Meta has warned that the outcome of the US midterm elections could make it more difficult to build the data centres needed to support its expanding artificial intelligence ambitions. The concerns come as public opposition to large-scale infrastructure projects grows and technology stocks face a significant market sell-off.
Dina Powell McCormick, Meta’s President, discussed the challenges at the WSJ Tech conference, arguing that Democratic electoral gains could bring greater scrutiny to data centre construction. She also acknowledged that technology companies have not done enough to communicate the benefits of their infrastructure investments to local communities.
“The visible sort of manifestation of AI is a data centre,” Powell McCormick said, noting that residents can object to having these facilities built in their communities. She added that broader public sentiment towards AI is becoming an increasingly important consideration for the industry.
Data Centre Expansion Faces Greater Scrutiny
Meta has spent two decades developing the data centre infrastructure supporting its social networking platforms, with facilities now operating across 23 US states. However, its next phase of expansion involves significantly larger projects, including five planned developments, each designed to support at least one gigawatt of capacity.
Powell McCormick expects future developments to face more extensive reviews, with companies increasingly required to demonstrate that local communities support their construction.
The infrastructure is also central to Meta’s broader AI strategy. Its Muse AI agent has reportedly attracted 10 million users, with the company seeking to expand the service to reach billions of people. Meta views its infrastructure investments as supporting a wider range of AI opportunities rather than relying on a single product to generate returns.
Opposition to data centre development has also become a political issue. Numerous restrictive ballot proposals were considered during the election cycle, while Democratic candidates advocated for slowing AI and data centre expansion, including calls for a nationwide construction moratorium.
Meta Looks to Secure Community Support
To address concerns surrounding its infrastructure expansion, Meta has developed an approach focused on demonstrating economic benefits to host communities.
The company has offered to fund the electricity required by its data centres and direct additional tax revenue generated by the facilities towards local priorities, including teachers and first responders. Meta also emphasises local employment opportunities and works to secure bipartisan support before construction begins.
Powell McCormick acknowledged that securing approval will become increasingly difficult but suggested that the industry is beginning to identify approaches that can make projects more acceptable to local governments and residents.
Technology Stocks Face Major Sell-Off
Political uncertainty surrounding AI infrastructure coincided with a substantial decline across global technology markets.
The Nasdaq fell 5.5 percent during Thursday trading, wiping an estimated $2.5 trillion from market valuations and pushing the index into correction territory. The decline subsequently spread to Asian and European markets.
NVIDIA shares dropped more than nine percent, while the so-called Magnificent Seven technology companies collectively lost approximately $1 trillion in market value during a single trading session.
The downturn also affected Asian technology stocks. South Korea’s Kospi fell sharply enough to trigger a circuit breaker designed to temporarily halt trading during periods of extreme volatility. The index ultimately closed six percent lower, while semiconductor manufacturer SK Hynix recorded losses exceeding 10 percent.
Despite the sell-off, the Nasdaq remains above its level from a year earlier and has maintained a positive return for the year.
AI Infrastructure Becomes a Growing Business Challenge
Meta’s concerns highlight a broader challenge facing the technology industry as investment in artificial intelligence increasingly depends on physical infrastructure.
The expansion of AI models and services requires substantial computing capacity, electricity and data centre construction. However, these projects can face resistance over energy consumption, environmental considerations, local resources and their impact on surrounding communities.
For companies such as Meta, securing the infrastructure necessary to compete in AI will increasingly depend on more than financial resources and technological capabilities. Building relationships with local governments and demonstrating tangible economic benefits may become just as important to determining how quickly the industry can expand.
