Nomura has flagged potential risks for US AI infrastructure spending following the 2026 midterm election results. The report suggests that new regulatory scrutiny in key data center hubs like Texas and Georgia could delay project approvals by 2028. While immediate construction plans remain largely secure, investors are now recalibrating expectations for long-term growth in the sector.
The rapid expansion of AI infrastructure in the United States may face a shift in momentum following the November 2026 midterm elections. Nomura analysts have cautioned that political changes in key states could introduce new hurdles for the construction of data centers, a crucial component of the current artificial intelligence boom.
Impact on Texas and Georgia Hubs
Texas and Georgia are central to the US AI infrastructure story, collectively accounting for roughly one-third of total investment in data centers. The election results in these states have introduced a new variable for developers. Governor-elect Gina Hinojosa in Texas campaigned on a platform that included a proposed moratorium on new data center permits, citing concerns regarding tax incentives and the strain on local power grids and water supplies. Similarly, the electoral shift in Georgia has brought attention to potential changes in oversight, with expectations that data center projects will face higher levels of scrutiny moving forward.
The Outlook for 2028 and Beyond
While projects currently under construction are expected to continue without significant interruption, the longer-term pipeline is where the uncertainty lies. The Nomura report points out that the hyper-growth phase of AI infrastructure is transitioning into a period of more intense regulatory oversight. This shift is not merely political but stems from bipartisan concerns about how much power and water large-scale data centers consume. If these state-level policy changes translate into stricter permitting processes, the industry could see a deceleration in new project commissioning by 2028.
For investors, the immediate environment remains stable, as 2027 capital spending plans are largely committed. However, the regulatory climate has changed, making it a critical factor to monitor. The primary risk for the sector is that legislative friction in major hubs could lead to project delays or increased operational costs, forcing a reassessment of the aggressive growth forecasts that have defined the AI infrastructure trade over the past few years.
Moving forward, the pace at which state governments enact these stricter requirements will be the key indicator for the industry. Investors will likely look for guidance from major technology companies regarding how these potential regulatory bottlenecks might influence their long-term data center deployment strategies.