AI Data Center Bonds Fall After Democratic Midterm Sweep

Credit markets and stock prices for AI infrastructure developers fell Wednesday following a Democratic sweep in the U.S. midterm elections. Gina Hinojosa, the newly elected Governor of Texas who ousted Greg Abbott, called for an immediate moratorium on AI project development until state lawmakers establish sector safeguards.

This regulatory shift extends beyond Texas, as Democrats also won gubernatorial races in Georgia and Ohio. Governor-elects Keisha Lance Bottoms and Amy Acton both advocated for slowing data center construction during their campaigns. Analysts estimate that approximately half of proposed AI data center additions across the United States may now face stricter local scrutiny and pushback.

The market reacted sharply to these results. Junk bonds for Galaxy Digital, Cipher Digital, and SE Cosmos weakened, while CoreWeave saw its stock slide 7.2% to $49.85. CoreWeave's unsecured notes maturing in 2031 dropped to 79.5 cents per dollar of face value. Despite Hinojosa's push for a moratorium, Republicans maintain the majority in the Texas Legislature, which may limit her ability to formally change state policy.