AI Summary
5 min readThe election delivered a split government, and the immediate market reaction surprised many who had braced for a selloff. But the panel on this episode of This Week in Startups argued the real story is deeper: a divided Washington may actually be good for markets precisely because it prevents dramatic policy swings, even as it creates real headwinds for the technology industry on issues from data centers to M&A to the public’s growing unease with AI.
The data center backlash and the power bottleneck
The most striking political development of the election, according to the panel, was the sudden salience of data centers as a voting issue. An NBC exit poll found 56% of voters called AI and data centers a “crucial or major factor” in their vote, and Democrats spent over $100 million on ads tying Republicans to big tech. This represents a sharp reversal from just a few years ago, when data centers were seen as tax boons for local communities. DA Wallach of Time BioVentures argued the narrative is inherently difficult for tech to counter: “What politician wants to get up there and say, we've got this great technology we need to support that's coming for your job?” The pro-tech argument requires a complicated historical case about how every previous technology wave created more jobs than it destroyed — a story that requires reading “five or six books” to fully absorb.
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What you'll learn
- 1 (00:32) **Introducing the Panel** - DA Wallach (Time BioVentures) and Ilana Gold (Two Roads Capital) join Jason, with Tomasz Tunguz (Theory Ventures) returning
- 2 (02:37) **Election Results and Divided Government** - The panel reacts to Democrats winning control of both chambers, creating a split government
- 3 (03:49) **The Data Center Political Backlash** - Panel analyzes why data centers became a major campaign issue and what it means for AI infrastructure
- 4 (09:16) **M&A Outlook Under Split Government** - The panel discusses the threat of renewed antitrust enforcement and the window for big tech acquisitions
- 5 (12:18) **The Anti-Self-Driving Political Wave** - Jason predicts a coming backlash against autonomous vehicles that could slow adoption
- 6 (19:07) **The Missing Positive AI Narrative** - Jason argues no one is telling a compelling story about how AI helps ordinary Americans
- 7 (25:14) **AI's Physical World Limitations** - DA argues AI solves business problems but not the material problems of average people's lives
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
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Today’s show:
Democrats took the House and Senate, and overnight trading suggested a huge market drop. But in the morning, the markets went another way, and D.A. Wallach thinks he knows why. A Congress that can’t get anything done can’t do anything BAD, like start a war or a tariff fight. The only thing markets hate than gridlock is uncertainty.
On the first post-midterm This Week in VC roundtable, Jason is joined by Wallach (Time BioVentures), Elana Gold (Two Roads Capital), and Tomasz Tunguz (Theory Ventures).
Together, they work out what a split government could mean for tech and venture. Data centers are now a political target for both parties. 2027 might be the last major window for big M&A. Plus, D.A. worries that an intergenerational war could be brewing, between the people who own AI’s upside, and the young workers who fear getting replaced.
Plus thoughts on Cava’s 22% layoffs, Sequoia shutting down its Scouts and Arc program, the SPV “boiler room,” and more.
Guests
D.A. Wallach on X: https://x.com/dawallach
Time BioVentures: https://www.timebioventures.com/
Elana Gold on X: https://x.com/ItsElanaGold
Two Roads Capital: https://tworoads.vc/
Tomasz Tunguz on X: https://x.com/ttunguz
Theory Ventures: https://theoryvc.com/
Relevant Links:
NBC exit poll: 56% say AI and data centers were a crucial or major factor (DCD): https://www.datacenterdynamics.com/en/news/nbc-exit-poll-56-say-ai-data-centers-were-a-crucial-or-major-factor-in-congressional-vote-decision/
How AI backlash shaped the 2026 midterms (TIME): https://time.com/article/2026/11/04/midterm-elections-results-ai-industry-data-centers/
Musk on chips outrunning electricity in 2026, with Elon's reply: https://x.com/elonmusk/status/2117649850644705591
Panthalassa raises $140M f