Podcast Summary: Thoughts on the Market

Episode: The Political Cost of the AI Buildout
Host: Ariana Salvatore (Head of Public Policy Research, Morgan Stanley)
Date: February 18, 2026

Episode Overview

This episode explores the political ramifications of the ongoing AI infrastructure buildout in the United States, with a particular focus on voter perceptions of affordability, the impact of data centers on electricity prices, and the potential influence on the upcoming midterm elections. Ariana Salvatore analyzes voter sentiment in key battleground states, recent policy developments at local and federal levels, and outlines the policy options available to the Trump administration as public concern about AI grows.

Key Discussion Points & Insights

1. Voter Sentiment Shifting Against AI Development

• Public concern over AI and data center impact:

  • Many voters are increasingly linking rising electricity bills directly to the proliferation of AI data centers.
  • There is growing apprehension about job losses and local economic effects.

  "Voters are associating the rise in electricity bills with AI infrastructure, and we think that could be an important read across for the midterm elections."
  — Ariana Salvatore [00:33]

• Regional, not national, impact:

  • While the national effect of data centers on electricity inflation remains "modest," certain regions are experiencing heightened cost pressures.
  • Example: Pennsylvania is cited as a state where voter anxiety is particularly acute.

2. Polling Data: Economic Anxiety and Distrust of AI

• Recent Pennsylvania survey findings:

  • 2x as many believe AI will hurt rather than help the economy.
  • 55% think AI is "likely to take away jobs in their own industry."
  • 71% are "concerned about how much electricity data centers consume."

  "More than half—55%—think AI is likely to take away jobs in their own industry, and 71% said they're concerned about how much electricity data centers consume."
  — Ariana Salvatore [01:20]

• Comparable backlash in other battleground states:

  • Arizona and Michigan have seen voter-led rejections of new data center projects.

3. Political Impact: Data Centers as an Election Issue

• Candidates faring well on affordability:

  • Recent off-cycle elections saw that candidates campaigning on affordability—and those opposing data center construction—performed strongly.

• Forecast for upcoming midterms:

  • The link between AI, costs of living, and voter sentiment is likely to play a major role in shaping the 2026 midterm agenda.

4. Policy Response: Local vs. Federal Action

• Local policy is leading:

  • Most action regarding cost management and regulation is happening at the state level rather than federally.
  • States such as Georgia, Michigan, Ohio, and Texas are debating "who should pay for grid upgrades."

  "More of the policy action here will actually continue to be at the local rather than federal level."
  — Ariana Salvatore [02:19]

• Public Utility Commission initiatives:

  • Adoption of "large load tariffs" in several states, requiring data centers to pay a greater share of grid-related costs.
  • Measures include:
    • Upfront grid cost requirements
    • Long-term contracts
    • Minimum demand charges
    • Exit fees and collateral requirements

  "All of which are designed to prevent costs from spilling over to households."
  — Ariana Salvatore [02:50]

5. Federal Administration Approach

• Limited federal action leads to alternative affordability moves:

  • The Trump administration is expected to focus on other aspects of affordability, like housing and trade, where unilateral action is possible.
  • The Supreme Court may soon rule on the President’s authority under the IPA for reciprocal tariffs, influencing trade and affordability strategy.

  "A decision that constrains that authority could give the President an opportunity to pursue a lighter touch tariff policy in response to the public's concerns around affordability."
  — Ariana Salvatore [03:27]

6. The Road Ahead: AI as a Persistent Flashpoint in Election Year

• The tension between "AI supremacy" and the "rising everyday costs for voters" is set to be central to the 2026 midterm narrative.

• Expect the President's upcoming State of the Union to address both AI leadership and the costs of associated infrastructure, with attention to affordability.

  "That tension between AI supremacy and rising everyday costs for voters will be critical in shaping the electoral landscape into November."
  — Ariana Salvatore [03:56]

Memorable Quotes & Timestamps

• On voter backlash:

  "Voters are associating the rise in electricity bills with AI infrastructure, and we think that could be an important read across for the midterm elections."
  — Ariana Salvatore [00:33]

• On state initiatives to shield households:

  "All of which are designed to prevent costs from spilling over to households."
  — Ariana Salvatore [02:50]

• On the coming electoral clash:

  "That tension between AI supremacy and rising everyday costs for voters will be critical in shaping the electoral landscape into November."
  — Ariana Salvatore [03:56]

Important Timestamps

• 00:00–00:44: Introduction and overview of AI, data centers, and rising electoral importance
• 01:10–01:50: Analysis of Pennsylvania survey and voter attitudes toward AI
• 02:20–03:00: Discussion around state vs. federal policy action, public utility commission steps
• 03:15–03:45: Supreme Court implications and administration's approach to affordability
• 03:46–04:04: Preview of the AI debate as an enduring election issue

Conclusion

Ariana Salvatore’s analysis suggests that the political costs of AI buildout are rising just as data center expansion becomes a local—and thus electoral—flashpoint. Regional electricity inflation, public anxiety about economic shifts, and local opposition to new data centers are intersecting in battleground states, promising to shape campaign strategies and policy responses all the way through the November midterms.