Texas was the new epicenter of the AI data center buildout. That might be kaput.

Texas is the fastest-growing data center market in the US and the launchpad for Big Tech's largest AI buildouts. The midterm returns may jeopardize that status. Democrat James Talarico defeated Ken Paxton for US Senate, Gina Hinojosa unseated incumbent governor Greg Abbott, and Democrats won control of the Texas House for the first time in 24 years.

Data centers were a constant on the campaign trail for both Talarico and Hinojosa, who shifted from backing the industry to calling for an outright moratorium on new facilities. Industry insiders sensed the turn before polls closed: at the DCD conference in Ashburn, Virginia, on Tuesday, panelists said Texas had been the easiest place to build for years — until September, when developers noticed the governor's office had stopped responding to their emails. On September 21, Abbott directed a key state regulator to halt data center permits.

Conference panelists expected that order to slow projects already underway, with new ones possibly halted altogether, and the governor-elect appears eager to extend the freeze. The stakes are large. Stargate Frontier in Shackelford County is projected to serve 1,820 megawatts — more than twice the largest data center currently operating in Texas. Nexus Hubbard, intended mostly to serve Anthropic, is planned at 6,400 megawatts, the second-largest project under construction in the US.

Banks and lenders are already getting pickier about the projects they back, and because the buildout underpins growth in the economy right now, delays could have ripple effects. The voter signal was national: midterm outcomes backed protecting ratepayers from data-center-driven electricity bill increases, and some larger bans on new data centers won support as well. The results also suggest Big Tech failed to sell voters on the promise that AI-powered abundance would improve health care and lower prices.

It remains unclear whether the counties with the largest data center presence actually drove these Democratic wins, or whether the anti-data center vote came from elsewhere; results were mixed, with some hotspots shifting blue while west Texas counties stayed red. Approvals are also fragmented among city governments, county officials, and state offices, so the real test is whether newly elected officials align to resume permitting or push a moratorium — and how quickly.