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Just a few years ago, the subject was basically taboo.

Katherine Ricke, a University of California at San Diego sustainability professor, turned to face the roomful of attentive scientists at the American Geophysical Union a few weeks ago. In any other year, she would have been about to break one of climate science’s biggest taboos.
“Geoscientists know very well at this point that solar geoengineering is not a very good substitute for emissions reductions,” she said. “The question that comes next, then, is, Is solar geoengineering a complement to mitigation?”
The answer, she then argued, was yes. While cutting greenhouse gas emissions might bring down the planet’s temperature in the long term, she said, it would not do so immediately. But spraying sulfate aerosols into the stratosphere was pretty cheap, and it could quickly help relieve the planet’s fever. “Solar geoengineering has a rapid but temporary effect on global temperatures, while the effect of emissions reduction is deferred but persistent,” she said.
Ricke went on to ask whether the economics of solar geoengineering made sense — and about its risks. Would it deprive other important efforts of research funding? Probably not. Could it encourage the public to procrastinate on cutting emissions? Maybe yes.
Yet perhaps the presentation’s biggest surprise — for people who have long thought about the issue — was that nobody in the audience of normal climate scientists gasped. Nobody shooed Ricke out of the room or told her that her talk didn’t belong in a session devoted to achieving net zero — that is, to climate mitigation, to reducing carbon pollution, not blotting out its effects.
To get a sense of what American climate scientists are talking about, you can do a lot worse than attending the annual fall meeting of the AGU, where more than 20,000 scientists come to network, present new research, and gossip about their superiors. This year, AGU was held in the cavernous Moscone Center in San Francisco. The arrival of tens of thousands of people immediately broke the city’s post-pandemic downtown; Starbucks ran out of breakfast sandwiches and every restaurant within a quarter mile of the conference site was jammed before the 8:30 a.m. sessions.
AGU is almost always held, for some nonsensical reason, at roughly the same time as the annual United Nations climate conference, and the two events have a lot in common: They are bazaars, free-for-alls, half salon and half trade show, and each way too big for any one person to see. Yet by keen attention to sounds and signals, one can detect a vibe at both events. The vibe of this year’s AGU was clear: Geoengineering is here to stay.
This sincere interest in geoengineering and climate modification represents a broader shift in climate science from observation to intervention. It also represents a huge change for a field that used to regard any interference with the climate system — short of cutting greenhouse gas emissions — as verboten. “There is a growing realization that [solar radiation management] is not a taboo anymore,” Dan Visioni, a Cornell climate professor, told me. “There was a growing interest from NASA, NOAA, the national labs, that wasn’t there a year ago.”
At the highest level, this acceptance of geoengineering shows that scientists have seriously begun to imagine what will happen if humanity blows its goal of cutting greenhouse gas emissions.
Why the sudden embrace of geoengineering? Part of it is that the Intergovernmental Panel on Climate Change has become increasingly insistent that carbon removal is crucial — and opened the door to other once-taboo ideas.
But another part is that climate disasters seem to get bigger and bigger every year, and humanity seems to be growing more and more alarmed about them, yet no country plans to cut emissions fast enough to relieve global warming’s near-term dangers. 2023 was the warmest year in modern human history, but the Paris Agreement’s temperature goals remain far off. “It was always pretty clear that the kind of emissions reduction to stay below 1.5 [degrees Celsius] was never going to happen in any realistic scenario, but there was always a conviction that just by saying it was physically possible, it was going to inspire people into some kind of action,” Visioni said. “2023 has shown this to not be the case.”
Perhaps one more reason is that, for better or worse, geoengineering is already happening. Economists have long argued that stratospheric aerosol injection is so cheap that someone will eventually try to do it. Then, last year, Luke Iseman, a 39-year-old former employee of the startup incubator Y Combinator, claimed to have conducted rogue experiments in western Mexico delivering reflective sulfur molecules to the atmosphere using weather balloons. It’s unclear whether this “move fast and break things”-styled effort actually reflected any meaningful sunlight back into space. What it did do was awaken the Mexican government to a regulatory arbitrage. It responded by banning solar geoengineering.
