Now a new war has started in America regarding Artificial Intelligence (AI). On the one hand, companies are claiming to use AI to work faster and reduce costs, on the other, public anger is rising due to job losses and increased electricity and water consumption. Now the effect of this displeasure is visible on American politics as well.
The Democratic Party won a landslide victory in the midterm elections held on November 3. The party won majority in both the Houses of the US Parliament i.e. Senate and House of Representatives. Apart from this, Democrats have also won governorships in states like Texas, Georgia, Ohio and Nevada. Notably, many of these candidates promised to ban or limit the construction of data centers during the election campaign. That could add to AI companies’ problems.
1. 1.21 lakh jobs cut in the name of AI
According to a Nov. 5 report by outplacement firm Challenger, Gray & Christmas, American companies announced 1,21,401 job cuts in January-October 2026, citing AI as the reason. This is about 20% of the total 6,17,189 layoffs. In October, AI was cited as the reason for 1,265 cuts, the lowest figure of the year.
In the name of AI, 4,247 cuts were announced in 2023, 12,742 in 2024 and 54,836 in 2025. From 2023 to October 2026, this number has increased to 1,93,226. These are layoffs announced by companies based on reasons; This is not proof that every employee has been replaced by AI. According to the report, market and economic conditions became a bigger reason than AI with 1,30,531 cuts in 2026.
2. Why did data centers become an election issue?
Running AI models requires large data centers. These contain thousands of servers, which require a lot of electricity and water to run and keep cool. People fear that this will increase electricity bills, put pressure on water sources and increase pollution. They also doubt the benefits of local employment.
According to a Nov. 5 article in the Harvard Business Review, at least 21 election contests placed nearly $90 million in ads in support of slowing or stopping data center construction. In one survey, nearly two-thirds of American adults rated the speed of AI as too fast. About three-quarters opposed a data center in their area. According to the AP, 32 of the 34 winning gubernatorial candidates favored stricter regulations. 12 supported a ban or temporary ban. In many local polls, votes were cast in favor of banning data centers.
3. What will change in Texas, Georgia and Ohio?
In Texas, Democrat Gina Hinojosa defeated Republican Governor Greg Abbott. Talked of withholding project approval if local people are not benefited from their participation in decision-making. Keisha Lance Bottoms in Georgia supported a moratorium pending a review of the environment and electricity rates. Ohio’s Amy Acton asked companies to charge the full cost of electricity and water and called for transparency.
According to Reuters, Goldman Sachs estimates that temporary restrictions at the state and local level could affect about 45% of proposed data center capacity expansion projects in the US. This is an estimate, not the number of canceled projects. Core Scientific shares fell 11.6% and IREN shares fell 12.5% after the results. Investors fear that a delay in approval will reduce spending on AI infrastructure.
4. Will AI be banned?
A victory by Democrats does not automatically ban AI. State governments can tighten rules on local clearances, electricity-water, environment and tax exemptions. Congress can investigate and hold hearings, but President Donald Trump’s veto of federal legislation could be a hindrance. Trump is a supporter of the AI industry and wants the US to stay ahead of the technological competition with China. So, the real battle is not to stop AI, but to set the conditions for its expansion. Companies have to explain how the data center will benefit local people and who will bear the cost.
