• Morgan Stanley (NYSE:MS) estimates that 12 gigawatts (GW) of planned US data-center capacity could be delayed by 2030 following Democratic midterm victories.
  • The bank expects new state-level requirements, particularly in Texas and Ohio, to slow project approvals.
  • 2027 projects are largely unaffected, but 4.9 GW in 2028 and a cumulative 12 GW through 2030 are at risk of delay.

Political Shift Threatens Data-Center Buildout

Morgan Stanley has flagged a significant risk to the US data-center construction boom: approximately 12 gigawatts of planned capacity could face delays by 2030. The warning follows Democratic victories in the November 3 midterm elections, which have put incoming governors in key states on a collision course with the tech industry. According to the bank’s November 4 analysis, 2027 projects are largely unaffected, but 4.9 GW of 2028 capacity is at risk, with cumulative exposure reaching 12 GW through the end of the decade. The estimate, which Morgan Stanley has not fully detailed in public commentary, underscores the growing tension between AI infrastructure demand and local political constraints.

Texas and Ohio Take Center Stage

Texas and Ohio are the immediate focal points. In Texas, Governor-elect Gina Hinojosa campaigned on a moratorium on new data-center approvals until lawmakers establish protections for residents, addressing concerns over electricity costs, water supplies, and labor practices. Outgoing Republican Governor Greg Abbott had already tightened scrutiny, including pauses on grid connections and permitting reviews, signaling that the backlash predates the Democratic win. In Ohio, Governor-elect Amy Acton supports a conditional moratorium unless developers meet requirements covering utility costs, union labor, transparency, and environmental standards. The sticking point: what exactly constitutes paying “100% of utility costs” remains unresolved, particularly regarding generation and transmission investment.

The political shift extends beyond these two states. Democratic gubernatorial victories in Georgia and other data-center markets have widened expectations of restrictions, with Goldman Sachs (NYSE:GS) estimating that states potentially imposing limits represent roughly 45% of planned US capacity, including about 25% in Texas. Those figures reflect geographic exposure, not predictions of blanket delays.

Market and Industry Implications

The warning has sent ripples through the data-center supply chain. Morgan Stanley identifies several developers with concentrated Texas exposure as particularly vulnerable, including Cipher Digital (NASDAQ:CIFR), MARA Holdings (NASDAQ:MARA), SEI (NYSE:SEI), and Galaxy Digital (NASDAQ:GLXY). Power producers such as Vistra (NYSE:VST), NRG Energy (NYSE:NRG), Constellation Energy (NASDAQ:CEG), and Talen Energy (NASDAQ:TLN) could also face headwinds from project delays, according to J.P. Morgan (NYSE:JPM). Cloud infrastructure providers Oracle (NYSE:ORCL) and CoreWeave (NASDAQ:CRWV) are flagged by Baird as exposed to potential construction slowdowns, while diversified tech giants like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL) may prove more resilient due to their geographic diversification and resources. Restrictions could even increase the value of capacity they already own or lease. Developers with less Texas exposure, such as Applied Digital (NASDAQ:APLD) and TeraWulf (NASDAQ:WULF), are considered relatively insulated by Morgan Stanley, though not immune to broader industry risks.

The Battle Over Who Pays

At the heart of the dispute is who foots the bill for the massive electricity loads data centers require. Ohio offers a precedent: in summer 2025, its utility regulator ordered AEP Ohio (NASDAQ:AEP) to establish a separate data-center customer class, allowing electricity charges to differ from those of existing customers. The latest political proposals extend that debate to the full incremental cost of serving new facilities, from generation to transmission. Residents’ concerns center on electricity affordability, water availability, and local influence over development. Texas ranchers’ water concerns featured prominently in the campaign, and incoming officials elsewhere have emphasized disclosure and protection against shifting infrastructure costs onto households.

The opposition is substantial. About three-quarters of voters opposed a new data center in their community, according to the AP Voter Poll, yet only about a quarter called data centers “crucial” to their congressional vote. The AP’s latest report cites Redbud Consulting’s count of 47 referendums in 44 municipalities across 12 states, with restrictions passing in 44 of the 45 contests with completed counting. The Data Center Coalition argues that moratoriums could deprive communities of revenue and manufacturing benefits, though that is the industry’s position, not a settled estimate of net economic impact.

Fragmented Future, Intact Demand

Morgan Stanley expects a more fragmented market—some states welcoming projects, others restricting them—while leaving the broader AI investment cycle intact. The bank maintains its outlook for resilient growth and continued AI spending, with restrictions changing execution risk and location rather than the ultimate appetite for AI. Federal support for AI development cannot by itself settle local approvals, as grid connections, tariffs, site selection, and tax incentives are largely controlled by state utility commissions, legislatures, and county boards. Some gubernatorial proposals will require legislative or regulatory action, not just executive announcements.

Other banks are also anticipating delays. UBS (NYSE:UBS) sees roughly 30% of expected 2028 additions at risk of being affected by data-center pauses, according to Reuters (NASDAQ:TRI)—a separate estimate with a different basis from Morgan Stanley’s 4.9 GW figure. The industry is responding politically: OpenAI published a community framework on November 5 calling for clear rules, resident protections, and broadly shared benefits, while the Data Center Coalition acknowledged the need to rebuild trust with communities and elected officials.

What to Watch

The decisive questions are whether incoming administrations impose actual moratoriums, how long they last, which approvals they cover, and whether existing projects receive exemptions. Those details will determine whether the headline’s capacity risks become construction delays, higher costs, or changes in project location. Most affected states have not imposed outright bans, according to J.P. Morgan’s assessment reported by Reuters. Until Morgan Stanley’s underlying research note is available, the 12 GW figure is best treated as a reported estimate of capacity exposed to delay, not a confirmed loss of US computing capacity. A Morgan Stanley spokesperson declined to comment on the methodology behind the estimates.

Correction: An earlier version of this article misstated the timing of the Ohio utility regulator’s decision. It was issued in summer 2025, not 2024.