Texas Governor-elect Gina Hinojosa on Thursday announced plans to halt new data center development in the state, citing impacts on rural communities. She said she will introduce legislation to protect residents and give communities a say, accusing developers of raising utility rates and depleting water.
Projects that have secured power, permits, and steel will continue, Johnson said, while those with power but lacking state environmental permits could face delays of 12 to 18 months. Projects with neither power nor permits “probably go to Louisiana, Oklahoma or nowhere,” he said.
Hinojosa’s announcement places roughly 13 gigawatts of data center capacity in Texas—enough to power about 10 million homes—in immediate jeopardy, according to Gordon Johnson of GLJ Research.
Texas accounts for nearly 30% of U.S. data center capacity scheduled to come online in 2028, the largest share of any state, according to research firm SemiAnalysis. The firm said Hinojosa presents a “more bearish approach” than her predecessor, as she would impose a moratorium until legislation is passed that gives communities a voice, protects household utility bills, and ends tax incentives for data centers.
Tech shares sold off in the weeks leading up to the election, but major companies including Meta, Amazon, and Alphabet traded higher Wednesday when New York exchanges opened, according to market reports. CoreWeave, down 25% this year, traded more than 5% lower, while Tesla and SpaceX, controlled by Elon Musk, fell around 5%. Nvidia also declined slightly. An analyst at Eugene Investment & Securities said new regulations in Texas would hurt AI infrastructure first, adding that the dynamic “is getting played out in the stock market.” The election results threatened to overshadow bullish earnings from AMD and Super Micro Computer, the analyst said.
Hinojosa, a Democrat, defeated Republican incumbent Greg Abbott in Tuesday’s election, becoming the first Democratic governor of Texas in more than three decades. Her victory was part of a broader Democratic sweep that also won gubernatorial races in Georgia, Ohio, and Pennsylvania and secured party control of the U.S. House and Senate, according to the Insurance Journal. The results were driven by voter frustration with the cost of living and the war in Iran, and Democrats are poised to place closer scrutiny on Silicon Valley interests.
Hinojosa told CNN: “We will have laws to protect Texans, and we need to stop what we are doing with data centers until we have those protections.” She said communities should have “a seat at the table” on if and how data centers operate in their areas. During her campaign, she repeatedly called for an immediate moratorium on data center development and vowed to halt approvals until “a legislative session that puts Texans first so that we don’t have any more communities in Texas who are powerless against these global corporations,” according to the Insurance Journal. She has accused developers of “raising our utility rates and depleting our water” and described Abbott’s vows to rein in data center operators as “nothing more than an election year stunt.”
Hinojosa also said she spoke to the executive director of the Texas Parks and Wildlife Commission “to request that no action be taken” on a reported sale of Boca Chica State Park to SpaceX during the transition from Abbott to her administration, according to Yahoo. In October, Texas Monthly reported that the state had been discussing the sale of the park to SpaceX. The company did not immediately respond to a request for comment.
Abbott had already become one of the first Republican governors in the U.S. to halt the connection of new data centers to the state’s electric grid and ordered a comprehensive audit of the projects. Data center developers in Texas were already dealing with a suspension of approvals under Abbott before Hinojosa’s win, according to the Insurance Journal.
Other newly elected governors have taken similar stances. In Ohio, Democrat Amy Acton defeated billionaire entrepreneur Vivek Ramaswamy; she has called for an immediate conditional moratorium requiring data center developers to meet construction requirements and pledged to “fight against the unchecked development of data centers.” In Georgia, Democrat Keisha Lance Bottoms became the first Black woman elected governor and called for a moratorium on new data center construction during the campaign. In Pennsylvania, Democratic incumbent Josh Shapiro won and is largely expected to maintain the status quo, though he has shifted to railing against speculative projects and those opposed by locals.
Jefferies assigned “tiers” to U.S. states for political risk to data center projects. Ahead of the Texas election, analysts said a “Hinojosa win would result in an immediate statewide pause and move Texas from Tier 3 to Tier 4.”
Musk supported Abbott in the election and spent $158 million to promote Texas Republican U.S. Senate candidate Ken Paxton, Musk said Wednesday. His SpaceX and Tesla are headquartered in Texas, where he is also planning a chipmaking venture. Hinojosa said Texas can have a strong working relationship with Musk and his companies, but on her administration’s terms, according to Yahoo. Hinojosa takes office in January, and her proposed legislation would be introduced during the next legislative session.
