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The Pentagon said Iran War costs $29 billion, but the real cost is closer to $200 billion—and counting

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AIData centers

The under-the-radar factor that helped Democrats win in Virginia, New Jersey, and Georgia 

Sharon Goldman
By
Sharon Goldman
Sharon Goldman
AI Reporter
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Sharon Goldman
By
Sharon Goldman
Sharon Goldman
AI Reporter
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November 5, 2025, 12:59 PM ET
The QTS data center complex, under development last year in Fayetteville, Ga.
The QTS data center complex, under development last year in Fayetteville, Ga.Elijah Nouvelage—Bloomberg/Getty Images
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The Democratic sweep of gubernatorial races in Virginia and New Jersey and public service commissioner races in Georgia offers an early glimpse of what could be a sleeper issue in the 2026 midterm elections: the politics of AI infrastructure.

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In Virginia, Governor-elect Abigail Spanberger made data centers’ outsize energy demands one of her campaign planks, calling on tech companies to pay their “fair share” to strengthen the grid. In New Jersey, Mikie Sherrill won the governorship championing, among other issues, legislation that would require data centers to help fund grid modernization and renewable energy investments. And in Georgia, Democrats Alicia Johnson and Peter Hubbard unseated incumbent Republicans on the Public Service Commission, which sets utility rates, after Hubbard complained that big tech companies were being offered “sweetheart deals,” while residents paid much higher rates for electricity.

These wins underscore a striking new reality—that the physical infrastructure of the AI boom isn’t just transforming technology or the economy. As I reported recently, massive AI data centers are also quietly reshaping local and state politics—turning once-niche zoning fights into national debates over the future of energy. 

The explosion of generative AI—and its insatiable demand for computing power—has transformed modest server farms into sprawling mega-complexes that can stretch across hundreds of acres, draw as much electricity as a midsize city, and guzzle millions of gallons of water. These facilities are no longer invisible; they’ve become flash points in local fights over power, water, land, and jobs.

Critics accuse the tech giants behind them of driving up electricity bills and straining fragile water supplies, and balk at public investment in the tax incentives and infrastructure investments they benefit from. Supporters counter that these projects are worth the cost for governments, bringing long-overdue economic growth and tax revenue to stagnant regions.

For now, the critics have the upper hand at the ballot box. A September poll found that only 44% of Americans would welcome a data center nearby. And the opposition hasn’t just been from the left: Despite the Trump administration prioritizing growth of AI infrastructure, Missouri Republican Sen. Josh Hawley and some others in his party have expressed concerns about the unchecked proliferation of data centers, and the rising electricity rates they could bring. Some observers have suggested this could become a populist wedge issue in 2026.

To be sure, there are no exit polls yet that clarify whether people cast their votes with data center issues on their minds. But the results suggest the issue resonated—especially in states where major new facilities are planned and electricity rates have risen. 

One thing is clear: As the AI land rush accelerates—and billions more in projects come online—you can expect those local fights over water, power, and land to keep shaping who wins and loses in American politics.

Subscribe to Fortune Gulf Brief. Every Tuesday, this new newsletter delivers clear-eyed, authoritative intelligence on the deals, decisions, policies, and power shifts shaping one of the world’s most consequential regions, written for the people who need to act on it. Sign up here.
About the Author
Sharon Goldman
By Sharon GoldmanAI Reporter
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Sharon Goldman is an AI reporter at Fortune and co-authors Eye on AI, Fortune’s flagship AI newsletter. She has written about digital and enterprise tech for over a decade.

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