Key points: Texas Governor-elect Gina Hinojosa said in a Reuters interview on Nov. 5 that work on data centers should stop until laws are in place to protect residents. “I don’t hate data centers. I hate the way companies are taking advantage of Texas,” she said. “When I’m governor, that ends.”
Hinojosa, a Democrat, defeated incumbent Republican Governor Greg Abbott in the Nov. 3 election. Texas had not elected a Democratic governor since 1990—36 years ago.
Texas has become the leading U.S. destination for AI data centers because it has abundant electricity, inexpensive land and few regulations.
The state that hosts more AI data centers than any other in the United States is facing a potential brake on growth.
In a Reuters interview on Nov. 5, Texas Governor-elect Gina Hinojosa said, “Work on data centers should stop until we have laws in place to protect Texans.” She added, “I don’t hate data centers. I hate the way companies are taking advantage of Texas,” and said, “When I’m governor, that ends.”
Hinojosa defeated incumbent Republican Governor Greg Abbott in the gubernatorial election held alongside the Nov. 3 midterm elections. She is the first Democrat to win the Texas governorship since 1990.
Throughout her campaign, she pledged to block all new data center permits until laws protecting residents were enacted. In an Oct. 22 video on X, she vowed, “When I’m governor, I will prohibit all data center approvals.”
Abundant electricity, growing concerns
The reasons Texas has become the top destination for data centers are simple: abundant electricity, inexpensive land and a business-friendly regulatory environment. Companies have flocked to the state, bringing concerns with them. Data centers consume enormous amounts of electricity and water, raising questions about whether the power grid can cope and whether local water supplies could run short.
“Most data centers have gone into rural areas, and there are no rules or laws to protect residents,” Hinojosa told CNN. She said local residents should have a seat at the table when decisions are made about whether to host data centers and how they should operate.
Abbott, a Republican, has already taken action. In August, he halted new data center connections to the power grid and later paused environmental permitting. The moves were intended to review how much companies receive in tax benefits, how much water they use, whether they provide their own electricity and water, and how they limit light and noise.
The power-grid review was scheduled to run through December. Abbott has also said data centers should pay for their own power infrastructure. He was among the first governors in the country to block data center connections to the grid.
A message to Musk
Tesla and SpaceX are headquartered in Texas, and Elon Musk plans to build a semiconductor factory in the state. Musk backed Abbott in the election. Hinojosa said she could “work closely with Musk’s companies, but on our terms,” adding that they “can’t do business by trampling on Texans.”
Although she has not yet taken office, Hinojosa has already made a move. After reports that the state planned to sell Boca Chica State Park to SpaceX, she asked the Parks and Wildlife Commission not to proceed with the sale. After the election results came in, Musk wrote on X, “Space-based data centers are looking attractive right now.”
The industry has been cautious in its response. Jess Hake of the Data Center Coalition said the industry is committed to responsible growth and looks forward to working with state leaders. Hinojosa will take office on Jan. 19 next year, and the Texas Legislature will convene that month. Democrats hold a majority in the state House. When new data center permits may resume will depend on what legislation the legislature passes.
Texas is not alone. The watchdog group Data Center Watch reviewed 74 gubernatorial candidates in 36 states this year and found that 43% supported pausing or banning data centers. The Trump administration is making data centers a national priority, but residents’ backlash over electricity bills and water is beginning to show up at the ballot box.