Yet more serious attempts have been made at bringing geoengineering into the mainstream. In September, the Overshoot Commission, a panel of current and former world leaders — including an influential Chinese adviser and a former Canadian prime minister — recommended that the world begin to seriously study solar geoengineering. And Congress recently mandated that the White House Office of Science and Technology Policy study the technique — although the office’s resulting report also suggested that scientists are still treading carefully around it. Its hilariously curt title: “Congressionally-Mandated Report on Solar Radiation Modification.”
“The way that broader climate intervention has started to move into the mainstream has been kind of astounding,” said Shuchi Talati, a University of Pennsylvania scholar and former Energy Department official. “If you look at AGU of four or five years ago, if there was one [solar radiation management] panel, that was novel,” she told me. But this year, there were more panels and side conversations than ever. “You can feel it in the air that there was more interest.”
Ricke’s was far from the only geoengineering presentation in San Francisco this year. In a packed lunchtime session, Lisa Graumlich, AGU’s president, led a town hall about the organization’s draft proposal on how to research climate intervention ethically. “Are we attempting to play God? Do we have the right to do this? What risks are we willing to accept? Or … do we have the right not to?” Cynthia Scharf, a former UN adviser who helped lead a Carnegie Foundation project on how the world could possibly govern geoengineering, told the room by video conference. The crowd wasn’t exactly rewarded for attending: After every panelist had finished going through their introductions, the audience only had time to ask two questions.
Across the hall, more than 60 people were talking about a different kind of climate intervention. For years, scientists have known that the stability of a few glaciers in West Antarctica could mean the difference between quasi-manageable amounts of sea-level rise this century and a rapid, catastrophic surge. So small groups of glaciologists have now started to ask whether those specific glaciers — such as Thwaites, which holds a quadrillion gallons of water and is larger than Florida — could be engineered or modified somehow to slow their collapse.
Perhaps a berm could be built on the seafloor, in front of each of the glaciers, in order to prevent warm water from eroding them. Or maybe holes could be drilled into the glaciers, allowing the warmth of their subsurface to be vented to the surface. Glacial scientists have already met twice this year — at the University of Chicago and later Stanford — to begin hashing out the idea.
Another approach — using ships to spray ocean water into the atmosphere, thereby brightening clouds and reflecting more sunlight into space — was also the subject of several events. One scholar, Chih-Chieh Jack Chen, showed research suggesting that brightening the clouds over just 5% of the ocean surface could cool the planet enough to meet the world’s temperature targets — but that the climatic ripple effects of doing so might simultaneously raise temperatures in Southeast Asia by even more than what global warming would do alone. Others presented work showing that cloud brightening might accidentally shut down the planet’s westerly trade winds — or even silence the Pacific Ocean’s El Niño oscillation.
Then there were the carbon removal people, who arrived by the tens and who seemed to have graduated to a less controversial (and possibly more remunerative) plane than geoengineering. Most scientists seem to have accepted that carbon dioxide removal, or CDR, will need to happen to at least some degree. “CDR is a given. People don’t even consider it to be geoengineering any more, which is what the CDR people have always wanted,” Visioni told me. A new Department of Energy report, released during the conference, argues that by 2050, the United States might be able to suck 1 billion tons of carbon dioxide out of the atmosphere for a mere $130 billion a year, creating 440,000 jobs. In other scenarios — and not only those sponsored by the federal government — America seems likely to become the keystone of the global carbon removal industry, its vast geological capacity and fossil-fuel expertise giving it a competitive advantage.
In anticipation, venture capital and public-sector cash has surged into carbon removal, creating a corps of CDR startups with one foot in the geosciences and the other in Silicon Valley. Their employees were at AGU too, mingling in full force. “It was interesting how much industry was there — researchers at companies, even heads of companies,” Talati told me. “I’ve never really experienced that at AGU.” Employees from Lithos, Heirloom, Carbon Direct, Stripe, and Additional Ventures all registered for the conference; in what might be an AGU first, scientists and technologists sipped cappuccinos and nibbled pastries during an early-morning confab at the Salesforce Tower, a few blocks from the official conference site. “AGU is not the place where you would have expected to find these kinds of people, even just for CDR, so it’s interesting that they’re there,” Visioni said.
