Midterms Next Week, Control of Congress in Focus
The US will hold midterm elections on November 3, which will determine whether Democrats can retake control of Congress from the Republican Party led by President Trump. According to polls, Democrats are widely favored to win the House, while whether the Senate will flip remains more uncertain. During the first two years of Trump's administration, Republicans controlled both the House and Senate. Next week's elections could affect AI industry development and AI market trends. In addition to AI-related tech stocks, defense stocks and healthcare stocks, as well as financial stocks and cryptocurrency stocks, will also be highly sensitive to the election results.
Data Center Controversy Heats Up, 70% of Residents Oppose Nearby Construction
Data centers provide computing power for training and running AI models and are key to AI industry development. However, due to concerns over their electricity demand, utility costs, and potential local impacts, opposition to building data centers has surged across the US. An October poll showed about 71% of Americans oppose building AI data centers in their local area, far higher than the 53% who oppose nuclear power plants. The main reasons for opposition include the huge electricity consumption of data centers, with costs for upgrading substations and laying power grids potentially passed on to ordinary consumers' electricity bills; cooling equipment requires large amounts of water, which could lead to competition for water resources, pollution, and higher water bills; cooling equipment running around the clock will bring low-frequency noise pollution, and in the long term, data centers contribute limited local employment.
Trump Speaks Out, Pressures Companies to Give Back to Communities
The backlash against data centers among Americans has become one of Trump's political pressures. Trump said in an interview with TIME magazine that Europe and China are actively competing for data centers, and if the US does not build them, they will be built elsewhere, adding that he does not want China to acquire large amounts of data centers. Recently, Trump posted on Truth Social that if AI data center development is to be welcomed, companies building data centers should pay dividends to the communities where these facilities are located. Although it is generally believed that regardless of whether Republicans or Democrats win, any legislation is unlikely to pose a serious risk to AI investment, a sweeping Democratic victory taking both the House and Senate could bring tighter regulation.
Market Closely Watching Election, Blue Wave Could Hit Tech Stocks
Investors are closely watching state and local elections next week in Texas and elsewhere to assess the potential impact of election results on data center construction. Rick Meckler, partner at Cherry Lane Investments, said that if Democrats really ride a blue wave to a landslide victory, it would be negative for AI stocks, to some extent tech stocks, and even the market as a whole. In addition to AI-related and tech stocks, defense stocks and healthcare stocks may also be affected by election results. Any shift in Washington politics could affect the fiscal spending outlook and thus asset prices. A Democratic sweep of both houses could also bring stricter regulatory scrutiny, with Wall Street banks and cryptocurrency companies likely to bear the brunt.