The Zhitong Finance App learned that data center developers preparing to build dozens of large-scale artificial intelligence (AI) computing power parks across Texas in the US are already burdened by the suspension of approval by Republican Governor Greg Abbott (Greg Abbott). And with Gina Hinojosa (Gina Hinojosa) being elected on Tuesday as the first Democratic governor of this “Lone Star State” in more than 30 years, they are facing the worst.
During the election campaign, Hinojosa repeatedly called for an immediate suspension of data center development. She claimed that Abbott's previous commitment to restraint data center operators “was just an election year gimmick,” and accused the developers of “driving up residents' electricity prices and consuming large amounts of water resources.” She vowed to suspend approval until the state legislature introduced a bill that prioritizes the interests of Texans to prevent more communities from being unable to fight against these multinational giants.
Hinojosa won, and Democratic gubernatorial candidates from Georgia, Ohio, Pennsylvania and other states won. Nearly half of the AI data center projects to be built in the US may face more stringent local scrutiny and public resistance. This group of Democratic candidates all made strengthening data center supervision the core proposition of the campaign. The election results highlighted that voters' resistance to computing power facilities that support the operation of global AI is rapidly heating up.
This election is part of the Democratic Party's overall victory on Tuesday: the Democratic Party took control of both houses of the Senate and the House of Representatives in one fell swoop, and voters' dissatisfaction with the cost of living and the situation in Iran became an important driver. Next, the Democratic Party will step up its scrutiny of Silicon Valley tech interest groups, and during the first two years of Trump's administration, these Silicon Valley tech interest groups were largely exempt from strong regulation.
Early trading on Wednesday local time, the market has already begun to evaluate the risk of tightening regulations. S&P 500 futures once fell 1.2%, while Nasdaq 100 futures fell 2.2%. Hardware manufacturers from South Korea, Taiwan, and Japan involved in the construction of AI infrastructure in the US weakened simultaneously. Samsung Electronics and SK Hynix (SKHY.US) fell as deep as 4% in the Korean market, and the stock price of Nvidia (NVDA.US) foundry TSM.US (TSM.US) also declined.
The poor election results also overshadowed the impressive financial reports of AI chip manufacturer AMD (AMD.US) and server manufacturer Ultra Micro Computer (SMCI.US) — this financial report originally drove the entire AI infrastructure industry chain to rise.
GLJ Research analyst Gordon Johnson (Gordon Johnson) said in a research report on Tuesday that after Hinojosa won the election, the installed capacity of about 13 GW of data centers in Texas was directly exposed to policy risks, which is enough to supply electricity to about 10 million households at the same time. “Projects that have already obtained electricity targets, permits, and main construction projects can continue; for projects that have obtained electricity targets but have not yet obtained state-level environmental permits, the construction period will be delayed by 12-18 months.”
Johnson added, “Projects that have neither electricity targets nor EIA approval are likely to be transferred to Louisiana or Oklahoma, or simply put on hold.”
Research firm SemiAnalysis estimated before the election that Texas accounts for nearly 30% of the US data center capacity planned to be put into operation in 2028, leading the way among all states. “Once this market stagnates for several months, it will be enough to change the pace of computing power supply across the US.”
The agency assessed that Hinojosa's policy tone is clearly biased: she will push for suspension of approval until legislation is implemented, giving the community the right to speak, stabilizing residents' electricity bills, and abolishing tax incentives for data centers. “The core question now is how long this shutdown will last.”
Jefferies ranked US states according to the political risk of new data center projects: Level 1 represents being friendly to data centers, and level 5 represents strong resistance. Before the election, Jefferies analyst Jonathan Petersen (Jonathan Petersen) and others judged in the report that if Hinojosa is elected, Texas will immediately suspend approval throughout the state, and the risk level will be raised from level 3 to level 4.
Peterson also said, “Regardless of the results of this election, the state legislature may introduce new regulations in 2027 to clarify rules such as grid infrastructure cost sharing, water control, and data center tax incentives. We believe that the new regulations will raise development thresholds and costs even more, and may not completely cut off Texas's project reserves.”
Many data center proposals are also piling up around Columbus, Ohio. Democratic candidate Amy Acton (Amy Acton) defeated billionaire entrepreneur Vivek Ramaswamy (Vivek Ramaswamy) to take the seat of governor, and the state turned blue as a result. Acton argues that there are conditions to immediately suspend approval. Developers must meet a series of hard requirements before construction can begin, promising to “curb the disorderly expansion of data centers.”
Democrat Keisha Lance Bottoms (Keisha Lance Bottoms) was elected Georgia's first black female governor, ending more than 20 years of Republican administration in the state. Georgia has encouraged the construction of data centers, which are the third-largest computing power base in the US, but local opposition continues to grow. During the election campaign, Boltons called for the cessation of new construction projects.
Jeffrey mentioned in the research report that Georgia's election situation is more divided than most other states: “If Boltons wins the election, approval of the project may be temporarily suspended throughout the state.”
Josh Shapiro (Josh Shapiro), the current Democratic governor of Pennsylvania, was successfully re-elected, and the market generally expects the state's policy tone to maintain the status quo. In his early years, Shapiro attracted investment and attracted data center landings, but now his position has changed, openly opposing speculative projects and projects strongly boycotted by local residents.
Prior to the general election, Libby Cantrill (Libby Cantrill), head of public policy at PIMCO (PIMCO), had warned that the gubernatorial election would profoundly affect the prospects of data center projects. The demands for a shutdown of work put forward by several candidates are in line with the suspension order introduced by New York Governor Hochul in July.
Cantril said, “Even if states do not introduce a statewide moratorium, the resistance to advancing AI infrastructure will increase markedly: the certification cycle will be lengthened, and developers will need to make more concessions.”