The whole thing presented both a stark contrast and an inescapable mirror to COP28, where oil lobbyists roamed the grounds. Some environmental old-timers grumble that the UN climate conference has transformed from a diplomatic meeting into a trade show. But maybe there is now so much money and interest and public attention directed at the climate problem that any major gathering about it will take on shades of the commercial. There are lots of rich people with huge amounts of money who want to help do something about climate change. At the same time, the United States government is looking like less and less of a long-term reliable partner on climate research. Sooner or later, someone is going to try to do more serious geoengineering than releasing a few balloons in Mexico. Scientists have started preparing for that day. Is that smart? I don’t know. But it seems like a better strategy than feigned ignorance about where we’re headed.
Editor’s note: This story originally misidentified the name of the person who conducted geoengineering experiments in Mexico. We regret the error.
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The odds of BAAJA passing likely grew a few degrees worse.
In the lead-up to the midterm elections, the outlook for passing the Senate’s bipartisan permitting reform deal during the lame-duck session was already highly uncertain. While environmental and clean energy advocates praised the transmission sections of the deal, a growing chorus warned of negative consequences from its provisions to fend off politically motivated attacks on energy projects, as well as its changes to tribal consultation in the federal permitting process. Prominent clean energy Democrats John Podesta and Representative Sean Casten of Illinois also piled on. President Trump, meanwhile, was not holding up his end of the bargain to release proposed wind projects held captive by Department of Defense reviews.
Post-election, the odds of the Bipartisan American Affordability and Jobs Act’s passage are likely a few degrees worse. Jared Huffman, the Democratic Representative from California who is next in line to lead the House Natural Resources Committee, reiterated his view that the Senate should hold off on a vote and take another pass at the bill in the next Congress, when Democrats have more leverage. Other Democrats who were sitting on the sidelines of the debate may also now feel emboldened by the party’s overwhelming win and agree that a better deal could be had by waiting.
Proponents of the bill view the election results as a clear endorsement of BAAJA. Energy bills were on the ballot, and “to reduce energy prices is to pass permitting reform,” Jason Grumet, the CEO of the American Clean Power Association, said during a call with reporters on Wednesday.
Jane Flegal, a senior fellow at the Searchlight Institute, argued on X that “most of the things” Democrats can do to address energy affordability at the federal level are in BAAJA, such as reforms to speed up the buildout of transmission lines, utility oversight, greater certainty for clean energy developers, and provisions to force data centers to cover their costs. “Dems shouldn’t wait on permitting. BAAJA is a good bill, and the filibuster and veto don’t go away in January,” she wrote. But the real reason not to wait, she added, is that if Democrats win the White House in 2028, they will need to “hit the ground running, especially on energy affordability,” and reform “takes years to implement.”
Joe Brazauskas, a partner at the government relations firm Bracewell, said during a post-election webinar on Wednesday that he’ll be watching for four indicators of how the permitting reform deal will fare in the coming days and weeks. First, will the senators who negotiated the deal come back with a major push for the bill?
So far, they don’t seem to be backing down from plans to put the package to a vote next Monday, November 9. “We don’t have more years to lose as clean energy projects sit on the sidelines, and there’s no guarantee Congress would ever find another compromise that would be able to pass the Senate,” Senator Sheldon Whitehouse of Rhode Island, one of the bill’s authors, told me in a statement. “Democrats ran and won on affordability, and this bill lowers costs for families and will allow us to start delivering on our election promises. It’s a bird in the hand. We’d be fools not to take it.”
Senator Martin Heinrich of New Mexico, the bill’s other Democrat author, provided similar comments to Politico. “We’ve been trying to pass permitting reform for the better part of a decade,” he said. “It doesn't necessarily get easier just because of who the chair is. This is the closest we have come to actually finding something that can get signed into law. I’m not going to wait.”
The second indicator is what Trump does next. Will he make any substantive wind farm approvals? Grumet said he doesn’t think the legislation will move forward unless a “significant number of those projects” being held up in the Department of Defense review process are released. With the Senate vote scheduled for Monday, the clock is ticking. Grumet was bullish that Trump would play ball, noting that “every interaction we’ve had with the administration affirms that they want to close this deal.”
There’s also the question of how hard the president will gun for the deal more generally. As I’ll explain, the bill could face steep hurdles with key Republicans in the House that may require the president’s cajoling to overcome. Several speakers in the Bracewell webinar suggested that Trump may want some legislative wins to cement his legacy. Whether that translates into a push in the lame duck, or a potential deal in the next Congress, remains to be seen.
