Texas was the new epicenter of the AI data center buildout. That might be kaput.
2026-11-08 · MIT Technology Review
Texas AI data center buildout faces political shift
Election changes the policy climate
Texas is the fastest-growing data center market in the US and ground zero for Big Tech’s largest AI buildouts. But the Democratic wave that swept the state may jeopardize that position. Democrat James Talarico won a US Senate seat against Ken Paxton. Gina Hinojosa won the governor’s race against Republican incumbent Greg Abbott. At the state level, Democrats will take control of the Texas House for the first time in 24 years. Talarico and Hinojosa made data centers a central issue and discussed them constantly on the campaign trail.
Permit pause and moratorium push
Even before polls closed, data center industry insiders noticed the times were changing. At the industry’s DCD conference in Ashburn, Virginia, panelists lamented that Texas had been the easiest place to build for years—until September. That was when Abbott, perhaps seeing growing bipartisan distaste for these facilities, began changing course. 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 expected existing projects might be slowed and new ones could be halted altogether. Governor-elect Hinojosa seems eager to do that. She supported tax breaks for data centers in 2023 as a way to boost construction jobs, but during her campaign she pushed for a full-fledged moratorium.
Large projects already underway
That would be a problem for Big Tech hyperscalers, which have ambitious plans for AI training facilities in the state. The scale of projects already underway 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.
Economic anxiety and voter signals
The potential for Democrats to order delays or moratoriums adds to growing anxiety that the AI buildout could stall. Banks and lenders are already getting pickier about the projects they back. Given how much the data center buildout is underpinning growth in the economy right now, those forces combined could have ripple effects. Voters around the country were unambiguous in the midterms. They supported efforts to protect ratepayers from electricity bill increases caused by data centers, and they favored some larger bans on new data centers altogether. If more convincing was needed that Big Tech has fumbled its effort to sell voters on AI-powered abundance, this was it.
Local authority complicates follow-through
A key question is whether the Texas counties with the largest data center presence helped elect these Democrats, or whether the anti-data-center vote came from elsewhere. It is complicated. Dallas County and others closest to it predictably went blue, but nearby Ellis County, which leads in permitting requests for data centers, went for Abbott and Paxton. Cameron County, near the southern border, is a data center hot spot and voted blue in the midterms, a shift. But Mitchell County and Scurry County, where a bunch of west Texas projects are located, went red.
This matters because no single office in the state decides whether a project goes ahead or is halted. Decisions often reflect an interplay between city governments, county officials, and state offices. Local officials with some say over data center development may resist sweeping restrictions from the state. Democrats pushing for a moratorium might also face pushback from construction unions that supported some of their campaigns. So while the blue wave spells a death knell for Texas data centers in theory, election winners may find that following through on their opposition once in office is much more complicated than campaigning on it.