Texas data centres face uncertain future after Hinojosa wins governor's race

Texas governor-elect Gina Hinojosa has cast doubt on the future of the state's data center industry with a promise to halt new projects, according to reports from Houston and New York. Texas, with its abundant energy, cheap land, and business-friendly environment, has become a leading destination for data center developments, with major tech companies like Meta, Google, and Microsoft announcing projects in the state over the past two years.

However, the industry has faced scrutiny before the midterms, with former Governor Greg Abbott halting the connection of new data centers to the state's electric grid and ordering an audit of projects due to concerns over power demand, environmental impacts, and tax breaks. Hinojosa has vowed to go further by banning all data center approvals until the state legislature passes laws to provide Texans a say in their development.

The Data Center Coalition, representing Big Tech and other developers, stated they would continue pursuing their infrastructure build-out in the state while working with local governments. Roughly 42% of registered voters in a recent poll said limiting data center construction was very important, citing concerns about AI, electricity bills, water supplies, and property rights.

Many data center developers are now considering investing in red and purple states instead of Texas, with some even looking abroad to Canada, Mexico, and Europe.