Transcript
A Saturday special today. On Tuesday, America held what Time magazine called AI's first big election. Democrats took the House and the Senate. More than half of voters said AI and data centres mattered to how they voted. Hundreds of millions of dollars of tech money mostly backed the losers. Almost every local vote on a data centre went against it. And by Thursday, the stock market had noticed. So what does that mean for AI over the next two years, here and everywhere else?
Welcome to Briefly AI, a podcast by Harry Sharman, written and voiced by his AI clone. A newsroom staffed entirely by one of the things it's meant to be covering. We're aware of how that sounds, and we're leaning in anyway.
Those are the headlines. Now, the detail.
This is a Saturday special, and it comes with a rule. Everything you hear is drawn from reporting and named commentary in reputable outlets. Time, CNBC, NBC News, Fortune, VentureBeat, Reuters, the Atlantic Council, and one free-market think tank, which I will flag when we get there. Where it is someone's opinion, I will tell you whose.
First, the scale of it. CNBC reports Democrats flipped at least seven Senate seats and at least twenty-four House districts, and as of Wednesday, Republicans had not flipped a single one. Kansas elected its first Democratic senator since nineteen thirty-two. Texas elected a Democratic senator for the first time since nineteen eighty-eight, and threw out its governor.
Now, elections are mostly about the cost of living, and this one was too. But AI turned up in a way it never has before. An NBC News exit poll found fifty-six per cent of voters said AI and data centres were a crucial or major factor in their vote for Congress. And the data centre turned out to be the thing people could actually point at. VentureBeat counted forty-three of forty-four local ballot measures on data centres this year going against them. In Ohio, Sherrod Brown won his old Senate seat back with ads calling his opponent, quote, the face of data centers in Ohio. In South Carolina, Annie Andrews beat a candidate she nicknamed Data Center Darline.
Then there is the line that gives this episode its title. Time cites polling from Blue Rose Research, a progressive firm, which found Americans would rather live near a prison, a methadone clinic or a nuclear plant than an AI data centre.
Second, the money. The AI industry spent more on this election than any before it, and according to the reporting, it did not get much for it. Time's verdict was that the accelerationist wing, the people who want AI built as fast as possible with as few rules as possible, could hardly have had a worse night. Fortune looked at the candidates backed by AI super PACs and concluded the money was no match for the wider Democratic wave.
The biggest single donor was Elon Musk. Time puts his spending at four hundred and forty-six million dollars, of which about a hundred and sixty-eight million went to effectively supporting Ken Paxton for the Senate in Texas. Paxton lost. The safety side did not have a perfect night either. Its flagship cause was Alex Bores, the New York legislator behind the state's AI safety law, in a primary back in June. More than forty million dollars of outside money poured into that one race. Bores lost too.
The Republican strategist Brendan Steinhauser, who runs the Alliance for Secure AI, told Time, quote, Voters had their say tonight: they are overwhelmingly in support of AI safety and security, and very much against data centers. And his advice to the industry: quote, I think there's a big deluge of bills at the state and federal level coming their way.
Third, the markets, which is where the story has moved since Tuesday. On Wednesday, Wall Street barely blinked. On Thursday, it fell down the stairs. According to CNBC, the Nasdaq dropped five and a half per cent, which put it in what traders call a correction, more than ten per cent below its peak. The S&P 500 fell four point four per cent, and the Dow lost more than eighteen hundred points.
The AI names took the worst of it. Nvidia fell nine per cent, which CNBC says wiped more than four hundred and forty billion dollars off its value in a single day. Broadcom fell ten per cent. Micron and AMD fell seventeen. NBC News reports the Philadelphia index of chip companies dropped more than twelve per cent, its worst day since March twenty twenty.
On Friday it spread to Asia, where a lot of the chips and memory for those data centres are made. South Korea's Kospi fell so fast that trading was halted for twenty minutes, and it closed down more than six per cent. CNBC reports Japan's Nikkei closed down almost six per cent, and Taiwan's market, home of the chipmaker TSMC, fell four and a half. Both are now in what's called a bear market.
As for why, Reuters reports a UBS estimate that construction pauses could put roughly thirty per cent of America's planned new data centre capacity for twenty twenty-eight at risk. Ed Yardeni of Yardeni Research told NBC News, quote, I don't think this is an AI bubble bursting. I think it's an AI bubble losing some air very, very rapidly. And the President posted that, quote, The Stock Market suffered one of the Worst Days in History based on the results of the Election.
Worth keeping in proportion. Nothing has been cancelled, and no law has passed. A market that spent two years assuming data centres would get built without an argument has just had to price in the argument. When this was put together, on Friday morning UK time, Wall Street had not yet opened for the day.
So, fourth, what changes in Washington. And the honest answer from most of these pieces is less than you might think, at least at first. Donald Trump is still President for two more years. He can veto anything, and overriding a veto takes two thirds of both chambers, which Democrats do not have.
Adam Thierer at the R Street Institute, which is a free-market think tank and generally against new regulation, put it plainly. Quote, A Democratic Congress is not likely to deliver comprehensive federal AI legislation. What Congress does get is the power to hold hearings and issue subpoenas, and both R Street and Time expect a lot of that. More questions for AI companies, in public, under oath.
What does look likely is a fight with the White House over who gets to make the rules. The administration wanted to block states from passing their own AI laws. Time reports that just got much harder to do. And according to VentureBeat, the man likely to become Speaker, Hakeem Jeffries, said in a September interview that Congress should, quote, slow down the pace of development. There are already bipartisan bills waiting, including one requiring a kill switch on the most powerful models. R Street's Nicholas Thielman also expects what he calls AI New Deal proposals, plans to help workers whose jobs AI changes, to, quote, gain steam.
If Washington gridlocks, the rules get written somewhere else. Scott Singer, a fellow at the Carnegie Endowment who helped shape California's AI safety law, told Time, quote, If Congress is gridlocked, what happens in California will govern AI for the U.S. and the world.
Fifth, the build-out, which may matter more than any law. The whole AI boom rests on building enormous data centres, and that is now unpopular in almost every kind of district. VentureBeat notes that Texas alone was expected to host forty-one per cent of new American data centre capacity by twenty twenty-eight. Its outgoing governor had already imposed a moratorium on new permits, and he still lost, to a challenger who campaigned for a moratorium of her own.
Graham Brookie, who leads technology programmes at the Atlantic Council, argues the country, quote, must address the significant trust deficit the American public has toward the technology. He adds, quote, AI is here to stay as a general-purpose technology. In other words, nobody serious thinks this switches AI off. The fight is about where it gets built, who pays for the power, and whether the people living next door get a say.
Finally, the rest of the world. Kenton Thibaut, the Atlantic Council's China fellow, writes that, quote, Democratic control of Congress could strengthen political support for US-China coordination on AI safety. That builds on the agreement Trump and Xi reached in September to set up an AI dialogue and an emergency channel for AI incidents. He is careful to say Beijing has resisted talks framed around American priorities before.
For Europe, and by extension Britain, the advice is to keep expectations low. Jörn Fleck of the Atlantic Council's Europe Center says European leaders, quote, are right to have tempered expectations about how much a Democratic Congress will change things. The same President still runs foreign policy.
And one last thought, from Ali Mortell at Blue Rose Research, speaking to Time. Quote, This was the first cycle where AI showed up in the political discourse, and it's arguably the least important that it will ever be again. These next two years are when the most powerful systems yet get built. Whoever sets the rules for the land, the power and the safety checks in that time is setting them for a very long while, and for a lot more people than voted on Tuesday.
That's the news, filtered down to what actually matters this week. Back tomorrow, same arrangement.