Should Public Affairs Professionals Care if There's an AI Bubble?
Last Tuesday, voters sent Silicon Valley a message, and Wall Street read it loud and clear. By Thursday, tech stocks were in free fall. So should public affairs teams care? In today's short read, we break down what happened, why AI will likely see more bubbles than any technology before it, and why that matters far less than you probably think.
The Ballot Box Collides With The Server Farm
Data centers were directly on the ballot in the 2026 midterms. Voters sided with limiting data center development in 40 of 41 local ballot measures. Forty of 41. Name another issue in American politics where you can get that kind of agreement. Turns out that the frontier labs suggesting that the range of outcomes for AI is somewhere between destroying all white-collar jobs and destroying all of humanity is bad politics. Who could have seen that coming?
Statewide races told the same story in the states that matter most to AI's buildout:
🔱 Texas. The state with more data center capacity than any other Texas, unseated Greg Abbott and elected Gina Hinojosa governor. She promised a moratorium on all data center approvals until the Texas Legislature writes new protections.
🔱 Georgia. Governor-elect Keisha Lance Bottoms pledged an executive order pausing new data center approvals. Democrats also won a 3-2 majority on the Public Service Commission, the board that sets power rates, for the first time in three decades.
🔱 Ohio. Governor-elect Amy Acton backs a conditional moratorium unless developers cover their utility costs, use union labor, and meet environmental standards.
🔱 New York. Gov. Kathy Hochul, freshly reelected, already imposed the nation's first statewide moratorium on new hyperscale data centers this summer.
Add it all up and the number is staggering. Nine states now have a governor or governor-elect who has promised or imposed a pause on new data centers. Those states hold 158.6 gigawatts of planned data center capacity, about 41% of the entire U.S. pipeline.
Wall Street Was Already Nervous
The election results collided with fears investors had been nursing for months: Big Tech is spending hundreds of billions of dollars on AI infrastructure, and nobody is sure when the bill gets paid back.
Thursday was brutal for tech stocks. The Nasdaq fell 5.52% in a single session, its worst day since April 2025. The sell-off erased about $2.5 trillion in market value. Nvidia alone dropped more than 9%. Even after a Friday bounce, the Nasdaq finished the week down 3.4%, its fourth straight weekly loss.
A Financial Bubble Is Not A Technology Bubble
Here's the distinction getting lost in the headlines. A financial bubble is about an investment thesis. A technology bubble would mean the technology itself doesn't work. Those are very different things, and history has shown us the difference.
Start with the dot-com bust. Telecom companies buried millions of miles of fiber-optic cable in the late 1990s. Then the Nasdaq lost nearly 80% of its value, and giants like WorldCom and Global Crossing collapsed into bankruptcy. Much of that fiber sat dark for years. Then it became the backbone for YouTube, Netflix, and the smartphone in your pocket.
Railroads ran the same play more than a century earlier. After the Civil War, America overbuilt railroads on borrowed money. In 1873, Jay Cooke & Company, the bank financing the Northern Pacific Railway, collapsed and set off a national panic. Roughly a quarter of the nation's railroads went bankrupt. Investors were wiped out. The tracks stayed. New owners bought them at a discount. The Northern Pacific was reorganized and finished its line in 1883, and much of that route still carries freight trains today.
Those bubbles changed who owned the cables and the tracks. They never changed where the technology was headed. The internet and railroads were financial bubbles. Theranos was a technology bubble.
AI Will Have More Bubbles Than Anything Before It
To understand where AI is in the bubble trajectory, it's critical to remember how fast we got here. ChatGPT launched on November 30, 2022, kicking off the AI Age. That's not even four years ago. Today, more than 1.2 billion people use it every week. Most Americans of working age now use generative AI. The St. Louis Fed puts the number at 61%. Now rewind to late 1998, roughly the same distance from the day the internet opened to commercial traffic. Pew found just 41% of Americans were going online at all. That's about 50% more adopters in the same amount of time in the AI Age. Simply put, AI is the fastest-growing technology in the history of the world.
That speed means bubbles will likely inflate and pop faster than ever. Railroads ran one boom-and-bust cycle over decades. The internet took about one decade. AI is likely to cram several cycles into much shorter time spans. Expect more spikes, more crashes, and faster churn between winners and losers than railroads or broadband ever saw. Some of today's AI darlings will be tomorrow's Pets.com.
But financial bubbles don't stop technology. The models, the chips, and the data centers that do get built will still be there when the dust settles, and someone will put them to work.
What This Means For Public Affairs
The bubble debate is a Wall Street question. If you're invested in tech stocks, by all means care, but that's not the beat of this newsletter. Our focus here is on how AI is driving the work of public affairs teams. And the question for that purpose remains: is your team using AI better this month than it did last month?
Stock prices will swing. But the tools that help teams find the influencers who shape outcomes, test messages, and deliver them with precision keep improving every week, regardless of what the Nasdaq does.
Meanwhile, the data center fight is moving from ballot boxes into statehouses and utility commissions, which makes it one of the busiest public affairs battlegrounds of 2027. Ironically, the very AI that is the subject of these policy debates will also drive the outcomes of those debates, by way of the purpose-built public affairs tools that AI spawns.
The railroad investors who lost everything in 1873 were not wrong about trains. They were wrong about timing and price. Public affairs teams don't need to time the market. They just need to keep laying track.
Two Ways To Operationalize This Email
🔱 Separate the stock ticker from your roadmap. When leadership asks whether the AI bubble changes your plans, answer with what your AI tools delivered this quarter, not what Nvidia stock did on Thursday.
🔱 Build around capabilities, not vendors. Churn is faster than ever in the AI Age. Many legacy public affairs tools are already obsolete. Design your workflows around what AI does for you, like intelligence, targeting, and creative, so you can swap providers when one stumbles.