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Texas Governor-elect Gina Hinojosa announced plans to pause new data center developments in the state until stronger protections for residents are established. During a news conference in Austin on Thursday (November 5), Hinojosa emphasized the need for community input on future projects, citing concerns over rising utility costs and resource use as data centers expand into rural areas.
Hinojosa's decision follows her campaign promise to extend the current freeze on data center approvals, a policy initially implemented by Governor Greg Abbott. Abbott had paused environmental permitting and grid connections for data centers during an audit period, as reported by The Texas Tribune. Hinojosa's moratorium aims to last until the Texas Legislature meets in January to pass laws ensuring Texans have a say in data center developments.
The governor-elect's agenda includes requiring data center operators to hire union workers, protecting water supplies, and preventing companies from using nondisclosure agreements that obscure project details. Hinojosa also plans to eliminate tax subsidies that have cost the state billions in sales tax revenue, according to CNN.
Hinojosa's stance marks a shift from Abbott's previous support for the data center industry, which he once hailed as central to Texas' AI development. However, Abbott had begun to impose restrictions, demanding that data centers cover their own infrastructure costs and use water-efficient technology.
The data center industry, represented by the Data Center Coalition, expressed a commitment to advancing digital infrastructure while supporting energy reliability and economic development. "The data center industry is committed to advancing America’s digital infrastructure, including here in the Lone Star State," said Jess Heck, director of government affairs for the coalition.
Hinojosa's election victory is part of a broader Democratic sweep in Texas, signaling potential changes in the state's approach to data center regulation and AI infrastructure spending. The outcome could slow the rapid expansion of data centers, which has been a significant driver of economic growth in the U.S., as noted by Bloomberg.