How AI will be regulated is a central election issue for TMT companies.
Key takeaways
Potential regulatory changes could increase compliance costs.
Businesses should proactively review AI strategies to improve intentionality and efficiency.
With the 2026 U.S. midterm elections approaching, RSM is looking at the economic stakes and the key issues for various industries. This article is one part of that series.
The outcome of the 2026 U.S. midterm elections will help shape the policy landscape facing U.S. businesses through the remainder of the decade. Changes in congressional control, oversight priorities and state-level policymaking could influence everything from taxes and funding programs to regulation, workforce issues and investment decisions.
Here’s a look at the implications for the technology, media and telecommunications (TMT) industry.
The top issue for the technology industry
The biggest issue for technology companies is the development and potential regulation of leading artificial intelligence labs.
These frontier AI companies have recently pushed for a more measured pace of development, while the current administration wants to scale up the technology as quickly as possible amid intense global competition.
Currently, there is no federal legislation restricting AI—but several states have passed legislation for guardrails on the technology in their respective jurisdictions. In response, an executive order was issued in December 2025 that directed the Department of Justice to challenge these state AI laws.
Frontier AI labs are looking for one comprehensive set of federal guidelines on AI safety and governance after individuals at these companies recently pointed to urgent risks related to the technology. This could affect how businesses implement their AI governance plans and influence AI investments going forward.
Implications for future legislation
Control of Congress will shape whether a single federal AI standard emerges.
Under unified Republican control, efforts to prevent state AI laws would likely continue—in line with previous efforts from the White House.
But under Democratic control, any legislation would likely stall under a presidential veto; Congress could then use appropriations and Senate confirmation of Federal Trade Commission and Federal Communications Commission nominees to advance certain issues.
At a local level, the speed, scope and capital being utilized in the buildout of AI-related infrastructure is unprecedented. The Brookings Institute projected that investments of over $10.3 trillion will be spent from 2025 to 2032 related to the construction of data centers.
However, pushback from local constituents over the amount of energy and water required for this buildout—not to mention larger philosophical concerns—has brought the issue of data centers to the forefront of state and local elections.
Other top issues for the media, entertainment and telecommunications industry
The changing media landscape should be a notable concern for businesses in the industry.
This is evident in the number of sizeable consolidations of media companies—and there are also concerns that both news and content will soon be concentrated within individual companies.
There is also added regulatory pressure from the FCC on content deemed to be overtly political, as well as reduced funding in public broadcasting. The outcome of congressional elections could further influence how the media landscape frames content going forward.
By the numbers
The forecast for investment in AI infrastructure for 2026, particularly the hyperscale buildout, is estimated to be around $600 billion—which would be around 2% of the country’s total gross domestic product.
Any potential reduction in the pace of development due to increases in regulation could slow down the growth of the U.S. economy.
What middle market businesses should consider now
As businesses budget how much they intend to spend and invest in AI, the increase in security and compute costs will need to be a factor in any plans to implement this technology.
Businesses should consider the costs and benefits of AI adoption to make sure it is driving value for the enterprise—otherwise, they may need to reevaluate their implementation strategies to be more intentional about their investment.
Potential changes to AI safety and governance regulations could increase the associated compliance costs, so businesses should proactively implement strict AI guidelines and policies to protect and secure their data.
Many middle market companies are in the process of designing, implementing and utilizing AI models in their operations—and if they aren’t, exploring thoughtful ways to integrate this technology should be a strategic imperative as competitors are looking to increase productivity and lower costs.
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