RPT-BREAKINGVIEWS-US midterm elections are ripe for AI backlash

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Gabriel Rubin

WASHINGTON, Jan 22 (Reuters Breakingviews) - The Trump administration’s embrace of artificial intelligence will face an affordability challenge in 2026. Ordinarily, an incumbent political party presiding over 2% real annual economic growth would enjoy strong approval. But the AI boom is driving up power prices, sparking local fights against data centers, and fomenting angst over potential job losses. From New Jersey to Georgia, the opposition Democratic Party is road-testing strategies to harness the backlash and winning races along the way. Come November’s crucial midterm elections, the discontent could prove decisive in determining control of Congress.

From socialist New York Mayor Zohran Mamdani right up to the arch-conservative White House, “affordability” is the mantra of the day. Electricity prices are the latest bugbear, rising 6.9% over the year ending in November, according to the Bureau of Labor Statistics, topping off a 40% increase between 2020 and 2025. They were roughly flat during the five years prior. That predates the meteoric rise of AI, which requires vast, energy-intensive server farms to crunch data and process inquiries.

This represents something of a shift for American politics, where for decades one item on the household budget reigned supreme: gasoline prices. After all, extensive economic literature reveals that consumers are especially sensitive to price increases on regular purchases, even if broader inflation measures remain tame. Given the U.S. love affair with gas guzzlers, the cost of filling up a tank fits the bill.

That’s reflected in gasoline’s relatively heavy 2.9% weighting in the all-important consumer price index. In the era of free-flowing domestic oil production, though, refueling costs have risen only slightly. Electricity, with a 2.3% weighting, now takes center stage as everything from heating to device charging grows substantially more expensive.

Its political salience is evident in recent races. Democrat Mikie Sherrill, running on a promise to freeze utility bills, won the 2025 race for the New Jersey governorship by 14 percentage points. Abigail Spanberger did likewise in the Virginia governor’s race, explicitly rejecting special energy subsidies for operators in a state that’s home to around 15% of the world’s hyperscale data centers — and electricity price inflation nearly double the national average.

Spanberger and Sherrill had myriad advantages, not least of which was Trump's dreadful approval rating in their states. Still, a smaller-scale contest in Georgia sharpens the point. Democrats stormed to victory in elections for two seats on the state’s public utility regulatory board, promising to force large technology companies to foot the bill for an “unprecedented” 50% capacity buildout by the state’s largest utility. The party hadn't held seats on the board since 2007.

The Trump administration has run headfirst into the AI crunch. Advocates within the White House, chiefly adviser and venture capitalist David Sacks and Commerce Secretary Howard Lutnick, have pushed a maximalist vision of AI’s place in the U.S. economy and federal policy. The White House’s 2025 AI Action Plan aimed to remove regulations put in place by the Biden administration and to weaken individual states’ ability to impose safeguards on the technology, including those related to energy and data center buildouts. Trump stood alongside OpenAI boss Sam Altman as he unveiled a $1 trillion plan to build server farms and assorted infrastructure, and has issued an executive order to accelerate permitting, while also cancelling billions in Biden-era clean-energy funds.

Yet those bruising election losses, flagging presidential approval ratings, and a rush by local legislators of Trump’s own Republican Party to get ahead of the issue seem to have had an effect. Alongside hasty proposals targeting housing costs or capping credit-card rates, the administration joined with several states to urge that the nation’s largest power grid operator, PJM Interconnection, hold an emergency auction in which tech giants would bid to cover the costs of rising energy needs. Perhaps sensing the risk of a politically-driven electron crunch, Microsoft MSFT.O has promised to work with utilities to pay its way and defray any spike in bills. OpenAI unveiled a strategy to alleviate public energy costs as part of its $500 billion Stargate development.

The problem is the vastness of AI’s energy hunger. The International Energy Agency forecasts that U.S. data center demand could increase by 130% by 2030, as compared to 2024. Goldman Sachs analysts reckon that growing electricity consumption will necessitate $444 billion of spending on generation in that timeframe. Meanwhile, the costs of key inputs, from gas turbines to something as fundamental as copper, are spiking.

Alongside the hit to pocketbooks, the continuing and strikingly unusual decoupling of economic growth and employment may frame AI as a villain once again. U.S. unemployment rose to 4.6% in November 2025, up from 4% when Trump took office in January 2025. Still-hot GDP growth is hardly a salve for ordinary workers facing ever-more precarity.

There are many reasons for this divergence. Public perception, however, is key. Survey data shows mounting fears of AI’s impact on employment. An August Reuters/Ipsos poll found that 71% worried that the technology would put people “out of work permanently.” Policymakers are also increasingly voicing their concerns: “The speed at which jobs are going away is what’s frightening, and we are not able to see the jobs that are coming,” Federal Reserve Governor Christopher Waller told executives at an event hosted by Yale University’s School of Management in December.

Granted, tech companies have a massive war-chest to spend on influencing upcoming elections. They might find promising precedent in cryptocurrency enthusiasts, who spent around $200 million in 2024 to punish skeptics and support Trump, who has pushed favorable regulation. The founders of Andreessen Horowitz and OpenAI’s Greg Brockman are preparing a $100 million political action committee called “Leading the Future” to support AI boosters.

In a tug-of-war between rising discontent and tech enthusiasm, though, the industry won’t always win. A White House push for a 10-year moratorium on state AI regulation attracted opposition from a bipartisan coalition of 36 state attorneys general and failed in the Senate. Republican Governor Ron DeSantis has proposed an AI bill of rights that includes data privacy, parental controls and consumer protections.

The politics of AI remain unsettled and new, while incoming dangers to prices and employment might yet dissipate. But if candidates see success in running against tech billionaires and their allies in the Trump administration, expect that playbook to be replicated in races throughout the country — and in the 2028 presidential election, too.

Follow Gabriel Rubin on Bluesky and LinkedIn.

(Editing by Jonathan Guilford; Production by Pranav Kiran)

((For previous columns by the author, Reuters customers can click on RUBIN/gabriel.rubin@thomsonreuters.com))