Texas data centers face an uncertain future after Democrat Gina Hinojosa’s victory over Republican Governor Greg Abbott. During her campaign, Hinojosa called for a statewide moratorium and said she would block approvals until lawmakers passed measures giving Texans a say in whether and how facilities are built in their communities.

Texas has attracted major data center projects in recent years, supported by plentiful energy, relatively inexpensive land and a business-friendly policy environment. Meta, Google and Microsoft have all announced significant projects in the state over the past two years.

The industry was already under pressure before the election. In early August, Abbott ordered a pause on connecting new data centers to the state’s electricity grid and commissioned an audit of projects examining energy demand, environmental effects and tax incentives. The move marked a shift from his earlier support for the sector.

At the time, grid operator ERCOT said it was tracking connection requests for data center projects totaling more than 400 gigawatts—an amount of power comparable to the needs of the entire southern United States. Abbott’s actions put tens of billions of dollars in planned projects at risk and raised questions about whether developers would recover hundreds of millions of dollars in deposits paid to seek grid connections.

Abbott also directed the state to address past violations involving data center water use and temporarily halted environmental permits for the projects. However, he did not impose a formal moratorium. Some of his measures were temporary, and the audit was due to be completed by the end of 2026.

Local opposition and concerns about pressure on the electricity grid have added to the sector’s challenges. A Reuters/Ipsos poll published this week found that about 42% of registered voters considered limiting data center construction a very important or their most important issue. A separate NBC and SSRS exit poll found that about 76% of voters nationwide opposed building a new data center in their community. In an October University of Houston survey, 79% of likely Texas voters supported limits on the number of data centers that can be built in the state.

Sources: Folha Mercado.