The third indicator is whether and how the bill’s authors address the issues raised around tribal consultation and “project certainty” in an amendment before the vote. There are signs that these can be resolved. Before the election, Punchbowl News reported that the Coalition of Large Tribes, whose members control a large portion of tribal lands in the country, was negotiating to improve the bill with technical fixes rather than fighting it altogether. Several bill proponents also told me that fixes for project certainty were underway.
It’s still unclear, however, whether small technical fixes will be enough to rally more support for the bill in the House, or alternatively, if those changes turn out to be more substantive, whether they threaten the bill’s delicate bipartisan balance.
The last indicator is, will Democratic leadership support the bill? Senate Minority Leader Chuck Schumer has not yet shared his views. “The Democrats’ performance was so overwhelming last night that the outside groups that talk to Democrats, the ENGOs, have to be emboldened,” Brazauskas said. “They have very strong views on the Clean Water Act provisions, the Endangered Species Act provisions, Judicial Review, and I really think that that will impact how that’s viewed by Democrats on the Hill.”
If the bill does pass the Senate next week, it faces an uncertain road in the House, and not just because of opponents like Huffman. Republican leadership will have to make a strategic choice about where to send it.
The typical first step would be to refer it to the House Energy and Commerce Committee. At least as of a few weeks ago, however, the committee chair, Representative Brett Guthrie of Kentucky, was looking for changes to the transmission section of the bill, which would have costly consequences for Southeast electric utilities, as it would support the construction of new interregional transmission lines that compete with their business models.
If House leadership wants to avoid Guthrie’s committee, they could send the bill to the House Rules Committee, which could tee it up for a simple majority vote. The Rules Committee is also controlled mostly by southern Republicans, however, who may have some of the same sympathies as Guthrie. This is where Trump’s commitment to getting the deal done would likely be crucial.
Another option is to move the bill through “suspension of the rules,” a procedural tactic that allows the House to consider legislation without a rule from the Rules Committee — although this would mean the bill would require a two-thirds majority to pass. It is typically reserved for bills with broad consensus, such as when Congress renames post offices.
One final potential pathway is to attach a Senate-passed version of the bill to must-pass legislation, such as a government funding package or the annual military authorization bill. Congress successfully enacted the Energy Act of 2020 by attaching it to a consolidated appropriations measure after Donald Trump lost the presidential election to Joe Biden. That bill was not as controversial as BAAJA, however, and so the approach may be too risky.
Hanging over all of this, and affecting how the numbers stack up for a vote, is another question the Democratic landslide has now raised. How many House Republicans will even show up for work in the lame duck?
Democrats finally trounced Trumpism at the ballot box. But it required liberals and progressives alike to articulate more moderate views on energy and climate policy.
I’ll admit that when the polling first came in, I didn’t believe it.
A few months ago, my editor showed me the newest result from the Heatmap Pro poll that we run with Embold Research. For more than a year, we had been asking Americans whether they would support a data center planned near their home; since then, we had been watching the “support” number steadily tick down.
But the newest result beggared belief: 75% of Americans now said they would oppose a data center in their town. Most would strongly oppose it. When was the last time, I thought, that 75% of Americans agreed about anything? Was this real?
Sure looks like it. As Michigan’s newest senator-elect Abdul El-Sayed said earlier this year: People really effing hate data centers. And they apparently really hate Donald Trump, too, and the Iran War, and higher gas prices.
On Tuesday night, Democrats … well, pick your synonym. They routed Republicans. Annihilated them. Crushed them, broke them, and heard the lamentations of their donors. Democrats captured at least 54 seats in the Senate and could take more than 260 seats in the House. The national House vote snapped more than 15 points in their favor, and key demographic groups whose preferences have defined the Trump era — such as Hispanics, young men, and white voters without a college degree — all swung in the double digits to Democrats.
For millennials like me, the wave elections par excellence have been 2006, when liberals took back Congress from a desperately unpopular George W. Bush, and 2010, when the Tea Party caroused against Barack Obama. This election was bigger than either, on par with the anti-Watergate tsunami of 1974 that shaped the Democratic Party for a generation and put a new class of professional-minded reformers at its helm. Unlike in 1974, though, the new Democratic majority will not rely on an old guard of state’s rights conservatives. The South turned indigo on Tuesday night, it’s true, but that was thanks to the normal politics of booming American cities and suburbs, not century-old polarization left over from the Civil War. This is a new kind of Democratic mega-majority.
