Produced by: Market Value Finance

Tech companies are pouring ever more investment into AI, but residents living near data centers face a different bill to reckon with: Is there enough electricity? Who pays for expanding power supply infrastructure? And how much do local communities actually get in return after companies receive tax incentives?

These questions have become even more politically charged in the wake of the U.S. midterm elections.

On November 4 local time, Musk mocked his election campaign defeat by saying that "the space laser didn't work." According to foreign media reports, Musk donated at least $474 million (about 3.183 billion yuan) to the Republican Party during the U.S. midterm election cycle, making him the largest publicly recorded donor within a single election cycle.

In Texas, where several of his businesses are located, Democrat Gina Hinojosa won the gubernatorial race. Her stance on data center expansion has also prompted the tech industry to reassess the local investment climate.

On November 4, Musk's personal net worth shrank by $33.5 billion (about 225 billion yuan) overnight. Yet compared with Musk's lost wealth, people are more focused on a bigger question: why have data centers—once welcomed by local governments—now become a controversial topic in elections?

In the past, the most eye-catching aspect of data center projects was often the investment figure. Construction plans worth billions or tens of billions of dollars easily bring to mind jobs, tax revenue, and new industrial opportunities.

But for a project to truly break ground, it needs to connect to the local power grid—and some also require large amounts of water. The numbers announced at investment events later turn into power supply agreements, infrastructure construction plans, and resource arrangements that require local government coordination.

How large the investment scale is and how much benefit local residents can receive are two accounts that need to be calculated separately.

According to Reuters, Hinojosa advocates pausing new data center projects until the legislature strengthens protections for local communities, and calls for canceling related tax incentives. These are still policy proposals, and how they will be implemented depends on follow-up actions.

More notably, Texas's scrutiny of data centers had already begun before the election.

A Galaxy announcement in September this year showed that, according to an instruction issued by the governor in August, Texas's grid operator is reviewing data center projects awaiting grid connection, and the process is expected to take several months. This means uncertainty over the construction pace predates the outcome of this gubernatorial election.

This also explains why "who pays the bill" has become an unavoidable question.

Companies paying routine electricity bills is only part of it. If new electricity demand requires expanding transmission lines, substations, and other facilities, who bears these investments and how they are recovered also need to be clarified.

If facilities have already been built but the originally planned projects are scaled down or even canceled, how should the upfront investment be handled?

For local residents, these issues are more immediate than how many chips a data center is equipped with. Companies can present future technological breakthroughs, and residents have every right to demand clarity on the project's impact on public resources and living costs.

Of course, it cannot be concluded from this that data centers will definitely drive up residential electricity prices. Power supply conditions, charging mechanisms, and project arrangements differ across regions. New large customers may help share the fixed costs of existing facilities, or they may bring new expansion needs—each case must be judged on its own merits.

What truly needs to be clarified is how new costs are shared and whether promised local benefits can be delivered.

For developers, these discussions will ultimately affect project timelines.

A completed building does not mean electricity can be connected immediately; equipment in place does not mean computing power can be delivered to customers right away. If grid connection is delayed, revenue realization may be pushed back, while the funds already invested still carry costs. Projects that originally appeared to offer attractive returns may also need to be recalculated.

Tax incentives, power supply conditions, and approval arrangements all affect this return sheet.

Musk's joke is eye-catching enough, but what data center developers face is far more concrete: when the next campus can be connected to power, what facilities need to be added, and who bears the costs.

Before announcing the next huge investment, explaining this bill clearly will likely become increasingly important.

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