Texas Governor-Elect Wants Data Center Pause; White House Says ‘Communities’ Should Decide

Texas Governor-elect Gina Hinojosa said Thursday that the state needs new laws on data centers and should stop building them until they exist, the same day the Nasdaq plunged on fears that Democratic wins would bring moratoriums on the AI buildout. 

“We will have laws to protect Texans, and we need to stop what we are doing with data centers until we have those protections,” the Democrat told CNN’s Jake Tapper, in an interview first reported by The Epoch Times.

Hinojosa on AI/Data Centers: We have always been a pro-business state in Texas. But what changes now with me as governor is it has to be a partnership that benefits Texans. 

What has happened is data centers have moved into mostly rural communities, and there are no rules and… pic.twitter.com/N3HEdlwN81

— Acyn (@Acyn) November 5, 2026

Tapper put the market reaction to her directly: “Your victory in particular is one that we’re told AI investors are worried about, given your promises of a temporary data center moratorium.” He added that CNN’s voter polls on her race showed Texans opposed to building data centers in their communities, 75% to 25%. Hinojosa did not back off. “We have always been a pro-business state in Texas, but what changes now with me as governor is it has to be a partnership that benefits Texans,” she said. “Data centers have moved into mostly rural communities, and there are no rules and laws to protect Texans.” Asked whether data centers can still be built in Texas, she said communities need “a seat at the table to decide if and how these data centers come into their communities,” and “have to be able to walk away from the table to leverage what they need for their communities.” “It is not that I hate data centers. I hate the way they are taking advantage of Texas. And that stops when I’m governor.”

The White House answered Friday morning. National Economic Council director Kevin Hassett told CNBC there is “plenty of room for data center growth to continue,” according to Walter Bloomberg’s post, and other accounts quoting the interview have him adding, “We want communities to decide on data centers.” We could not find a transcript or video of the CNBC segment, so the second line rests on those accounts.

HASSETT: PLENTY OF ROOM FOR DATA CENTER GROWTH TO CONTINUE -CNBC

— *Walter Bloomberg (@DeItaone) November 6, 2026

It is a notable turn for an administration that has treated data centers as a national priority. President Trump said in his State of the Union that tech companies had agreed to pay a greater share of the costs data centers put on utilities and their customers, and on Oct. 21 he suggested developers pay communities a “dividend” to make the projects popular, the Epoch Times noted. The president’s own aide is now conceding the local-consent principle Hinojosa campaigned on.

Hinojosa beat Republican incumbent Greg Abbott on Tuesday and promised a moratorium on new data centers during the campaign. Abbott had already moved: on Sept. 21 he ordered the Texas Commission on Environmental Quality to halt all data center permits until the state’s grid operator finishes an audit, and a public-radio report found the agency kept issuing some permits afterward. Hinojosa is set to be sworn in Jan. 19, 2027.

The market cost is already large. As we reported, the Nasdaq fell more than 5% by midday Thursday and a Morgan Stanley index of neocloud stocks dropped 12%, with Goldman estimating that states likely to restrict data centers hold about 45% of planned U.S. capacity and Texas alone about 25%.

Texas is also where Elon Musk’s companies are based, and the Epoch Times noted that he said on Wednesday he spent $158 million on Ken Paxton, who lost the Senate race to Democrat James Talarico. Hinojosa told reporters she asked the Texas Parks and Wildlife Commission not to act on a proposed sale of Boca Chica State Park to SpaceX during the transition.