Hey, um, “The Capex Catch-22“, an article published here on Tuesday afternoon, was an election night preview.

Anybody pick up on that? At least one person did.

“A potential solution would be to blame all the newly elected [Democrats] and the moratoriums and bans on data centers to ‘miss’ on the capex targets,” one reader remarked, of the hyper-scaler Sophie’s choice.

To (very briefly) recapitulate, that choice is as follows: Cut capex to placate investors nervous about free cash flow burn at the considerable risk of suggesting the ROI on AI outlays isn’t panning out as anticipated, or maintain capex plans and watch investors punish the stock on balance sheet concerns and the associated bad buyback optic.

In the context of that impossible choice, the blue tsunami could be viewed as a kind of deus ex machina. As The Information noted on Wednesday, “candidates backing data center pauses won or lead in 12 governor’s races, from New York to Texas, narrowing the map for AI builders.”

Every hyper-scaler save Oracle was higher in the US, with gains ranging from better than 7% for Amazon to a more modest advance for Meta.

As the figure shows, Amazon and Microsoft were on track for their second-best sessions of the entire year.

This isn’t just about plausible deniability (i.e., scapegoating Democrats) for a more restrained approach to capex. It’s also about supply and demand, just like everything else in the world.

If fewer data centers come online, preexisting AI infrastructure is that much more valuable assuming static or increasing demand. Guess who has preexisting AI infrastructure?

Investors believe the election results “will lead to a forced moderation of the US data center buildout, which then calms concerns around the hyper-scaler capex prisoner’s dilemma,” Nomura’s Charlie McElligott said Wednesday. “From a markets perspective, this reduces some of the financing concerns around the magnitude of credit and equity issuance [and] slows the FCF burn trajectory.”

That’s all-around bullish. Remember: IG tech spreads are now wide to the broader high-grade market. Because big-tech issuance is so chunky, it has the potential to move the entire blue-chip universe wider as hyper-scaler debt becomes a larger share of the total. Some moderation of that dynamic would be nice.

On the equity issuance side, anything with the potential to forestall additional mega raises like those seen from Meta and Alphabet is likewise a reprieve at a time when the big-spending tech heavyweights are collectively becoming net issuers of stock.

In the same note mentioned above, McElligott flagged a new initiative from the hyper-scalers, who’ve reportedly partnered with a consortium of environmental groups on a “responsible” data center development framework.

“The apparent strange bedfellows arrangement [came] as Democrats… appear[ed] poised to take power in one or both chambers of Congress,” TheHill, which broke the news in a (terribly-written) Tuesday evening piece, remarked. Big-tech, Charlie said, “had seen the writing on the wall.”

Another potential beneficiary of the blue wave: Scott Bessent, who on Wednesday kept coupon auction sizes unchanged in the QRA. If the hyper-scalers can get some air cover to rein in capex, they might not have to borrow as much, which would, as McElligott noted, “reduce crowding-out risk to US Treasurys.”

Of course, any dial-back on data center construction will need to be carefully managed, lest the load-bearing pillar of the US economic expansion should crack, leaving cash-strapped, inflation-weary consumers to shoulder the burden of sustaining Trump’s “new American golden age.”