Source: Azeem Azhar, Exponential View
The 2026 midterm results triggered a $2.5 trillion selloff in AI infrastructure stocks as voters passed 43 of 44 local ballot measures restricting data centers. AI's permissionless expansion phase has ended. The incoming Democratic administration can negotiate durable community benefits—tax agreements, workforce programs, grid improvements—that make hyperscalers pay the actual social cost of their build-out instead of externalizing it. This shifts power away from pure speed-to-deployment toward jurisdictions willing to enforce friction, which could alter where and how AI infrastructure gets built.