Texas data center approvals face an uncertain future as Governor-elect Gina Hinojosa prepares to take office on January 19. Following her victory on Tuesday, Hinojosa’s campaign promises threaten to extend the current freeze on data center approvals until legislators pass new state laws next year, potentially reshaping the state’s digital infrastructure.
This shift represents a significant departure from the stance of outgoing Governor Greg Abbott, who spent much of his tenure championing Texas as the “epicenter of AI development.” While Abbott implemented a moratorium in August regarding data center approvals at both the environmental permitting agency and the state grid to ensure facility information was audited and compiled, Hinojosa’s campaign rhetoric expanded upon the existing suspension of grid connections and environmental permitting. The Texas Tribune reported that data center approvals could remain paused in Texas until legislators pass new state laws next year if Hinojosa keeps her campaign promises.
Grassroots Opposition Challenges Texas Data Centers
Grassroots opposition to data centers has mounted in communities across Texas. A wide array of political voices has voiced alarm over the staggering estimates regarding how much electricity these sites might pull from the state grid, alongside the opaque requirements for water usage in a region already facing significant drought issues.
Greg Abbott is still approving data centers in Texas despite his election year “pause.” That’s Abbott’s playbook: he sells us out and then lies about it. pic.twitter.com/ozFasjNs3W
Hinojosa’s proposed policy agenda extends beyond a simple pause. Throughout her run for office, she presented a list of legislative goals that included mandating that data center firms employ union labor, safeguarding local water resources, and prohibiting companies from utilizing nondisclosure agreements that impede public oversight of development projects. Additionally, she committed to protecting Texans from increased utility costs driven by these facilities and eliminating tax breaks that have cost the state billions in potential sales tax revenue.
Data Center Coalition Defends Industry Growth
Jess Heck of the Data Center Coalition said: “The data center industry is committed to advancing America’s digital infrastructure, including here in the Lone Star State, as well as supporting energy reliability and affordability and promoting long-term, responsible economic development.” The coalition, Heck continued, “looks forward to working with state leadership along with local officials, stakeholders, and Texas communities to continue building trust and supporting responsible data center growth.”
The Texas Tribune reported that data center-related donors gave Abbott some $9 million since July 2025. The audit by grid regulators and operators was expected to last until December. Abbott had required officials to gather data regarding water consumption and tax incentives, determine if these facilities were providing their own water or power sources, and ensure that data centers utilized water-efficient systems while funding their own electrical infrastructure.
Permitting Chaos Exposes Regulatory Gaps
The regulatory landscape became increasingly volatile in October, after environmental and community activists discovered that certain data center permits had been granted despite Abbott’s moratorium, which subsequently forced the agency to disable its online application portal. Furthermore, various local county officials had complained about having insufficient power under existing state statutes to oversee data center operations.
Elon Musk, who founded artificial intelligence company xAI and supported Abbott, posted on X: “Data centers in space looking pretty appealing right now.”
As Hinojosa prepares to work with a Democrat-dominated Texas House, the path forward remains tied to the legislative session next year. Data Center Watch, which researches opposition to data centers in the United States, said in a Tuesday analysis that the state “offers one of the clearest examples of data center regulation becoming an election issue.” In their research, the organization discovered that 43% of the 74 gubernatorial candidates analyzed across 36 states expressed support for banning or placing a moratorium on data centers.
With the audit period expected to be completed this year, all eyes turn to the legislative session next year to see if Hinojosa can successfully turn her campaign promises into law. How do you believe the state should balance the massive energy requirements of AI infrastructure with the concerns of local residents regarding power and water usage?
