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The 2026 Midterms and the Future of Tech Policy

The blue tsunami arrived. On November 3, 2026, Democrats won control of both the House and the Senate, flipping seven Republican-held Senate seats in Kansas, Iowa, Texas, Ohio, Maine, North Carolina and South Carolina …

Ry BealeyNovember 4, 2026 · 10 min read

A new Congress for the AI era

The blue tsunami arrived. On November 3, 2026, Democrats won control of both the House and the Senate, flipping seven Republican-held Senate seats in Kansas, Iowa, Texas, Ohio, Maine, North Carolina and South Carolina (NBC Washington). As of Wednesday morning, Democrats held 54 Senate seats to 44 for Republicans, with Mississippi and Alaska still too close to call (Forbes).

In the House, NBC News projects the party's largest majority in nearly two decades, built on more than two dozen flipped districts, some of which voted for Trump by double digits in 2024 (NBC Washington). Several of the night's most important wins came from candidates who ran directly against rising power bills and new data centers.

For the companies that build and run the internet, this is more than a change of party. Voters spent the year arguing about electricity, water and what AI is doing to their towns, and the results suggest they want more say over all three. Below is what the new majority is likely to mean for Big Tech, data centers and artificial intelligence, and what it will not change.

Big Tech: oversight first, legislation later

The first change is who holds the gavel. Rep. Frank Pallone (D-N.J.) is in line to lead the House Energy and Commerce Committee in 2027 and has promised a "bold agenda" to "rein in Big Tech," including a closer look at personalized pricing (IAPP). Sen. Maria Cantwell (D-Wash.) is expected to take Senate Commerce from Sen. Ted Cruz, and has called for a "bipartisan national AI framework" with consumer protections (PPC Land).

Expect hearings before bills. Democrats are likely to call executives to testify on social media addiction, AI and the local effects of data centers, and analysts expect "intense scrutiny of the FTC" for both what it does and what it does not do (IAPP). The FTC itself is short-handed: after the Supreme Court's June 29, 2026 ruling in Trump v. Slaughter let the president remove commissioners at will, the agency has two sitting members and three vacancies, which makes Senate confirmations and appropriations the new majority's main levers (PPC Land).

Privacy. A single federal privacy law is still unlikely before 2029. The Republican SECURE Data Act (H.R. 8413), which would replace state privacy laws with one federal standard, drew opposition from Pallone and 18 state attorneys general and has no Senate companion (PPC Land). The practical result is that the state patchwork stays.

Children's online safety. This is the likeliest area for a bipartisan deal. The House passed the KIDS Act (H.R. 7757) after a deal between Pallone and current chair Brett Guthrie, and Senate Commerce approved the Kids Online Safety Act on August 5 by voice vote. The open question is whether a final bill keeps the "duty of care" the House version dropped (PPC Land).

Data centers were on the ballot

Data centers went from a zoning question to a statewide campaign issue in 2026, and the side opposing new construction won almost everywhere it was tested. The driver was the power bill. Home electricity prices have risen more than 10% since 2024, according to the U.S. Energy Information Administration, and PJM's independent market monitor estimates that data centers will add $7.3 billion to ratepayers' capacity charges this year and $6.5 billion next year (Forbes). Before the vote, 71% of Ohio voters favored a moratorium on new construction, and 74% of Pennsylvanians said they would oppose an AI data center in their community (Forbes).

Three Democrats who campaigned on limiting data centers won governorships in states that host some of the country's fastest-growing capacity (WCPO):

  • Gina Hinojosa, Texas (defeated Greg Abbott, 57% to 41%, unofficial): a moratorium on new construction, stricter water and power rules, an end to industry tax breaks and an electricity rate freeze.
  • Amy Acton, Ohio (defeated Vivek Ramaswamy): a conditional moratorium under which new sites must cover all utility costs, use union labor and build on old industrial land, plus clawbacks of $1.6 billion in incentives.
  • Keisha Lance Bottoms, Georgia (defeated Rick Jackson): a statewide pause on new construction to study the effects on power bills, water and communities.

The local results were even more lopsided. Reason counted 41 data center measures on local ballots, most proposing bans, moratoriums or zoning limits, and the anti-data center side won all but two (Reason). Capital B reports that 77% of voters across the measures rejected development, with nearly 80% in Joliet, Illinois, and Harwood, North Dakota, as the industry's lone clear win (Capital B News).

Markets noticed. By late Wednesday morning, data center suppliers and operators had sold off sharply: Vertiv was down 12.3%, GE Vernova 10.6% and CoreWeave 8.2%, while Nvidia slipped 1.7% (StockTitan).

The issue's weight should not be overstated. Only 3% of voters in an NBC News poll named AI data centers the most important issue facing the country, and Democrats who featured data centers in their ads tended to do slightly worse than those who did not, likely because candidates in both parties had turned against them (Reason). Cost of living, not data centers as such, was the plurality concern.

