Calder McHugh and colleagues report in Politico:
Elon Musk spent a half-billion dollars, only to see his home of Texas go blue. Allies like Marc Andreessen, Ben Horowitz and their Silicon Valley firm — as well as OpenAI’s Greg Brockman — plowed tens of millions of dollars into super PACs that suffered major upsets. Crypto money was crushed in Ohio, Democrats who ran against Big Tech claimed decisive victories Tuesday. Democrats who won Senate races in South Carolina and Ohio cast their opponents as the faces of a data center build-out and frequently name-checked “Big Tech” as a primary American villain. Democrat gubernatorial winners — Amy Acton in Ohio, Keisha Lance Bottoms in Georgia, David Crowley in Wisconsin, Troy Jackson in Maine and Jocelyn Benson in Michigan — all supported a data center moratorium. “The American people rejected the alliance of Big AI and Big Government. Voters rejected Republicans in part because they were bought and paid for by AI billionaires,”
Good Wednesday morning. It’s the day after Election Day, Decoded. Wipe the sand out of your eyes.
— The main character: Elon Musk, in trouble after a blue wave routed his preferred candidates.
— David Sacks is worried about regulatory capture from top AI companies — still.
— Democrats will soon have oversight power. AI is in their crosshairs.
— The other Boldfaces: Marc Andreessen, Ben Horowitz, James Talarico, Gina Hinojosa, Amy Acton, Keisha Lance Bottoms, Jocelyn Benson, Sergey Brin, Reid Hoffman, Scott Wiener, Bharat Ramamurti, Sherrod Brown and more.
The Big Idea ANALYSIS: THE TECHLASH IS BLUE — Democrats who ran hard against Big Tech claimed decisive victories Tuesday. For the GOP, the midterm elections may go down as the moment their candidates’ emphatic embrace of the industry came to an end.
Elon Musk spent nearly a half-billion dollars, only to see his adopted home of Texas go blue. Allies like Marc Andreessen, Ben Horowitz and their eponymous Silicon Valley firm — as well as OpenAI’s Greg Brockman — plowed tens of millions of dollars more into super PACs that suffered major upsets. Crypto money was crushed in Ohio, and AI safety groups were spiking the football on behalf of allies preparing to hold gavels in a Democratic-controlled Congress.
“Republicans didn’t need additional headwinds,” said Evan Swarztrauber, a Republican tech consultant who previously worked for FCC Chair Brendan Carr. While he noted that the Iran War and its domestic impacts were top factors for voters, he added, “the party’s association with unconstrained Big Tech and runaway AI is certainly not helping the GOP’s case.”
The results, Decoded: Tech played a starring role in several of the biggest midterm upsets.
Democrats who won Senate races in South Carolina and Ohio strongly cast their opponents as the faces of a data center build-out and frequently name-checked “Big Tech” as a primary American villain. Tech donors had backed each of their Republican opponents, viewing them as more accommodating to the data center or crypto industry. AI super PACs that spent in favor of pro-regulation candidates touted great nights. Democrat Manny Rutinel, a closely watched leading AI safety advocate on the ballot, claimed victory in a swing House seat in Colorado.
During his victory speech, Democratic Sen. Jon Ossoff of Georgia accused the titans of Silicon Valley with digging bunkers for themselves while warning “that the artificial intelligence that they’re creating risks human extinction.” Pennsylvania Democrats Paige Cognetti, Bob Brooks and Bob Harvie all went hard after data centers in their winning House campaigns.
In Texas, where Musk has expanded his SpaceX empire, along with other ventures, some prognosticators believed Democrat James Talarico could defeat Republican Ken Paxton in the Senate. Few had hoped that Democrat Gina Hinojosa could fell incumbent Greg Abbott, who had courted data centers before ordering a pause. Both won, and Hinojosa’s stunning victory will put Big Tech on the back foot.