It will usher in a new kind of energy and climate politics. From the moment he rode down the escalator 11 years ago, Donald Trump has defined himself by his climate change denial. His antipathy for decarbonization and clean energy reached new heights in his second term, as his administration waged a war on renewables and dismantled the government’s already-weak ability to regulate greenhouse gas pollution. At the same time, it embraced the artificial intelligence boom and gave some of the world’s wealthiest companies a blank check to pollute.
Now that is all over. Although Trump still has two years left in the White House, he will limp to 2029 without a pliant Congress, a supportive public, or an aura of invincibility. We should, to be sure, expect at least a few Cabinet resignations in the next few weeks, so the expiring GOP Senate can confirm their replacements; and federal agencies will still roll their regulatory agendas uphill in case the GOP wins the White House in 2028. Some Trump policies — like his nuclear plan — may even meet with Democratic approval. But the administration’s fossil fuel revolution is over. And everything that Trump has done on climate and energy since taking office, especially his family’s penetration of favored mining firms, will soon face scrutiny in the new year.
That will all be good for the fight against climate change. And yet it would be wrong to presume that this new era will look like the last one — or that these new congressional Democrats will be Green New Dealers or even ardent environmentalists. “We cannot change anything unless we accept it,” Jung wrote, and Democrats have finally overturned Trumpism in part by accepting its real force in American politics. I don’t mean their willingness to accept Trump’s conduct, to be clear: The No Kings rallies and the Minneapolis rebellion saw to that. But since Kamala Harris lost, Democrats have for the first time treated Trump as a normal Republican opponent — and their fight against him not as a “battle for the soul of the nation,” as President Biden liked to put it, but as a simple verdict on a powerful establishment politician.
That has meant learning from Trump, and from his energy and affordability politics in particular. Chief among those lessons: Voters really, really care about low prices; they especially really, really care about cheap energy; and they will reward politicians who share their concerns. Zohran Mamdani, Mikie Sherill, and Abigail Spanberger pioneered these appeals last year, playing down their respective climate goals and (in Sherill’s case) running on cheaper power bills. State and congressional Democrats in 2026 picked up that strategy and ran with it.
They had help. Inexplicably, Trump undercut his promises to start no new foreign wars and cut energy bills in half by launching a new Iran war that nearly doubled some energy prices. By one estimate, Americans have paid more than $100 billion in higher fuel costs since March. Trump’s compact with voters broke in that moment. Tuesday is the result.
Democrats know it. Look at Annie Andrews, for instance, the new Democratic senator from South Carolina (!). She wants to “suspend the gas tax, unleash American energy, and get gas prices down” — in other words, she seeks to cut taxes on fossil fuels. But Andrews also wants to restore the solar and wind tax credits and increase public transit spending. And she devotes an entire paragraph of her policy brochure to the need for bipartisan permitting reform.
What distinguishes Andrews isn’t her toughness on fossil fuels, but her opposition to data centers. She wants a two-year nationwide moratorium on the facilities, to end their tax breaks, and force them to stop passing on higher electricity costs to ratepayers. Almost every single Senate Democrat who won on Tuesday, in fact, promised to make data centers pay for their full cost of electricity service — it might be the caucus’s most unifying policy. (The bipartisan permitting bill, whose fate remains uncertain as of writing, would mandate it.)
Much like Andrews, this new class of congressional Democrats sought to embrace every kind of energy source except for coal. Senator-elect James Talarico, a Democrat of Texas — get used to saying that — promised voters that “we can add to our hundreds of thousands of oil, gas, wind, solar, and battery jobs by creating new jobs” in geothermal and hydrogen. Mary Peltola, who seems likely to clinch her Alaska Senate race, argued for oil and gas’s ongoing importance, too. Adam Hamilton of Kansas, Scott Colom of Mississippi, and Andrews of South Carolina all spoke of their “all of the above” energy policy. None of these candidates are climate deniers — they all want to restore the wind and solar tax credits, and many spoke of increasing climate resilience funding — but they all have vowed to grow the energy system, not revolutionize it. Even Abdul El-Sayed, who wrote a 2019 Guardian op-ed advocating for the Green New Deal, disavowed that policy and opposed a government EV mandate.
