Texas, the fastest-growing US data center market, may lose its status as ground zero for Big Tech AI buildouts following the 2024 elections. Democrat James Talarico won the US Senate seat against Ken Paxton, and Gina Hinojosa won the governor's race against incumbent Greg Abbott. At the state level, Democrats seized control of the Texas House for the first time in 24 years.
Data center developers reported that the governor's office stopped responding to emails, and on September 21, Abbott directed a key regulator to halt permits. Governor-elect Hinojosa, who previously supported tax breaks, now pushes for a full moratorium. This shift threatens hyperscalers' ambitious AI training plans.
The scale of existing projects is massive: the Stargate Frontier center in Shackelford County is projected for 1,820 megawatts, while Nexus Hubbard, serving Anthropic, plans 6,400 megawatts. Banks are becoming pickier about backing projects, and combined with voter support for ratepayer protections and new bans, the AI buildout faces growing anxiety of stalling. Voters statewide backed efforts to protect ratepayers from electricity bill increases caused by data centers.
While some pro-data center counties like Dallas went blue, others like Ellis County went red, reflecting a complex political landscape where local, county, and state offices interplay to decide project viability.
Source: MIT Technology Review AI · Summarized by HeadlinesBriefing