures banned data centers outright and others paused building, capped how much power a site could use or required a public vote before construction. The vote for Congress carried the same question. In the NBC News exit poll 56 percent of voters said AI and data centers were a crucial or major factor in how they voted for Congress.
The pattern of the losses shows what investors fear. Seoul, Tokyo and Taipei sold hardest because they make the chips and machines for data centers that may now not be built in Texas and Ohio, or not built as fast. Europe has few such companies and its technology shares barely moved. ASML, the Dutch maker of chipmaking machines, rose 4 percent. In Hong Kong the Hang Seng Tech index rose more than 5 percent on Thursday as Chinese tech companies rallied. Money is not leaving the world economy. It is leaving one bet on it.
The American numbers point the same way. In the month before the election the Nasdaq 100 fell almost 10 percent while the average stock in the S&P 500 rose more than 4 percent. Citadel Securities found the gap has been wider only in the dot-com years. Investors were moving from the giants into the rest of the market. The US economy is not weakening. American employers added 165,000 jobs in October, more than twice what forecasters expected. The US unemployment rate fell to 4.1 percent. The trouble is prices. US consumer prices rose 3.7 percent in the year to September, pushed up by the conflict in the Middle East. Traders now bet the Federal Reserve will raise rates in December. A rise would lift the dollar further and tighten money for every country and company that borrows in it.
So far the evidence points to the fall of one industry and not to a global downturn. The election made that fall sharper because it put a political limit on building. Two events next week will test that reading. On Tuesday the US publishes its October inflation figure, the last the Fed will see before it votes. And Anthropic, the American company that makes Claude, must decide whether to go ahead with a share sale meant to value it at about $1.5 trillion. Three investors told the Wall Street Journal the price must come down, one of them toward $1 trillion. If Anthropic cannot sell its shares at the price it wanted, the money for every new data center costs more, from Texas to Seoul.
For now the world's investors are not running from risk. They are asking what a data center is worth when the people who live next to it can vote it down, on a town ballot in Ohio and in the vote for Congress.