Nov 6, 2026 · 1h 13m
Data-center backlash forces markets to rethink AI growth
You Ain’t Seen Nothing Yet with Daniel Clifton
The election exposed a collision between local resistance to data centers, ambitious AI investment plans, and a potentially friendlier backdrop for other markets.
- 1Local opposition to data centers is spreading as communities weigh electricity, environmental, jobs, and AI-displacement concerns.
- 2Investors may need to cut AI capital-expenditure forecasts as state-level resistance threatens the projects underpinning expected growth.
- 3Lower rates, oil prices, and political uncertainty could support broader markets even as AI-related construction faces a reset.
Don't miss
Clifton explains why the local backlash against data centers could force a major reset in AI investment expectations.
The brief
Daniel Clifton joins the hosts to assess how the midterm election changed Washington, markets, and the political coalition behind the next growth cycle.
The central conflict is local: communities worry about power prices, water, noise, ecology, and AI displacement, while developers promise jobs, tax benefits, and growth.
Clifton argues that opposition in states including Texas and Virginia could force investors to reduce AI capital-expenditure forecasts and separate compute owners from suppliers.
Louisiana offers a counterexample, using separate power arrangements, job creation, tax benefits, and clearer public messaging to advance projects that other communities reject.
The discussion widens to lower rates, oil and Iran, healthcare, drug pricing, and congressional trading, suggesting political change may help some sectors offset weaker AI construction.
What was said on this episode
45 statements · 21 positive · 17 negative · 2 mixed · 5 neutral
Trump’s political brand promised voters he would solve inflation inherited from Biden.
“Trump is a brand. And he's like, I'm going to solve Biden inflation.”
Listen at 2:49
- Daniel Cliftonon Political pollingNegative4:06
Special-election voting data is more reliable than polling for assessing political trends.
“polls are garbage. We used hard data.”
Listen at 4:06
The war accelerated an existing shift away from Republicans among voters.
“The war just seemed to like catalyze it and just put it on.”
Listen at 4:28
Rural voters oppose data centers despite declining unemployment and job creation.
“And they were still like, we don't want this. And it's rural voters.”
Listen at 5:05
Data centers are perceived as contributing to higher inflation.
“they also represent. higher inflation.”
Listen at 6:10
Gilead cured hepatitis C with a pharmaceutical treatment.
“Gilead, a pharmaceutical company, cured hepatitis C.”
Listen at 7:03
Gilead’s hepatitis C cure will save Medicare hundreds of billions of dollars.
“They are going to save Medicare hundreds of billions of dollars.”
Listen at 7:10
The market’s reaction to data-center concerns is directionally right but excessive.
“I think it's personally, it's the right reaction. It's overdone”
Listen at 7:53
- Daniel Cliftonon U.S. political realignmentNeutral16:10
The election’s political realignment could persist for several election cycles.
“This can hold for a couple of cycles.”
Listen at 16:10
- Daniel Cliftonon U.S. economic growthPositive17:08
Households would be $5.6 trillion richer under sustained 3% rather than 2% growth.
“American households would be $5.6 trillion richer if we had been growing at 3% rather than 2%.”
Listen at 17:08
- Daniel Cliftonon 2028 U.S. presidential electionNeutral18:14
The 2028 election could be a genuinely populist contest in both parties.
“in 28, you have a real chance for the first time to have a true populist election.”
Listen at 18:14
Democratic Senate victories represented a vote for political moderation.
“So this was actually a vote for moderation.”
Listen at 19:22
- Daniel Cliftonon Healthcare stocksPositive19:57
Healthcare stocks have strongly outperformed during the current political episode.
“healthcare stocks have been ripping through all this.”
Listen at 19:57
- Daniel Cliftonon U.S. budget deficitPositive21:57
The U.S. budget deficit will likely improve next year.
“The deficit's probably going to get better next year.”
Listen at 21:57
- Daniel Cliftonon Private-sector growthPositive22:23
Private-sector growth is needed to offset upcoming fiscal tightening.
“You need private sector growth to offset that fiscal tightening”
Listen at 22:23
- Daniel Cliftonon Data-center projectsNegative23:04
Local opposition, rather than higher-level officials, is causing most data-center cancellations.
“Most of these are getting canceled because of local opposition”
Listen at 23:04
- Daniel Cliftonon Data-center referendumsNegative23:26
Thirty-eight of forty data-center referendums opposed the industry.
“There were 40 referendums on the ballot on Tuesday on data centers. 38 of them went against the industry.”
Listen at 23:26
- Daniel Cliftonon Ohio, Georgia, and Texas data centersNeutral24:03
Ohio, Georgia, and Texas account for 40% of the data-center pipeline.
“the governor races were Ohio, Georgia, Texas, that's 40% of the entire chain of those data centers”
Listen at 24:03
- Daniel Cliftonon Virginia data-center projectsNegative25:18
Virginia policy changes led Blackstone and Amazon to withdraw data-center projects.
“Blackstone, within two days, pulls the largest data center project in the state. Amazon, two weeks ago, canceled four data centers that they already had zoned in Northern Virginia.”
