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[Focus](https://blog.syzgroup.com/slow-food-for-thought/tag/focus) ### US midterms & data centres: slower build-out, cycle likely intact On 5 November, markets gave a harsh first verdict on the elections: the Philadelphia Semiconductor Index fell 12.3%, as investors weighed what Democratic gains in state governments could mean for the cost and pace of the data centre build-out, at a time when local communities already question its impact on electricity bills. [![Malek Dahmani](https://blog.syzgroup.com/hubfs/malek.jpg)](https://blog.syzgroup.com/slow-food-for-thought/author/malek-dahmani) [**Malek Dahmani**](https://blog.syzgroup.com/slow-food-for-thought/author/malek-dahmani) Head of Equities **Friday, 11/06/2026** | - [![Pdf](https://blog.syzgroup.com/hubfs/pdf%20(1).png)](https://blog.syzgroup.com/hubfs/Focus_261106_MidtermsDatacenters.pdf?hsLang=en) - - - - --- ![](https://blog.syzgroup.com/hs-fs/hubfs/image-png-Nov-06-2026-02-29-47-0881-PM.png?width=1128&height=685&name=image-png-Nov-06-2026-02-29-47-0881-PM.png) --- ## What it means for markets Profits drive stocks more than parties do. Thursday leaves the SOX about 38% below its June peak, a sharp but not unusual correction for such a volatile index, still up 28% this year. The first rebound is rarely the last word. After the Nasdaq’s seven previous one-day falls of more than 5% since 2015, it was five times lower a week later, but six times higher three months later. This is a small sample, but a consistent pattern. We see local opposition as an added risk premium for AI infrastructure equities, not a reason to change our broader equity outlook. With around 400 GW of US capacity proposed against roughly 90 GW needed by 2030, power, permits, financing and execution will increasingly separate winners from losers. **Most exposed:** leveraged developers, companies relying on new approvals, and utilities facing a review of their allowed returns. **More resilient:** hyperscalers, whose balance sheets and geographic flexibility let them absorb delays, and semiconductor suppliers supported by global AI demand. **Potential beneficiaries:** operators with secured power and permits, grid equipment suppliers supported by continued spending, and utilities in states with stable frameworks. **What would change our view:** slowing AI revenue growth, weaker cloud utilisation, tighter financing for the largest platforms, or cuts to hyperscaler capex guidance. None are visible today. --- ## How data centres became a political problem Data centres have brought enormous investment to communities across America, along with an extraordinary appetite for electricity. A large AI campus can consume as much power as a small city, and supplying it often requires new transmission lines, substations and generating capacity. The question is who finances that infrastructure, particularly when residential electricity bills are already rising. Opposition has grown remarkably quickly. Allianz Research counts nearly $200bn of projects blocked or delayed by local opposition in the first half of 2026, as well as 261 local moratoria and 833 opposition groups across 49 states. The elections have now brought that pressure into governors' offices and utility commissions. Texas alone accounts for close to 30% of the US capacity due online in 2028, according to SemiAnalysis, butthe pushback started well before 3 November. ### Both camps were already reluctant. Since August, Texas's Republican Governor Greg Abbott had ordered the state's utility regulator and its grid operator, ERCOT, to audit every data centre seeking a connection. On 21 September, the state's environmental agency was told to halt all data-centre permits. New York has a one-year moratorium on projects of 50 MW or more. Such moratoriums are often less political than they look. They respond to electricity bills, water use and local infrastructure, concerns that candidates from both parties now must address. ### Projects under way limit the damage. SemiAnalysis forecasts about 38 GW of new US capacity in 2027, of which 22 GW was under vertical construction in September, and estimates that moratoriums genuinely delay only about 2.3 GW. Projects with questionable economics, locations or power sources were likely to slip whatever the result of the vote. ### The grid has to be rebuilt anyway. The US grid is in such poor shape that both parties accept it needs reinvestment. In Texas, large-load connection requests have reached 474 GW, more than five times the state's record peak, and regulators have approved two of the three import paths of the $33bn Permian Basin plan. Grid investment will continue because the system needs it, whoever ends up paying. ### Scarcity has a price. Delaying compute supply leaves AI demand intact and makes existing capacity more valuable. H100 rents are up about 35% this year, four years after launch, and B200 rents have risen faster still, according to Ornn Data figures cited by a16z. Older GPUs keep their value for longer, and hardware spending spreads over more years, extending the investment cycle. --- ## AI capex: a peak in 2027, or a