Predicting the future is a fool’s errand. Doing so based on the promises of a politician is even more fraught.

Even if one were to trust that a nation’s leader plans to stick to their manifesto, black swan events - from wars and pandemics to natural disasters - can dramatically alter the priorities of an administration.

But, with that in mind, let’s try to unravel what we can expect to happen to the data center sector after the landslide election of Donald Trump.

The climate, sustainability, and the grid

The chance that the world would manage to keep within the 1.5°C range was already pretty slim. With the re-election of a climate change denier, such dreams are dead. Instead, the question simply is - how bad will it get?

The last time Trump was in power, he pulled the US out of the Paris Climate Accord, but the terms of the treaty meant that the nation only actually left the carbon reduction plan in the final months of his term. This time, he could leave within a year.

Trump has also railed against the Inflation Reduction Act, the largest piece of legislation to address climate change. That included $128 billion for renewable energy and grid energy storage, $30bn for nuclear power, and $37bn for advanced manufacturing (including zero-emissions industrial tech). It also included the largest hydrogen subsidies in the world.

Such schemes are expected to face cuts, along with any broader subsidies for renewable energy. However, it is not yet known whether Republicans will secure the House - and many Republican states have benefited from IRA investments, so may not vote to completely repeal the energy and manufacturing tax credits.

The upcoming President has also repeatedly falsely claimed that wind turbines kill whales and cause cancer. He has incorrectly called it the most expensive form of energy, and claimed that “the wind is bullshit.” Shares in large wind turbine manufacturers, including Orsted, fell dramatically on his election win.

Several large wind projects are planned along the US East Coast which will, in part, help power data centers. Unlike solar and onshore wind, offshore wind requires federal approvals, with Biden pledging to reach 30GW of offshore wind by 2030. Nearly 20GW of that is still awaiting permits, which are now all at risk, with Trump threatening to stop offshore wind projects on "day one."

Instead, Trump has called for a drilling boom in the US, which could bring down costs of oil and gas - the latter of which is increasingly being used by the data center sector. However, deregulating liquefied natural gas exports could actually send prices higher as local markets have to compete with overseas ones.

Expect significant offshore lease sales, pipeline approvals, fracking on federal lands, and a coal return.

The President-elect has also said that he is pro-nuclear. In a lengthy Pennsylvania rally in August, Trump called nuclear “a great energy.”

He added: “To power our country into the future, including the electricity demands of AI and cryptocurrencies - which is a very big subject, it's coming up more and more, and we have to stay at the top, we have to be at the forefront, otherwise China and other countries will take it over. That's both of them: AI and crypto.

“We will make a historic commitment to bringing advanced small modular nuclear reactors online. Building these massive plants that cost $20 billion and don't even get built…” He then incorrectly said that France was currently deploying multiple small modular reactors (SMRs).

Trump backer Peter Thiel has invested in several SMR companies. The technology remains unproven, but has been embraced by the data center sector as a way to keep expanding.

More broadly, Trump promised to rapidly approve electrical infrastructure projects as soon as he is in power. He is expected to weaken or remove regulations on environmental reviews and other sustainability regulations that slow down infrastructure projects.

The data center sector, which faces a grid crunch, could benefit from new energy projects - although it is worth noting that Trump made similar promises in his last term. However, the sector could risk forfeiting its net zero aspirations and rely on an increasingly dirty grid.

Despite political machinations, renewable energy has reached a stage where it is often economically beneficial. Expect hyperscalers and other data center operators to continue to use renewable energy PPAs both for internal sustainable goals, and for the economics.

The sector should also plan on longer time scales than Trump’s single term: Future presidents may bring back environmental and climate rules, so decades-long projects should err on the side of caution. Also, expect ambient temperatures and flood plains to rise.

Construction and migration

A key promise of the Trump campaign was to round up and mass deport undocumented migrants, as well as others. He has pledged to use the National Guard, and "go a step further" if necessary.

The construction sector employs an estimated 1.5 million undocumented workers, or 13 percent of its total workforce, according to Pew Research Center.

Should such a large number of workers be removed from a sector already facing a labor crisis, it is expected to have a profound impact on construction times and cost. The legality of such an operation would be tested, however, and would likely face lengthy court battles.

Stricter policies on new immigration will be easier to pass, and will also have an impact on the available labor force, but would not be as dramatic as mass deportation.

At the same time, an expected culling of regulations, worker protections, and environmental reviews will likely speed up the time it takes to start construction projects.

Tariffs, chips, and China

Perhaps the biggest risk the Trump presidency holds to the global economy is that of tariffs.

He has threatened ten percent tariffs on all goods imports, and up to 60 percent and 100 percent for China and Mexico, respectively. Those tariffs are paid by the importer, not exporters.

This cost would be passed on to the consumer, and increase inflation. It would also likely lead to retaliatory tariffs from other nations.

