Even before the polls closed, insiders in the data center industry noticed that the times were changing. At the industry’s DCD conference in Ashburn, Virginia, on Tuesday, panelists lamented that Texas had been the easiest place to build for years—until September. That’s when Abbott, perhaps seeing the increasingly bipartisan distaste for these facilities, began changing course himself.
Developers said the governor’s office had stopped responding to their emails. On September 21, Abbott directed a key state regulator to halt data center permits. Many panelists at the conference were expecting this to mean that existing projects might be slowed and new ones could be halted altogether.
The governor-elect indeed seems eager to do that. Hinojosa supported tax breaks for data centers in 2023 as a way to boost construction jobs, but during her campaign she began pushing for a full-fledged moratorium.
That would be a problem for the hyperscalers of Big Tech, which have ambitious plans for AI training facilities in the state. The scale of projects already underway in Texas is massive. The Stargate Frontier data center in Shackelford County is projected to serve 1,820 megawatts—about as much as the nation’s largest data center, SpaceX’s Colossus 2 in Tennessee, and more than twice as much as the largest data center currently operating in Texas. Nexus Hubbard, also under construction and intended mostly to serve Anthropic, has a planned size of 6,400 megawatts and is the second-largest data center being built in the US, behind only Meta’s Hyperion project in Louisiana.
The potential for Democrats to order delays to these projects or moratoriums on new ones adds to growing anxiety that the AI buildout could stall. Banks and lenders are already getting pickier about the projects they back. And given the extent to which the data center buildout is underpinning growth in the economy right now, those forces combined could have ripple effects.
Voters around the country, though, were unambiguous in the midterms, sending a similar message on everything from state ballot questions to national offices. Voters supported efforts to protect ratepayers from increases in their electricity bills caused by data centers, and they favored some larger bans on new data centers altogether. If we needed any more convincing that Big Tech has fumbled its effort to sell voters on the idea that AI-powered abundance will make health care better, goods cheaper, and scientific breakthroughs more common, this was it.
