Houston, Do We Have A Problem?

Authored by Frank Flight, Citadel Securities head of macro strategy,

The midterm election results have important implications for the US macro outlook, with a more challenging environment for the AI investment cycle, a potentially accelerated resolution to the Iran conflict and a political realignment towards the centre ahead of 2028. The electoral backlash against data-centre development introduces new constraints on the pace of AI infrastructure deployment, although the geographical mobility of capital should limit the ultimate impact on aggregate investment. The more immediate consequences are likely to be slower construction, greater execution risk and a redistribution of returns along the AI supply chain, favouring businesses with operational and energized compute over hardware suppliers exposed to deployment delays.