After Democrats sweep midterms, tech world turns its eyes to orbit for data centers

Within hours of Democrats taking both the House and Senate in Tuesday's midterms — sweeping races across the country and notably in Texas, a national data center hotspot — Elon Musk was already looking up. "Data centers in space looking pretty appealing right now," he posted on X in the early hours of Wednesday morning.

Data centers in space looking pretty appealing right now.— Elon Musk

The post landed after a midterm cycle in which Musk spent more than $400 million of his own fortune backing Republican candidates, all of whom lost. Many of the winning Democratic candidates had campaigned explicitly against data center expansion, citing energy demands, land use, and local impacts. The results sent a visible jolt through the tech industry's online communities.

Musk's employees, tech investors, AI researchers, venture capitalists, and industry fans joined the chorus on social media. Jordan Lasker, the person behind the X account "Crémieux" — a popular follow in tech circles, known for posting race-based pseudoscience, according to Wired — declared that space-based data centers were "an incredible idea and anyone who doubted them didn't think enough about tonight's election results." Soham Mehta, a research fellow at the techno-optimist think tank Foundation for American Innovation, argued that underwater data centers should also be on the table.

Data centers in space are an incredible idea and anyone who doubted them didn't think enough about tonight's election results.— Jordan Lasker, operator of X account "Crémieux"

The idea is not purely speculative. Several major players are already pursuing compute in orbit. Google has launched a satellite it says contains "data center class TPU" hardware. SpaceX says it aims to deploy "thousands of AI satellites starting as soon as late 2027." Blue Origin has filed with the Federal Communications Commission for a permit to launch 50,000 satellites constituting an "orbital data center system." Startup Starcloud claims to have carried "the first Nvidia H100 GPU into orbit" in November 2025, according to Wired.

Despite the momentum, experts note that in-orbit data centers face serious practical constraints: they are significantly more expensive than land-based facilities, cannot scale to hyperscale size, and are subject to the risks and uncertainties of satellite launches. Heat management and radiation exposure add further engineering challenges.

Back on Earth, the picture in Texas is more complicated than the social media reaction suggests. Democrats won control of the Texas House of Representatives, but Republicans retained the state Senate — a split that will shape what the new majority can actually do about data centers.

will probably be stymied a bit.— Robert Paterson, professor of land use and environmental planning, University of Texas at Austin

Paterson told Wired that the divided legislature means immediate attempts at change will face resistance. But Adrian Shelley, director of Public Citizen's Texas office, noted that the governor could act more quickly through executive orders or by requesting the resignations of politically appointed officials at state agencies — including the Texas Commission on Environmental Quality, the Public Utility Commission, and the Texas Water Development Board. Those agencies have the authority to levy fines for violations of state law and, in extreme cases, to revoke permits.

A longer-term lever could involve county-level authority. Paterson noted that nearly half of Texas data centers sit in unincorporated territory, outside the reach of city zoning laws. Under the state's so-called Dillon's Rule, Texas counties only hold powers specifically granted to them by the state — they lack the zoning authority that would allow close regulation of data center projects. Paterson argued that even in a split legislature, anti-data-center sentiment crosses party lines enough that lawmakers could propose giving counties "limited zoning authority over data centers." The new attorney general could also theoretically adjust the state's biannual handbook, which defines the limits of county authority.

Developers, meanwhile, have a significant protection: Texas law grants particularly strong "vested rights" to projects once permits are approved, shielding the terms of those projects from future regulatory changes even before construction begins, according to Paterson.

Data centers were a decisive factor in this blue wave.— Adrian Shelley, director, Public Citizen Texas office

I will say the data center industry hasn't shown a lot of interest in working with state lawmakers or local leaders, and I will be interested to see if that changes.— Adrian Shelley, director, Public Citizen Texas office

Shelley said the upcoming Texas legislative season will be "very interesting" given how central data centers were to the election outcome. Whether the industry engages with the new political reality on the ground — or keeps its gaze fixed on low Earth orbit — remains to be seen.

Why it matters — The 2026 midterm results have put the data center industry — a major driver of energy demand and land use across the U.S. — on a collision course with newly empowered Democratic legislators, with the outcome likely to shape where and how AI infrastructure gets built for years to come.

Reported by wired.com, dnyuz.com, itmagazine.com, datacenterdynamics.com