Texas’s Political Shift Puts Its AI Data Center Boom at Risk

Texas has become the fastest-growing data center market in the United States and a major location for Big Tech’s AI infrastructure. The state’s political shift could now complicate that expansion. Democrat James Talarico defeated Ken Paxton in the US Senate race, Gina Hinojosa defeated Republican incumbent Greg Abbott in the governor’s contest, and Democrats are set to take control of the Texas House for the first time in 24 years.

Data centers were a prominent campaign issue. Hinojosa, who supported tax breaks for the facilities in 2023, later called for a full moratorium. Abbott’s office stopped responding to developers in September, and on September 21 he ordered a key state regulator to pause data center permits. Industry panelists said the move could delay existing projects or block new ones.

The projects at stake are substantial. Stargate Frontier in Shackelford County is planned at 1,820 megawatts, while Nexus Hubbard, intended largely for Anthropic, is planned at 6,400 megawatts. However, decisions involve state, county, and city authorities. Local resistance, construction-union concerns, tighter lending, and mixed voting patterns could make broad restrictions difficult to implement.