Immovable Objects

The one thing that can't leave.

Twenty-eight of the 41 data-center measures on today's ballot say no. Ohio has 21 of them; Sunbury's caps anything over 25 megawatts, polite language for Amazon's (NASDAQ: AMZN) $2 billion site. Gallup says 71% of Americans don't want one nearby. In at least a dozen governor's races somebody is promising a moratorium, including Florida's Republican nominee, who wants a ban. New York already has one. Kathy Hochul signed a one-year freeze in July and is spending millions on ads saying her opponent "supports new data centers that will raise your costs." A data center is what a landfill was in 1985.

Yesterday we said the state runs on the paycheck, AI is taking the paycheck, and when the state reaches for the capital line, capital runs. Six of California's 214 billionaires left around the January 1 cutoff. The state knows this. So read today's ballot as two levers. Lever one, tax the wealth where it still sits, retroactively, because you know it leaves: Prop 40 in California, Colorado voting a graduated income tax and a rate cap on the same day, Washington voting to repeal its millionaire tax. That's a rate case, not a revolution.

Lever two is the one that matters. Control the piece of AI capital that can't run. The founders are mobile. A model is a file. A data center is 460 megawatts of steel bolted to a substation with a 20-year lease behind it. It's real estate. Henry George worked this out in 1879: when the mobile stuff escapes, you tax the thing that can't move. A moratorium is a wealth tax on immobile capital. A 25-megawatt cap is a rate schedule. A permit is a lien.

And the industry is already short the building. Anthropic has promised $895 billion for compute, $70 billion of it due in the next twelve months, and lost money last quarter because it bought $5 billion of capacity at spot prices. Sundar Pichai says the compute Google (NASDAQ: GOOGL) has today "is a function of decisions I made in 2024." Nvidia (NASDAQ: NVDA) is in talks to guarantee the construction debt on Anthropic's West Virginia campus because the site flooded nearby homes. Long the demand, short the building, and the building needs a vote.

Which explains the tell. OpenAI's post-election plan, per Axios on Sunday, is to rename data centers "AI compute campuses," pay Pike County, Ohio $80 million, have its developer eat the grid upgrades, and ask statehouses for laws giving communities "a voice." Amazon and Microsoft (NASDAQ: MSFT) say no more NDAs with town councils. Chris Lehane calls it "democracy in action." It's Samuel Insull in 1898. Insull invented state utility regulation himself, because a regulated monopoly beats an unregulated vote. A rate case is negotiable. 71% isn't. You don't negotiate Prop 40, you move to Texas. You can't move the substation. So you hire the bureaucrat before the voters do.

The honest line: 46% of the same voters say the build is necessary, and most of the 10% rise in electricity bills since 2024 (20% in Ohio) isn't data centers. This isn't anti-AI. It's a fight over who pays the bill, and the ballot found the one defendant that can't skip town.

Capital can run. Compute can't. Today they vote on which one to tax.

At COAI today: the full Signal/Noise, with the Henry George and Insull history, the dozen governor races, and the Nscale guarantee math, is live at getcoai.com.

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28 of 41. That's how many local data-center measures on today's ballot restrict rather than permit, 21 of them in Ohio, where Sunbury would cap anything over 25 megawatts. The state spent a year learning that capital runs when you tax it (six California billionaires gone around the Prop 40 cutoff). So it's reaching for the one piece of AI that can't: 460 megawatts of steel bolted to a substation. A moratorium is a wealth tax on what can't move. Immovable objects.

For the investor — price the permit, not the power. The data center is the only immobile asset in the AI stack, and immobile assets get rate-regulated. New York's one-year freeze, Ohio's 25-megawatt caps, and Nvidia guaranteeing Nscale's construction debt all say the consent risk is real. Haircut every neocloud and data-center REIT for it today, and remember what regulated-return assets trade like. Utilities, not growth.

For the business owner — find out which of your costs are bolted down. If your AI budget assumes tokens keep getting cheaper, it assumes buildings keep getting permitted. Pichai just told you today's capacity came from 2024 decisions, and Anthropic paid spot to cover a shortfall. Lock multi-year capacity or run two vendors, and if your town is one of the 41, be in the room tonight. The cap they pass is your 2028 inference bill.

For the parent — take them to the polls and show them the 25-megawatt question. The civics lesson of this ballot isn't left versus right. It's that what can't move gets taxed and controlled, and what can move gets courted. Ask your kid which kind of value they're building: a skill that travels, or a position that depends on one town, one employer, one permit. Fifteen-year-olds get this faster than legislatures do.

Tuesday, November 3

— Harry and Anthony

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