The new state-level Democrats will push the party even further in this direction. Had Talarico alone won in Texas, he might have been able to walk a careful line on fossil fuels, recognizing oil and gas as the status quo without seeking to expand their reach. But Gina Hinojosa will also be the state’s next governor, with a much more direct role in managing the Permian Basin. To keep her job, she will have to accept that Texans' livelihoods depend on oil and gas, in the same way that Mamdani has had to recognize the reality of Wall Street's centrality to the economy of New York City. Democrats will face tough trade-offs.
They also won’t be any more radical about the 10% of U.S. emissions that come from American agriculture. If the Democrat Scott Colom holds out and wins Mississippi’s senate seat, it will be in no small part thanks to a viral commercial chiding the Republican incumbent for telling voters to choose a cheaper protein than beef. “Pick another protein?” an everyman griller asked the camera. “I’d rather pick another senator instead.”
This is one reason why Tuesday’s victory might feel a smidge bittersweet for some climate defenders. Democrats have finally trounced Trumpism at the ballot box. Progressives like El-Sayed have shown they can win in battleground states, provided a favorable national environment, and moderates have stormed the heart of MAGA America.
But doing so required everyone, liberals and progressives alike, to articulate more moderate views on energy and climate policy. As recently as 2020, belief in the climate crisis unified the Biden coalition. Now, Democrats have tacitly accepted — as a price of winning big majorities — some cognitive dissonance between what they think the science says (that climate change is an urgent and worsening problem) and what domestic politics demands (that voters still care more about cheap energy).
In other words, more than just the Trump era ended on Tuesday. The old Obama dream finally died too. In the wake of the 2012 election, Democrats imagined a permanent progressive majority shorn of right-leaning white voters. That fantasy never materialized, and chasing it may have even led the party astray. Now they have built a new congressional coalition with energy moderates at its core.
Which is not to say that Democrats will give up on decarbonizing the economy. We can expect this new congressional class to expand clean energy, push for more transmission lines, and revive electric vehicle subsidies as a solution to high gas prices. Senator Jon Ossoff of Georgia, who won one of the night’s most convincing victories, repeatedly mentioned microplastics and “forever chemicals” in his speeches, linking the contamination of human bodies to the corruption of the body politic. The fight against conventional air and water pollution, I suspect, will come back big.
The next era of American climate politics, in other words, will look different from the last one. Fossil fuel companies have long been climate advocates’ primary foil. At the national level, data centers and Big Tech could eclipse them. At least one former climate activist won on Tuesday by running against data centers and large-scale solar. Artificial intelligence, after all, is the country’s fastest growing form of industrial energy use, and it creates far fewer jobs than a chip fab or steel mill. For these reasons, you can imagine a kind of reformed normie environmentalism with anti-AI characteristics taking root in the next administration. Perhaps it already has.
Decarbonizing the economy is steady and long-term work, “a slow boring of hard boards,” to quote the political thinker Max Weber, and the politicians who next turn the screws hardest may not sit on Capitol Hill. The historic size of Tuesday’s swell means Democrats won key state offices that they haven’t held in a generation — on public utility commissions, fossil fuel regulators, and in state legislatures. They will be eager to wield their powers. With its new Democratic trifecta, for instance, Pennsylvania could allow community solar, mandate battery storage, and restrict utility profits. Decades of low-hanging climate policy will soon be plucked.
Amid all of this excitement, Democrats should keep failure in mind — the president’s and their own. Since 2020, Democrats have tried to revolutionize the energy system, reindustrialize the country, and overhaul the economy without recognizing the existence of any trade-offs between those goals. They failed, and voters hated it. President Trump and Republicans tried to reinthrone fossil fuels, give birth to a “superior intelligence,” and otherwise bring back a gloomy spoof of the midcentury American economy — without accepting any trade-offs. They failed too, and as we learned last night, voters hated them even more than they hated Biden.
The United States really does need to get better at commercializing batteries and making electric vehicles; it really must cut pollution, lower energy prices, and significantly boost its electricity generation. Both parties have failed to make progress on those goals so far. Democrats have shown they can learn from Donald Trump’s mistakes. Now we’ll see if they can learn from their own, too.
Clean energy stocks are up, unless they’re firm.
