Texas wanted to power America’s AI boom. Its new governor could change everything
Less than a year ago, Texas Gov. Greg Abbott stood beside Google CEO Sundar Pichai to celebrate the company’s $40 billion investment in the state’s cloud and AI infrastructure. Three new data center campuses would help make Texas, Abbott declared, the “ epicenter of AI development .” On Tuesday, Abbott lost his reelection bid to Gina Hinojosa, a Democrat who campaigned on halting new data center…
In a surprising turn of events, Texas voters elected Gina Hinojosa as the state's first Democratic governor since 1990, reversing the fortunes of incumbent Republican Greg Abbott. Hinojosa campaigned on a promise to halt new data center development until stronger safeguards were put in place, accusing corporations of taking advantage of Texans without proper oversight.
The governor's race has been hailed as the most consequential contest of the 2026 midterms, particularly for the utility and power markets. Hinojosa's victory could have significant implications for Texas's booming AI industry, which has attracted $2.9 trillion in investment and is home to the country's second-largest data center market.
The political upheaval in Texas could reshape the AI boom, as the state accounts for roughly 26% of planned American data center capacity, nearly three times the amount planned in Virginia. Hinojosa has proposed a moratorium on new data center projects until lawmakers pass stronger protections for residents, as well as the elimination of government subsidies that have made Texas so attractive to developers.
These changes could potentially delay or cancel 13.3 gigawatts of announced Texas data center projects, with far-reaching consequences for the state's economy, resources, and communities.
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