Artificial intelligence: the states keep the pen

The clearest federal effect on AI is what will not pass: preemption of state AI laws now looks unlikely for at least two years (PPC Land). Congress had already resisted it, voting 99 to 1 in July 2025 to strip a proposed 10-year state AI moratorium from a budget bill, and a later attempt in the defense bill also failed. President Trump's December 11, 2025 executive order, "Ensuring a National Policy Framework for Artificial Intelligence," remains in force. It created a Justice Department task force to challenge state AI laws, tied broadband (BEAD) funding to states' AI rules and asked the FCC and FTC to consider preemption (PPC Land).

What Democrats are likely to pursue instead:

  • Investigations. Speaker-in-waiting Hakeem Jeffries is weighing a House select committee on AI with subpoena power, and Democrats are expected to probe AI companies, data centers and electricity prices (PPC Land).
  • Blue-state models. Analysts expect federal proposals built on laws from California, Colorado, Illinois and New York, focused on safety and automated decision-making. Rep. Manny Rutinel, a primary author of the Colorado AI Act, may join Energy and Commerce (IAPP).
  • Narrow bipartisan bills. The Stealth Bot Prohibition Act from Reps. Valerie Foushee and Laurel Lee has a better chance than broad frameworks. The AI Data Center Moratorium Act from Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez faces uncertain prospects (PPC Land).

The new majority is not united. Progressives such as Sanders and Rep. Greg Casar want to pause new data centers, while Rep. Scott Peters has called the AI debate "pretty populist, pretty devoid of fact" (IAPP).

The money did not buy much. The industry-aligned Leading the Future network spent $27.38 million in primaries, including $8 million against New York Assembly member Alex Bores, who lost his June primary. In the general election, its affiliates spent $4.8 million backing the Republican Senate nominee in South Carolina and more than $500,000 each on Republicans in Montana and North Carolina; all three lost. On the other side, the Anthropic-backed Public First did better with Democrats than Republicans, and Guardrails Alliance spent more than $1 million each against two candidates who lost (TechCrunch). As TechCrunch notes, the wave makes it hard to isolate what any of this spending did.

The states move first

With Washington likely to stall on broad rules, the real action in 2027 will be in statehouses and county commissions. More than 570 local restrictions or moratoriums had been placed on large data center proposals across 46 states as of October 15, led by New Jersey, Michigan and North Carolina, and at least 20 candidates in this year's 36 governor races promised some form of moratorium (Forbes).

Texas is the state to watch. Governor-elect Hinojosa's campaign has asked Gov. Abbott to issue an emergency order pausing new data centers until the Legislature meets; she has not taken office, and it is not yet clear whether a pause would reach projects already underway (StockTitan). Pennsylvania offers a different model: Gov. Josh Shapiro's executive order requires developers to "build, bring or buy" their own power capacity (Forbes).

State attorneys general are also expected to become more active on AI and privacy. In Texas, it is not yet known whether incoming Attorney General Nathan Johnson will continue the privacy settlements pursued under Ken Paxton (IAPP).

What the wave will not change

A Democratic Congress can investigate, confirm and fund, but it cannot write tech policy on its own (PPC Land):

  • The veto stands. President Trump can veto any bill, and an override needs two-thirds of both chambers.
  • The filibuster still bites. Most Senate bills need 60 votes, so anything durable needs Republican support.
  • The lame duck is open. The outgoing Republican Congress can still pass bills before January 3, 2027.
  • Executive action continues. The December 2025 AI order and the president's power to remove FTC commissioners both remain in place.

There is also a real case on the other side. Supporters of the buildout argue that data centers bring investment and tax base, and Reason's Christian Britschgi contends that Trump, "perhaps the only national politician to say positive things about data centers," is right about their benefits (Reason). And companies may not change course quickly. "I don't see the midterm election results significantly changing corporate behavior," one privacy analyst told IAPP (IAPP).

What this means for the businesses we serve

For most of our customers, nothing changes tomorrow. Your sites, servers and applications run the same way they did on Monday. What changes is the direction of travel, and it is worth planning around now.

Power is becoming a policy question, not just a line item. Voters in Texas, Ohio and Georgia chose leaders who want data centers to pay their full share of grid costs, and in some cases want to pause new construction altogether. Where those rules land will shape what new capacity costs and how quickly it comes online, especially here in Texas.

Location strategy matters more. If moratoriums or new siting rules slow construction in some states, capacity will become uneven across regions. Businesses that depend on a single region should review their redundancy and failover plans with that in mind.

Compliance stays local. With federal preemption off the table for now, state privacy and AI laws will keep multiplying. If you build or deploy AI features, plan to meet the strictest state rules that apply to your customers rather than waiting for one national standard.

We are watching these milestones and will share updates as they matter to you:

  1. January 3, 2027: the new Congress is seated, and committee chairs are confirmed.
  2. Early 2027: whether House Democrats create a select committee on AI, and what it investigates first.
  3. The next Texas legislative session: whether Governor Hinojosa's moratorium becomes law, and how it treats projects already underway.
  4. Children's online safety: whether the House KIDS Act and the Senate's Kids Online Safety Act are reconciled.
  5. FTC nominations: who fills the commission's three vacancies, and how the Senate handles them.

As always, if you have questions about how these changes could affect your infrastructure, our team is here to talk them through.

Sources

Results are as reported on November 4, 2026. Several races, including Senate contests in Mississippi and Alaska, were still being counted at publication.