The market has rendered its provisional judgment on the midterm elections, seeing threats to the AI datacenter complex and Elon Musk. Here are the winners and losers of the big blue wave.
Elon Musk’s companies
Tesla shares fell over 3% on Wednesday while SpaceX shares fell 3.8%.
Before the election, several Congressional Democrats who will now be serving in the majority made it clear that their oversight powers across a number of domains would be turned on the Trump-supporting sometimes-trillionaire.
“We think the market fears Democrats will look to target Tesla, as Tesla CEO Elon Musk heavily campaigned for the Republican Party leading up to the election,” Morningstar analyst Seth Goldstein wrote in a note to clients.
AI-related companies
But of course Elon Musk isn’t just a Trump-connected electric car and battery chief executive, he also runs an artificial intelligence model developer and “neocloud” (i.e. a builder and renter out of data centers for artificial intelligence) by the name of SpaceX (it also launches rockets).
Several other companies who rent out compute to AI developers saw their shares decline, including CoreWeave (down 10%) and Nebius (down over 6.5%), as Democrats who criticized data center developers won up and down the ballot, including at the state level in data-center-heavy states like Georgia, Texas, and Ohio.
The results imply “incrementally negative AI sentiment on greater expectations for data center restrictions,” Morgan Stanley equity strategists wrote in a note to clients.
“Any investors adding 10 or more GW of compute to SpaceX's SI business in 2027 may want to revise down. State pushback on terrestrial/atmospheric datacenters has a head of steam,” Morgan Stanley analyst Adam Jonas wrote in a note to clients.
Semiconductor companies Nvidia and Broadcom were also down around 3% and 2% respectively.
Firm power companies (including clean ones)
Of course those data centers are largely consumers of power, so as the data center industry got sick, the power industry caught a cold.
Companies that own fossil fuel and nuclear power plants were hit hard today. Shares of Vistra (which has a 44,000-megawatt power plant portfolio) were down almost 14%, Constellation (which owns and operates 21 nuclear reactors) was down 6% and Talen (which owns 14 power plants largely in the PJM region) fell 8.5%. GE Vernova, which has been riding the AI boom by selling gas turbines to power plant developers, was down over 9%.
“Laggards include anything that touches data centers,” Jefferies analyst Julien Dumoulin-Smith wrote in a note to clients. “Expect a difficult unwind day given the scale of the upset in the single biggest state for data center activity,” he wrote, referring to Texas.
And Fervo, the enhanced geothermal developer, really is being treated like a "normal" energy company: its shares were down 4.5%. X-Energy, the advanced nuclear developer, was also down almost 8.5%.
Utilities, especially one specific utility
The vertically integrated utility Southern Company was essentially on the ballot by way of its subsidiary Georgia Power in the Georgia Public Service Commission race and lost. Georgia Power represents about 60% of Southern’s earnings. “Southern Company remains the clearest commission-control risk after Democrats sweep Georgia’s two PSC seats,” Dumoulin Smith wrote.
Across the whole sector, newly elected governors and public utility commissioners could put pressure on the return on equity that utilities are allowed to earn on their investments.
“ROEs are one of the only things utility regulators have to reduce rates,” Rains told me.
Clean Energy
In the energy sector, the big winners were renewables. The S&P Global Clean Energy Transition Index was up over 3% today, while the Danish wind manufacturer Vestas was up almost 3%, while shares in Orsted, the Danish wind developer, were up around 5%. Domestic solar First Solar was up 5% while Sunrun, the solar installer, was up almost 1.5%.
“The blue wave improves the federal outlook for renewables, with Democratic leaders pledging to restore wind and solar tax credits if they regain congressional control,” Dumoulin-Smith wrote.
But the Democratic victory does not necessarily mean the end of the war on offshore wind, although it puts the industry’s defenders in a stronger position.
“While a positive development, we believe it is premature to call a renaissance in US offshore wind,” Morningstar analyst Tancrede Fulop wrote in a note to clients.
EV makers not named Tesla
Shares in Rivian were up almost 6%, while Lucid shares were up almost 12%, indicating bullishness for the larger EV sector as Democrats may be able to push for a return to subsidies for electric vehicles or harsher mileage standards while also putting pressure on Elon Musk personally.
The stock market as a whole
The market is up over 1.5%, likely thanks to oil prices dropping.