Listen at 25:18
- Daniel Cliftonon Data-center-related stocksNegative26:31
Data-center-related stocks peaked relative to the S&P 500 when Virginia and Texas turned against projects.
“That's the day all the data center related stocks peaked relative to the S&P 500.”
Listen at 26:31
- Daniel Cliftonon Data-center companiesMixed27:51
Data-center companies may negotiate with local governments to revive blocked projects.
“I think the companies are figuring out, hey, can we go back into the town? Is there things that we can work out? Who can we pay?”
Listen at 27:51
Louisiana can isolate data-center electricity use from consumers through separate grid arrangements.
“they can go behind the grid. they can actually segregate the electricity away from the consumer.”
Listen at 28:15
Data centers pay property taxes that can reduce local property-tax burdens.
“if you have a data center, they pay your property taxes.”
Listen at 28:47
Loudoun County’s property-tax rate has declined for ten consecutive years.
“The property tax rate in Loudoun County has come down 10 years in a row.”
Listen at 30:10
- Daniel Cliftonon Data-center countiesPositive30:31
Data-center counties have roughly $20,000 higher home values per homeowner.
“The home value differential is like $20,000 per homeowner.”
Listen at 30:31
- Daniel Cliftonon Data-center capital expenditureNegative36:40
Investors should reduce capital-expenditure forecasts if data-center projects decline.
“You have to adjust your CapEx forecast. And if it's 10% down, you got to do that.”
Listen at 36:40
The S&P 500 has never declined over the twelve months after a midterm election since 1938.
“The S&P 500 has not declined in the 12 months following a midterm election since 1938.”
Listen at 39:39
The S&P 500’s average twelve-month post-midterm return is 14.8%.
“The average return is plus 14.8%.”
Listen at 39:56
A 5% earnings shortfall could cause Nvidia’s stock to fall 40%.
“If NVIDIA's earnings are 5% lower over the next 12 months than we expected them, the stock could fall 40%.”
Listen at 42:20
Elon Musk suffered $110 billion in personal losses tied to SpaceX and Tesla.
“It's $110 billion in personal losses tied to just SpaceX and Tesla.”
Listen at 43:25
- Daniel Cliftonon Federal land for data centersPositive44:52
The president will likely use federal land to locate data centers beyond local opposition.
“My guess is the president's going to figure out how to find federal land.”
Listen at 44:52
Meta’s stock rose as Democratic sweep odds increased because spending constraints became more likely.
“as the Democrats' odds of sweeping come up, Meta's stock started going up.”
Listen at 48:00
- Daniel Cliftonon U.S. stocksPositive50:08
Stocks have risen after midterm elections under every partisan control combination in a century.
“under every single partisan breakdown that we've had over the last hundred years, stocks are higher.”
Listen at 50:08
Ending the Iran war requires agreement from both sides.
“It takes two to agree to end a war.”
Listen at 51:51
- Daniel Cliftonon Oil prices and interest ratesNegative53:06
Oil prices and interest rates may remain elevated for longer than markets expect.
“I've been in the higher for longer camp.”
Listen at 53:06
- Daniel Cliftonon Texas data centersNegative54:06
Texas currently has a moratorium on data centers imposed by Abbott.
“There's a moratorium on Texas data centers right now that Abbott put in place.”
Listen at 54:06
Virginia’s policy changes halted data-center construction in Northern Virginia.
“Virginia did it, and it killed Northern Virginia data center construction.”
Listen at 56:12
- Daniel Cliftonon Healthcare stocksPositive1:00:55
Healthcare outperformed in twelve of the last fourteen midterm election years.
“This is the 12th midterm election year out of the last 14 where healthcare outperforms.”
Listen at 1:00:55
NIH spending flows directly into life-science-tools earnings.
“every dollar that goes out of NIH goes right in the life science tools earnings.”
Listen at 1:01:29
- Daniel Cliftonon AI drug discoveryPositive1:02:01
AI-assisted drug discovery will directly benefit life-science-tools companies.
“AI is going to help with drug discovery. That's a direct beneficiary for these companies.”
Listen at 1:02:01
- Daniel Cliftonon Democratic drug-price-control billNegative1:04:09
The Democrats’ proposed broad drug-price-control bill will not become law.
“It will never become law.”
Listen at 1:04:09
Large pharmaceutical companies face headline risk from proposed drug-price controls.
“I think there's headline risk.”
Listen at 1:04:38
A global price for Medicaid drugs will probably emerge within six months.
“in six months from now, we'll probably end up with a global price on Medicaid drugs.”
Listen at 1:05:33
- Daniel Cliftonon Congressional stock-trading banPositive1:09:11
Democrats should pass a congressional stock-trading ban on January 3.
“the Democrats should walk in on January 3rd and pass the bill.”
Listen at 1:09:11
- Daniel Cliftonon Congressional stock-trading reformNegative1:10:11
Congressional stock-trading reform repeatedly fails to pass when advanced.
“I just get worried because every time we start moving that bill, it doesn't go through for some reason.”
Listen at 1:10:11
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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