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Good Thursday morning! As the midterm results showed, America has a new public enemy. It’s large, makes a lot of noise, and can lead to higher electricity bills and less water. Know what I’m talking about? If you guessed “data center,” you would be correct.

After a seemingly never-ending midterm campaign season, we are finally done with elections. It’s time to see what the party in power will do now that the public has given such a clear mandate on data centers and AI at large.

Let’s get started.

— Jody Serrano

→ Data centers and the ballot box
→ Google tries to roll back decision to ban Search for schools that don’t want AI
→ The AI slop ads are here to stay

...and all the AI news we couldn’t fit here.

The news: The blue tsunami that swept the U.S. midterms left behind a resounding message about data centers: not in our backyard.

There were 47 ballot initiatives on data centers in Tuesday's midterm elections, according to Data Centers on the Ballot. As of Wednesday evening, 38 ballot initiatives in favor of restrictions had been passed.

Data centers formed a central piece of the elections even in places where they weren't on the ballot, appearing in candidate platforms and debates. In Texas, Democratic state Rep. Gina Hinojosa, who promised to institute a moratorium if elected, beat incumbent Republican Gov. Greg Abbott. The Republican once promised to make Texas "the epicenter of AI development."

Data centers also marked a stark difference between gubernatorial candidates in Georgia. Ultimately, Democrat Keisha Lance Bottoms, who is advocating for a statewide pause on data centers, beat Republican Rick Jackson, who would have allowed projects that had local support.

The takeaway: It's a new day for AI in America. The midterms are putting legislators in place at the local, state, and federal level who have a very different view about AI and data centers than President Donald Trump. An AI boom slowdown is all but guaranteed.

The news: Earlier this week, Google announced a policy that would effectively ban students from using Search if their schools opted not to use AI, with one executive stating that "Search and AI are deeply integrated."

The new policy, which Google framed as giving schools more control over AI, quickly drew ire online and garnered responses from people like Sen. Bernie Sanders and New York City Mayor Zohran Mamdani.

Google later came out to say that it was all a misunderstanding and that schools would be able to turn on Google Gemini, NotebookLM, and Search individually. Given that Google Search is now essentially "AI Search," this likely means that students will have a range of AI functions still available to them, even if their schools turn off specific AI services.

The takeaway: AI use in schools has prompted backlash over cognitive dependence and falling test scores. However, Google's stance demonstrates that limiting AI in the classroom completely might be impossible without banning technology altogether.

The news: The 2026 midterm elections featured AI ads on an unprecedented scale. According to an October report from the Wesleyan Media Project, campaign spending on ads generated or enhanced by AI surpassed $187 million, encompassing at least 289 unique ads.

In comparison, campaigns spent less than $50,000 on AI ads during the 2024 election season.

Of the ads analyzed by the Wesleyan Media Project, 82% were funded by Republican candidates or their allies, while 13% were funded by Democratic campaigns.

The takeaway: AI slop ads were all sorts of unsettling, featuring Satanic altars, a human pretzel (literally), and more. While they don't appear to have helped the Republican cause, this isn't the last we'll see of them—unless they get banned.

Pavlik and other market analysts view the midterm results as a win for AI companies, forecasting that a Democratic-controlled Congress will slow hyperscalers' massive spending.
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