This could have a huge impact on a number of data center components, among them semiconductors. After decades of US semiconductor manufacturing decline, the Biden Administration passed the CHIPS Act to pump billions into local fabs. It has been slow to actually disperse the funds, however.

Trump called the act "bad," and suggested swapping it for tariffs, although Republicans in beneficiary states would likely fight to keep some CHIPS funds. TSMC and GlobalFoundries have reportedly finished their negotiations for their subsidies, as the Biden Administration rushes to push out money before January.

Given the time it takes to build chip fabs, and the global nature of the various components, tariffs would not lead to an immediate dramatic increase in US manufacturing - but would increase chip costs.

At the same time, the incoming president has threatened to weaken US protection of Taiwan, home to the world’s most advanced semiconductor manufacturing. Should it fall to China, it would fundamentally and dramatically change the global server market.

Both Trump’s first and Biden’s current administrations restricted the sales of high-end chips to China, and tensions continue to rise. The new administration is expected to further inflame the trade war, and push a decoupling of the world’s two largest economies.

Rare earth metals and other critical components could be at risk from the simmering conflict, while companies including Nvidia, Broadcom, and Qualcomm are all at risk from their exposure to Chinese markets.

Crypto and AI

The keynote speaker at the Bitcoin Conference in Nashville, Tennessee, Trump said he would "ensure that the US will be the crypto capital of the planet." Crypto prices have jumped on the news of his victory, and could help resuscitate a sector that was struggling to profit as the costs of mining continue to rise.

Over the past two years, crypto companies have increasingly pivoted to AI workloads to diversify their portfolio and chase the latest boom. That will continue, but should crypto’s resurgence remain steady, expect them to continue to build out crypto facilities - meaning another competitor for grid connectivity that traditional data centers will have to face.

As for AI, Trump has indicated that he will be more hands-off, so expect less regulation over large language models and AI cluster sizes. Trump’s campaign manifesto includes a pledge to repeal Biden’s 2023 executive order on AI.

However, individual companies that have caught his ire - including Google and Meta - may face headwinds from specific investigations. An unknown is TikTok - Trump tried to ban it or force a sale to US companies in the waning days of his presidency, Biden has now ordered it sold, but Trump has since voiced pro-TikTok beliefs.

Tax cuts and mergers

More broadly, a more hands-off approach to governance is expected to gut antitrust regulations, and lead the way for more mergers and acquisitions. However, many of the largest companies are global businesses, so M&A would still face regulatory scrutiny overseas.

Further corporate tax cuts and the extension of his 2017 tax cuts will boost corporate bottom lines, much of which will likely go to stock buybacks and M&A.

The government, Elon Musk, and space

Trump has promised to cut government spending significantly. But how serious he is, and how deep those cuts will be, is unknown. Financial backer Elon Musk has said he would help cut some $2 trillion in spending (the US government spent $6.7 trillion in its last full year), but it’s unclear how, and whether he would be given authority to do so.

Numerous government agencies are at risk of budget cuts or being completely closed down. That would also include their own data center infrastructure.

Specific Biden-era data center efforts, including the White House Task Force on AI Datacenter Infrastructure, could be at risk. The DOE is currently considering building an AI data center testbed, setting data center standards, and enacting grid upgrade tariffs - all are now in flux.

Musk, meanwhile, could benefit from his newfound access to the White House and may push his own businesses. Generative AI startup xAI could benefit from bills in favor of powering ever larger data center clusters.

SpaceX, meanwhile, could be a major winner from the election. Both Musk and Project 2025 - a political initiative published by the American conservative think tank the Heritage Foundation - have called for satellite Internet service Starlink to be the greatest beneficiary from the $42bn Broadband Equity, Access, and Deployment (BEAD) Program, which it is currently not a part of.

“We’re spending a trillion dollars to get cables all over the country, up to upstate areas where you have two farms, and they are spending millions of dollars to have a cable . Elon can do it for nothing."

BEAD has yet to fund any projects and has faced significant criticism from Republicans. Network operators including AT&T, Brightspeed, and Windstream were expected to benefit from it, as were fiber vendors like Corning.

Now that could instead go to Starlink, and potentially Amazon's Project Kuiper. FCC Commissioner Brendan Carr is predicted to be Trump's nominee to head the agency, and has also said that Starlink should be in the program, and floated giving a third of BEAD's budget to satellite Internet.

The wider picture

There remains a significant number of unknowns with Trump’s second presidency, but one thing is certain: He will dominate headlines and attention for much of his term. His actions will have a profound impact on the economy, health, education, defense, and much more.

However, it is also important to note that the US presidency has its limitations. Other factors will impact the economy and the data center sector.

The industry remains in a boom time, Trump’s presidency will not immediately threaten it. The sector is continuing along a path of denser racks and bigger data centers to serve growing AI workloads. Whether that AI business can become sustainable before investment runs out remains a much greater question for the sector than who will sit in the White House come January.