detour? ![](https://blog.syzgroup.com/hs-fs/hubfs/image-png-Nov-06-2026-02-32-09-1244-PM.png?width=1151&height=677&name=image-png-Nov-06-2026-02-32-09-1244-PM.png) Visibility is low: new governors and legislatures will write the rules over the first half of 2027. What tips the balance between these readings is financing. Credit markets have stayed calm so far, which is why we put more weight on the second and third readings; a broad tightening of financing for the largest platforms would make the bear case more likely. --- ## State by state: the rules matter more than the winner Thirty-six states elected governors. In most, the consequence for markets runs through three channels: who the winner appoints to the utility commission and when, whether the large-load framework is already written, and how far campaign positions can travel once they meet a legislature, a statute or an elected commission. ![](https://blog.syzgroup.com/hs-fs/hubfs/image-png-Nov-06-2026-02-33-15-6628-PM.png?width=1144&height=719&name=image-png-Nov-06-2026-02-33-15-6628-PM.png) **Texas** remains the most consequential state. Hinojosa takes office on 19 January, but the processes Abbott launched carry momentum of their own: the ERCOT audit due on 10 December, the TCEQ permit halt and a review of the $3.3bn billion tax exemption. With a Republican state Senate, stricter cost-sharing rules look more plausible than a permanent ban, though visibility is limited until the legislative session. **Georgia** is where utility returns are most at stake. Democrats now hold a 3–2 majority on the commission that sets the main utility's allowed returns, although the current rate agreement offers protection until 2028. **Ohio** voters went further than their candidates, backing bans aimed at specific hyperscaler campuses. Until the rules settle, reshoring and transmission look like firmer drivers for local utilities than data centres. In **Pennsylvania and Oregon,** the commission's review of allowed returns matters more than the election, while wildfire risk remains the defining issue for Oregon utilities. ![](https://blog.syzgroup.com/hs-fs/hubfs/image-png-Nov-06-2026-02-33-58-1179-PM.png?width=1148&height=484&name=image-png-Nov-06-2026-02-33-58-1179-PM.png) The local ballot votes, concentrated in Ohio, Illinois and Kansas, gauge local acceptance and confirm that siting risk sits mainly at county and municipal level. ***Building physical infrastructure is hard, and more regulation makes it harder. Yet the grid will be rebuilt either way, and companies that already hold power and permits stand to gain the most.*** --- ## ![](https://blog.syzgroup.com/hs-fs/hubfs/image-png-Nov-06-2026-02-34-55-2133-PM.png?width=593&height=270&name=image-png-Nov-06-2026-02-34-55-2133-PM.png) --- #### Disclaimer This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document. Read More ## Related Articles [Focus](https://blog.syzgroup.com/slow-food-for-thought/tag/focus) #### [Alphabet’s full stack strategy: hard to copy, harder to pay for](https://blog.syzgroup.com/slow-food-for-thought/alphabets-full-stack-strategy-hard-to-copy-harder-to-pay-for?hsLang=en) AI assistants are challenging Google's dominance in Search. That story is now well known. Far less attention has been paid to what Alphabet has been building on the other side of the AI race: a full stack stretching from its own chips to products used by billions. At its heart is the Tensor Processing Unit (TPU), a chip developed for internal use a decade ago that has since become a product rival that AI labs are willing to pay for. This combination is difficult to replicate and is already driving growth. The catch? The economics are far less attractive than those of Search, with significantly lower profitability. **[Malek Dahmani](https://blog.syzgroup.com/author/malek-dahmani?hsLang=en)** | 03/11/2026 [Focus](https://blog.syzgroup.com/slow-food-for-thought/tag/focus) #### [Privacy: the missing layer of institutional finance](https://blog.syzgroup.com/slow-food-for-thought/privacy-the-missing-layer-of-institutional-finance?hsLang=en) The privacy coin sector is the only part of the crypto market trading above last year’s peak, and the US market’s main settlement house has just launched a tokenisation service on a confidential blockchain. Hiding transactions, long seen as a red flag, is starting to look like a condition for institutional adoption. **[Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/author/charles-henry-monchau?hsLang=en)** | 03/11/2026 [Focus](https://blog.syzgroup.com/slow-food-for-thought/tag/focus) #### [Search under seige?](https://blog.syzgroup.com/slow-food-for-thought/search-under-seige?hsLang=en) Alphabet, OpenAI and the battle for the world’s most valuable ad auction **[Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/author/charles-henry-monchau?hsLang=en)** | 30/10/2026 ## Straight from the Desk # Syz the moment Live feeds, charts, breaking stories, all day long. [Discover more](https://blog.syzgroup.com/syz-the-moment?hsLang=en) ## **Thinking** out loud Sign up for our weekly email highlighting the most popular posts. 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