The core pricing anchor for the data center industry is changing. The policy shift following the U.S. midterm elections has rapidly redirected market attention from new capacity additions toward the scarcity of already-built, already-approved, and under-construction assets.
According to a JPMorgan North America credit research report dated November 4, Democrats gained control of the House and Senate and won gubernatorial races in key data center states including Texas, Georgia, New Mexico, and Nevada. Meanwhile, 42 of 45 local ballot measures restricting data centers have passed or are leaning toward passage.
This means data center developers now face higher approval thresholds, longer construction timelines, and more complex local political constraints. The expansion narrative that the market previously favored is being repriced around permitting certainty, power access, and already-sited capacity.
For investors, the most directly affected areas include high-yield project finance, independent power producers, bridge power providers, and data center developers. JPMorgan expects limited changes to 2027 capital plans, with the real pressure concentrated in 2028 and beyond.
Policy winds shift, raising the bar for new projects
JPMorgan stated that the "blue wave" has far-reaching implications for the data center and power sectors. Gubernatorial campaign platforms deserve particular attention, as post-election policy shifts typically do not immediately deviate from campaign promises.
In Texas, Gina Hinojosa explicitly proposed an immediate moratorium on new data centers during her campaign and advocated giving local communities more decision-making authority over development. She also emphasized rate freezes and strengthened scrutiny of data center infrastructure to control residential electricity costs.
In Georgia, Keisha Lance Bottoms did not make data centers a core policy issue but previously supported a "one-to-six-month or longer" moratorium on new data center development to assess long-term impacts on the state. Senator Jon Ossoff took a tougher stance, advocating a full moratorium and investigation into data center development in Georgia.
In New Mexico, Haaland's platform called for pausing new large-scale projects until clear regulatory guardrails are established. In Nevada, Ford proposed pausing data center tax incentives, setting employee wage and benefit standards, and requiring data centers to bear the additional costs of residential electricity rate increases. In Ohio, Acton supported a conditional moratorium requiring data centers to cover 100% of utility costs, use union labor, and increase operational transparency.
Local-level voting results reinforced this trend. JPMorgan, citing Ballotpedia data, noted that 42 of 45 local ballot measures restricting data centers have passed or are leaning toward passage, with only one failing in Harwood, North Dakota, and two others yet to report results.
These measures are primarily concentrated in the Midwest and take the form of MW caps, voter approval requirements, or outright development bans. By state, Ohio has the most at 20, followed by Illinois and Maine. The report suggests that given the success rate and public engagement in this round of local votes, similar restrictive measures could spread further in 2028. JPMorgan quoted one observer as saying, "The 2028 election has already begun."
Premiums rise for built assets, approved projects gain relative advantage
The pricing logic of the data center market has consequently changed. JPMorgan stated that data centers and power infrastructure that are already built, fully approved, or already in construction are now worth more than before the election.
The report quoted a trader saying, "The market used to be willing to pay a premium for investment-grade leases; now it will pay a premium for already-built assets." This statement encapsulates the shift in investor focus: contract quality still matters, but deliverable capacity and permitting certainty are gaining greater weight.
In key states such as Texas, Georgia, New Mexico, and Nevada, the path to obtaining permits and completing construction for new data centers is expected to be more difficult, slower, and more costly. JPMorgan believes the probability of moratoriums ultimately becoming permanent bans is limited, but the pace of industry expansion has already been materially affected.
Relatively friendly regions may attract more attention. The report named Louisiana and North Dakota, saying these states could draw developer investment and access market capital at more attractive costs. At the same time, as the U.S. development environment becomes more complex, international data centers may also gain more attention.
Some already-approved or already-launched projects are less affected. JPMorgan noted that Vistra Energy's 2.6 GW project related to Meta in Ohio and Pennsylvania has already advanced and involves nuclear assets, making it relatively resilient to potential moratorium policy shocks. In Georgia, Georgia Power's 3.2 GW project related to OpenAI has been approved by the Georgia Public Service Commission and is expected to break ground by the end of 2026. The report views this project as relatively safe.
In Texas, American Electric Power Texas may receive some support. The company recently increased its approved data center development pipeline in the state to 1.6 GW. By contrast, projects that have not yet been approved, financed, or entered construction will face higher discount rates.
Texas becomes the investor focal point
In the high-performance computing and high-yield project finance sectors, investors are most focused on Texas regulatory changes. JPMorgan stated that approximately 27% of financed data center capacity in the high-yield project finance market is being built in Texas.
Risks are concentrated in projects energized in 2028 and 2029. These projects could face delays or, in extreme cases, termination. The pipeline of unfinanced projects has also become more uncertain, with financing difficulty rising.
Among the listed high-yield data center builders tracked by JPMorgan, approximately 78% of the pipeline is located in Texas, primarily involving Cipher and Galaxy. The report states that this makes Texas policy changes one of the most important variables in the data center credit market.
Neocloud companies also face indirect risks. If data center construction is delayed, capacity online dates will be pushed back, affecting the pace of contract execution. According to public information, CRWV's leased or planned data centers in the U.S. are located in North Dakota, Illinois, Georgia, Texas, North Carolina, Oklahoma, Virginia, and New York, with additional data centers in Pennsylvania and New Jersey; its international projects involve the UK, Denmark, Indonesia, India, and Canada.
Power sector under pressure, bridge power impact comes sooner
A slowdown in data center development will first affect power demand expectations. JPMorgan expects most independent power producers may come under pressure, especially those with high exposure to Texas, Ohio, Pennsylvania, and Georgia.
The report notes that most states have not directly banned data center development, but approval thresholds for new projects will be higher, giving already-approved projects a clear advantage. A slowdown in data center development could push power prices lower, though meaningful new generation capacity is not expected until around 2029.
Bridge power and behind-the-meter power providers may face greater near-term impact. JPMorgan stated that extended data center construction timelines will weaken demand for bridge power solutions, particularly in Texas and the PJM market.
The impact on regulated utilities is relatively moderate. The report states that data center demand had previously supported some utilities' 6% to 9% EPS growth expectations, but a pullback in related capital expenditure could also ease balance sheet pressure, especially against a backdrop of capital investment expected to grow at least through 2030.
Bond supply may slow, scarcity supports compute pricing
JPMorgan expects no major changes to 2027 capital plans, as most projects with spending that year have already broken ground. The bigger impact will come in 2028 and beyond.
From the financing market perspective, most 2027 projects have already been financed. What the market needs to determine next is when projects in 2028 and beyond can secure funding. The report expects short-term bond supply may slow, with the first batch of new deals more likely concentrated in data centers and GPU deployment projects in "safe" jurisdictions.
This slowdown also has a positive side. A flatter growth curve helps commercialization progress catch up with capital expenditure while keeping compute supply tight for longer. For investors, the data center industry is moving from a pure expansion cycle into a new phase priced on permitting, power, construction progress, and the degree of asset completion.
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