The Democratic victory in the midterm elections of United States opens up a new stage for the development of data centers and artificial intelligence. The new political balance in Washington could drive a debate about the conditions under which these infrastructures should grow, from their impact on the electric grid to the relationship with the communities in which they are installed. For investors, the challenge does not necessarily lie in facing more obstacles, but in having clear and predictable rules that allow for planning long-term projects.
This is one of the main conclusions of the analysis prepared by Man Group after the elections, in which Matt Rowe, chief executive officer and senior portfolio manager at Solutions of the firm, examines the economic and financial consequences of the new political scenario. The entity believes that the United States could benefit in the short term from a recovery in market confidence, linked to a higher valuation of the rule of law, transparency, and institutional checks and balances.
The electoral outcome has placed the Democrats at the head of both chambers of Congress for the first time during the presidency of Donald Trump. The new scenario, however, anticipates a period of greater legislative gridlock, in which the president will have more difficulty advancing his agenda. At the same time, Democrats will need to translate their victory into concrete proposals and not limit themselves to investigations into the Republican Administration.
Data centers seek a new framework to grow
The expansion of data centers was one of the issues present in the election campaign. The opposition of some communities to the installation of these infrastructures has generated projects pending approval and has brought into public debate issues such as electricity consumption, network capacity, and how the costs associated with these installations are distributed.
For Man Group, this context represents a turning point for the sector. The projects require very high investments and are designed to operate for decades, so knowing in advance the rules they will have to comply with is essential for making decisions. The firm argues that a defined regulatory framework can be more profitable in the long term than the current uncertainty, by allowing companies to calculate their costs and manage risks better.
A defined regulatory framework can be more profitable in the long term than the current uncertainty
The report also identifies some economic challenges that investors are already taking into account. Development timelines are being extended and the actual costs of certain infrastructure are leading to revisions of profitability estimates. This trend is reflected in the markets: the credit spreads of hyperscaler companies have doubled compared with the levels at the beginning of 2025, according to the JPM USD IG Hyperscaler index cited in the document.
The valuation of these investments depends on factors such as expected revenues, construction and maintenance costs, and the evolution of technology. On this last point, Man Group notes that the rapid obsolescence of assets adds complexity when calculating their value and the guarantees associated with the projects.
Development timelines are being extended and the actual costs of certain infrastructure are leading to revisions of profitability estimates
The Pennsylvania model: grow without shifting the costs to households
Among the initiatives that could set the direction for the new phase, Man Group highlights the model driven by Democratic Governor of Pennsylvania, Josh Shapiro. His proposal, called GRID —English acronym for the governor’s rules for responsible infrastructure development—, seeks to reconcile the expansion of data centers with consumer protection and the involvement of local communities.
The approach establishes that developers must build, provide, or acquire the electrical capacity they need for their facilities, so that households do not end up taking on that expense through their bills. They must also pay for the upgrades to the electrical grid that their projects require.
The initiative also incorporates a dimension of dialogue with the surrounding environment. Companies must get involved with communities from the earliest phases, inform local governments, hold public meetings, and negotiate agreements that generate benefits for residents.
Man Group considers that this model, focused on making technological investments compatible with the interests of the population, is one of the references that it is worth following. Its application could offer promoters a more defined framework to develop their projects and, at the same time, reinforce social acceptance of the new infrastructure.
The report also mentions the experience of Louisiana, where a law approved this year will allow part of the revenues linked to a large data center project in West Feliciana Parish to be returned to residents through property tax exemptions starting in 2027. The measure follows a formula similar to Alaska’s oil dividend.
Although both approaches are different, they share the same premise: that the communities that host these facilities can participate in their benefits and that technological development does not mean shifting the costs of the necessary infrastructure onto them.
Regulation as an ally of investment
Man Group’s analysis suggests that greater regulation does not have to translate into a brake on investment. The key is that companies know the conditions they will have to meet before committing capital to long-term projects.
Those building data centers today will have to adapt to the rules of the new Congress and, possibly, to those that may be approved after the 2028 presidential elections. For this reason, the firm believes that having clear guidance on the future regulatory framework could become an advantage for investors.
Predictability makes it possible to calculate energy costs more precisely, anticipate promoters’ obligations, and reduce the risk that a project will be conditioned by unexpected regulatory changes. In this sense, Man Group argues that a defined framework may prove more profitable in the long term than the uncertainty that currently surrounds some investments.
Therefore, the debate is not limited to deciding how much regulation the sector needs, but to establishing conditions that allow the pace of expansion of artificial intelligence to be maintained and, at the same time, respond to citizens’ concerns and those of local administrations.
Inflation will continue to shape the U.S. economy
Beyond artificial intelligence, the new Congress will have to tackle another of the issues that have marked the campaign: the cost of living. Man Group warns that a Democratic victory will not, by itself, resolve the inflationary pressures facing the U.S. economy.
The report places inflation at 3.7% in September, driven by higher energy prices. The firm considers that removing the war premium incorporated into energy costs would be one of the most direct ways to ease pressure on prices, although it acknowledges that Congress has limited capacity to intervene in foreign policy.
Tariffs are also part of the equation. Some voters believe they contribute to higher prices, so Man Group points out that Republicans could pay more attention to this concern with a view to the 2028 presidential elections.
In the longer term, the entity identifies other risk factors, such as high public debt and the budget deficit. The combination of these elements with persistent inflation could lead to a scenario of stagflation, characterized by economic stagnation and the maintenance of elevated prices.
A new balance for markets and technology
Man Group’s conclusion is that the elections have changed the U.S. political landscape, but have not resolved the economic challenges that worry voters and investors. Legislative gridlock could, in the short term, favor risk assets, although the need to contain inflation will continue to shape market outlooks.
For the data center sector, the new phase opens a debate about how to finance energy infrastructure, what responsibilities its promoters should assume, and how communities can participate in the benefits of these investments.
The firm considers that the electoral outcome was less a sweeping victory for the Democrats than a decisive defeat for the Republicans: voters took control of both chambers away from the Trump party, without this necessarily implying unconditional support for the opposition’s agenda.
In this new scenario, the ability of the United States to provide institutional stability and predictable rules will be a relevant factor in attracting investment. The expansion of artificial intelligence will continue to depend on the technological and financial capacity of companies, but also on their ability to develop their infrastructures with a clear framework and a sustainable relationship with the territories in which they operate.