Texas Accounts for 41% of Expected U.S. Data Center Capacity Amid Delay Risks
Key Facts
Democrat Gina Hinojosa won the Texas governor’s race, unseating Republican Gov. Greg Abbott in a political shift that matters for data center plans in the U.S. state expected to add the most new capacity. The Associated Press said Hinojosa will become the first Latina to hold the office and the first Democrat to govern the state since Ann Richards in the 1990s. The result comes as data center construction plans face growing local scrutiny over their effects on resources and communities. Axios estimated that nearly two-thirds of U.S. data center capacity planned for 2028 could face delays. That does not mean construction will be permanently banned; the agency said most political analysts do not expect Democrats to block construction outright.
Texas is central to the debate because SemiAnalysis estimates it will account for 41% of new U.S. data center capacity in 2028. Axios cited the company as saying a moratorium lasting more than six months could lead to extended delays in the state. The duration of a moratorium matters to developers who need approvals and permits before turning planned projects into operating capacity. Hinojosa campaigned on keeping a pause on data center construction in place until legislation addresses effects on water, electricity, air and property rights. The legislative session cited by Axios ends in mid-2027, making the legislative path and upcoming regulatory decisions a direct focus for the industry.
Abbott had announced a temporary pause on new data center approvals in response to public anger, the Associated Press reported, and in September directed the Texas Commission on Environmental Quality to halt all required permits until the Electric Reliability Council of Texas completed its review. The governor’s directives tied approvals to a review of electricity and water use, and he said data centers should bear the costs of infrastructure, grid protection and local water sources. Hinojosa focused her campaign on data centers and corruption, accusing Abbott of allowing energy-intensive server facilities to proliferate. In this context, the risks are not limited to a stated political position; permits and the timing of their issuance could determine how quickly projects are built. Abbott’s campaign had spent $180 million since the previous year in a race the Associated Press described as having been considered a safe path to a fourth term.
The tougher stance extended to other states that carry weight in capacity plans. Axios said Democrats won the three states after Texas in expected new capacity—Ohio, Georgia and Arizona—and that the winners in Ohio and Georgia support restrictive policies whose details are not yet clear. This does not mean the three states have adopted a unified policy, but their results add the possibility of changing development rules in markets important to projects. In local voting, about 24 proposals to restrict or block development appeared to have passed, out of 41 data center-related measures in 10 states, according to preliminary figures Axios cited from Ballotpedia. Ohio had the most, with 21 local measures put to voters.
Brad Carson, co-founder of Americans for Responsible Innovation, explained the significance of the results, saying: "Voters just sent a clear message that they want rules for AI and data centers." Axios described the issue as tied to affordability concerns, noting that some voters see AI ambitions as a threat that drains resources and pressures community budgets. This follows years of investment promotion through incentives; according to Ballotpedia, 38 states had created tax incentives to encourage data center construction as of April 2026. Voters also considered six data center measures before the November election, and in each case the outcome favored greater restrictions on development. This trend shows the political debate widening from attracting investment to requiring data center projects to bear the costs of their local effects.
Some local decisions will continue after the November elections. On December 1, residents of Clarksville, Arkansas, will vote on whether to keep two ordinances concerning municipal bonds intended to support a data center project. On December 15, residents of Mandan, North Dakota, will vote on a proposal to ban data centers that consume 25 megawatts or more. These dates keep the impact of local voting in focus after the elections, with the measures differing between financing a specific project and a ban based on electricity consumption. In Texas, the legislative session ends in mid-2027, while the effect of any new rules on project timing remains tied to the permitting and legislative process.