Tech & AI
Citi data shows local bans on U.S. data centers spreading fast
Citi Research data shared by The Information shows local bans and pauses on U.S. data centers multiplying. That is a risk for the chipmakers and AI firms whose stocks fell hard on Thursday.
Quick Read
- Local bans and pauses on U.S. data centers have multiplied since late last year, Citi Research data shared by The Information shows.
- Chip and AI stocks, including CoreWeave, Micron and AMD, led a broad stock market drop on Thursday.
- Tech-focused funds carry more exposure to spreading data center limits than broad index funds do.
What does the Citi data show?
Local limits on new U.S. data centers have multiplied. Citi Research figures, published by The Information, count more than 500 bans and pauses by October. That compares with roughly 20 last December.
Why it matters: Such limits were rare before the middle of last year. A ban blocks new projects outright. A pause, often called a moratorium, halts approvals for a time while officials decide what to allow.
How did chip and AI stocks react?
Data center and AI stocks fell hard on Thursday, Nov. 5, after Tuesday's midterm elections. CoreWeave (Nasdaq: CRWV) tumbled 9.8%. Micron, a memory chipmaker, dropped 17.5% and lost $160 billion in market value.
AMD tumbled 17.3%, and Meta, a heavy spender on data centers, fell 4.0%. The technology sector fund (XLK) dropped 8.0%.
The selling spread across the market. The Nasdaq-100, an index made up mostly of tech companies, tumbled 6.4%. The S&P 500 fell 4.4%.
Some of the chip losses reversed in late trading. AMD gained 3.6% after the close, and Micron (Nasdaq: MU) gained 3.8%.
Why do local rules matter to chipmakers?
Chipmakers such as Nvidia, Broadcom, AMD and Micron sell into the AI build-out. Each new ban or pause removes a possible home for servers packed with their chips. If limits keep spreading, orders could arrive more slowly.
The open question is whether local rules cancel spending or simply push projects to towns that still welcome them. Spending updates from the big AI companies may show which.
No date for the next local vote appears in the Citi count. The next broad test for markets is the October jobs report, due Friday, Nov. 6, at 8:30 a.m. ET.
For readers
What it could mean for you: If you own a technology or semiconductor fund, this story bears more directly on your money than on a broad fund. Chipmakers such as Nvidia, Broadcom, AMD and Micron are large holdings in many tech funds, and their sales lean on new data centers getting built. If more towns and counties adopt bans or pauses, those funds could swing harder on each new tally. A broad index fund spreads its money across many industries, so it carries less of this particular risk.
Questions and answers
How fast are U.S. data center bans spreading?
Citi Research data shared by The Information shows the count of local bans and pauses rose steeply between last December and October. Such limits were rare before the middle of last year.
Why did AMD and Micron stock fall?
Both fell on Thursday, when AI and data center stocks sold off after Tuesday's midterm elections. Spreading local limits on data centers could slow the build-out that drives demand for their chips.
Do data center bans affect an S&P 500 index fund?
A broad index fund holds companies across many industries, so chipmakers make up only part of it. On $100,000 in an S&P 500 fund, Thursday's drop cost $4,360.
The numbers
| Advanced Micro Devices (AMD) price | $404.40 |
|---|---|
| Advanced Micro Devices (AMD) change | −17.26% |
| Advanced Micro Devices (AMD) market value | $660 billion |
| Advanced Micro Devices (AMD) 52-week high | $649.42 |
| Micron Technology (MU) price | $656.39 |
| Micron Technology (MU) change | −17.46% |
| Micron Technology (MU) market value | $740 billion |
| Micron Technology (MU) 52-week high | $1,213.56 |
| CoreWeave (CRWV) price | $43.66 |
| CoreWeave (CRWV) change | −9.83% |
| CoreWeave (CRWV) market value | $24 billion |
| CoreWeave (CRWV) 52-week high | $137.98 |
| S&P 500 change | −4.36% |
| 10-year Treasury yield | 4.84% |
Thursday’s close
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Not investment advice.
