Ohio race turns data center politics into capital risk

Four months before the midterms, Ohio's Senate race has become a referendum on data center development. The National Republican Senatorial Committee sent a memo to major tech and AI firms, first reported by Axios, warning that public opposition to AI infrastructure is damaging enough to cost the GOP a seat — and, the committee argues, to teach candidates in every data center state that the safest campaign is one against the next project.

The contest matches Republican Sen. Jon Husted with former Sen. Sherrod Brown. Brown has spent millions on ads calling Husted "the face of data centers in Ohio." A Fox News poll this month gives Brown an eight-point lead. The NRSC memo calls data centers a "sleeper issue for the entire election cycle" and urges AI firms to be more aggressive in making the case for development, arguing the industry has not effectively communicated "who benefits, who pays, and why a community should want one."

The warning to the industry is blunt: "If he loses and data centers get the blame, politicians across the country will take notice — and they will not go near the next one." For private funds underwriting data centers, that sentence contains the risk. Approvals are the asset. A political shift that slows or stops entitlements delays projects before anyone signs a lease or moves in.

Pennsylvania shows how quickly support can turn. Just over a year ago, Gov. Josh Shapiro stood with President Donald Trump in Pittsburgh and touted $90 billion in AI infrastructure and energy investment. The Shapiro administration had promoted data centers as a critical economic driver, and proposed projects followed. Now, past support for data centers is increasingly treated as a reelection risk. The NRSC argues the stakes extend beyond Ohio: a Husted defeat would hand a Senate seat to a vocal critic and tell candidates in other key data center markets that campaigning against the industry works.

That memo is a striking admission from a party that has largely backed the build-out. The issue has already moved into congressional and gubernatorial races from Wisconsin to Florida, according to Bisnow's report. The change is bipartisan: Democrats and Republicans alike now treat the industry as a liability.

None of this has stopped investors from seeking data center deals. Private Real Estate Daily has covered AI job growth changing office demand in seven cities. It has also covered a $450 million Tri-State portfolio sale whose value lay in the unused power capacity of an IBM-era campus. Those deals were underwritten in a different political environment.

The next round of underwriting will need to price approval risk, and that price just went up. The midterms will test whether the NRSC memo is a warning or a self-fulfilling prophecy. For private real estate, the number to watch is not in any poll. Watch for the first developer to cite community opposition in a project delay. Watch for the first fund to write down an option on land it can no longer entitle. At that point, political backlash changes where the money goes.