“The entire AI industry made this giant levered bet on the idea that they’d be able to build [data centers] in Texas,” said Sam Koppelman, the publisher of Hunterbrook Media — an investigative journalism outlet connected to a hedge fund. “This election totally changed that.”
Republicans who have been skeptical of the party’s alliance with tech are now calling out those relationships directly. Polling has long shown public opposition to data centers.
“Rather than heed those concerns, some in the administration and GOP chose to align themselves with Big Tech and corporate plutocrats,” said Daniel Cochrane, a conservative and a senior fellow at the Institute for Family Studies. “The American people reject the alliance of Big AI and Big Government.”
Computing power poses a major obstacle to frontier AI labs, and the Democrats’ big night is likely to impede new projects. Wall Street is bracing for a slowdown. Texas accounts for more than a quarter of the country’s planned data center capacity, according to research from Goldman Sachs, and Hinojosa’s call for a moratorium until the state Legislature can enact more protections goes well beyond Abbott’s eventual pause on approvals of data center permits.
Voters “want to see a stronger stance” on data centers, said Brendan Steinhauser, who runs the advocacy group The Alliance for Secure AI and was a longtime Republican political consultant. “And interestingly enough, even sometimes when Republicans did that in this election, it might have been too little, too late.”
It wasn’t just Texas. Democrat gubernatorial winners — Amy Acton in Ohio, Keisha Lance Bottoms in Georgia, David Crowley in Wisconsin, Troy Jackson in Maine and Jocelyn Benson in Michigan — have all supported a data center moratorium in some form.
When data center measures were on the ballot as an isolated issue, voters made their objections known, from a Los Angeles suburb to multiple Ohio cities.
That represents a major blow to the AI narratives that have powered stocks and economic growth through much of Trump’s second term. Stocks began selling off in overnight trading as Democrats picked up Senate seats in the Carolinas and across the Midwest, though by early Wednesday morning they had rallied.
With Democrats back in power in Congress, “the equity market is under downward pressure” in the near term, said Joe Lavorgna, a former adviser to Treasury Secretary Scott Bessent who’s now the chief economist at SMBC Americas.
Investors have grown skeptical about the viability of existing investments in AI-related infrastructure. Democrats will take a tougher line in cracking down on the frontier labs. And in that respect, a blue wave “will let more of the air out of the bubble,” said Mohamed El-Erian, a professor at the Wharton School and chief economic adviser at Allianz.
Perhaps no man is more emblematic of last night’s Big Tech letdown than Musk. His preferred candidates across the country were swamped, losing almost everywhere, including Paxton and Vivek Ramaswamy for governor in Ohio.
The closest Democrats had to a Musk counterweight, billionaire megadonor and LinkedIn co-founder Reid Hoffman, defended his own donations by calling out Musk for spending “outrageous amounts to keep authoritarian clowns in power.”
The SpaceXSI CEO seemed to initially shrug it off online, using the results to boost an idea he’s trying to pursue. “Data centers in space looking pretty appealing right now,” he wrote on X.
Musk now will have to worry about matters closer to home — as he’s likely to be a major oversight target for a party looking to pillory tech CEOs.
“Voters rejected Republicans in part because they were bought and paid for by AI billionaires,” Rep. Greg Casar (D-Texas) said in a statement Tuesday evening. “Democrats must hold them accountable instead of cashing their checks.”
Tech’s biggest spenders were expecting their biggest victory — ironically — to come in California, where Google co-founder Sergey Brin looked set to lead a group of billionaires in defeating a wealth tax.
But the rest of the evening belonged to those on the other side of the emerging fight. In San Francisco, some pro-AI regulation voters on the ground reacted to Musk’s defeat and Democrats’ dominance with glee. Outside of a party for Democratic state Sen. Scott Wiener — an early AI safety advocate who is leading in the race for Nancy Pelosi’s San Francisco congressional seat — two attendees yammered about Musk. “I love that Elon spent [all that money] for nothing,” one said.
The other mused back, “I don’t really know what he was expecting from that. More favorable data center regulations?”
No comments:
Post a Comment