On November 5, Goldman Sachs stated that a stronger-than-expected victory by the Democratic Party in the midterm elections could have a significant impact on the regulatory landscape for the AI and data center industries, particularly at the state and local government levels.
The bank expects that Democratic wins in local elections will drive stricter regulatory measures for AI and data centers, which could put pressure on some US utility companies and independent power producers that supply electricity to data centers.
Goldman Sachs analyst Jenny Grimberg noted that after securing majorities in both chambers of Congress, Democrats are expected to use upcoming fiscal policy negotiation deadlines to push for restrictions on the war with Iran, the rollback of certain tariffs, and the reversal of recently implemented spending cuts.
However, the bank believes that the impact of data center construction restrictions may be temporary, with the significance of related disputes expected to gradually diminish, and data center construction moratoriums in some regions may not last long.
In energy markets, Goldman Sachs pointed out that after the US midterm elections, the geopolitical risk premium in international oil prices has declined noticeably.
Nevertheless, given that Middle East oil supply still faces downside risks, the bank recently raised its forecast for the average Brent crude price in 2027 from $80 per barrel to $88 per barrel, and consequently expects Europe to face slower economic growth and rising inflationary pressure next year.
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