Hinojosa wins Texas governor race after pledging to curb data centers

Democrat Gina Hinojosa defeated Republican Gov. Greg Abbott in the Texas governor’s race after campaigning on regulating data centers. AI data-center stocks fell the next day.

Abbott conceded at 10 p.m. Central on Nov. 3, The Texas Tribune reported that day. Hinojosa becomes the first Latina governor of Texas. “We shocked the world tonight,” she said in her victory speech. Abbott’s ad spending was nearly $118 million, against her $26 million, the Tribune reported.

Hinojosa Campaigned Against Data Center Growth

Hinojosa blamed Abbott for the rapid growth of data centers and for what she called a Big Tech takeover of Texas land, resources and schools. The Tribune cited discontent over data centers as one factor that helped her emerge as Abbott’s toughest challenger. She pledged, if elected, to push lawmakers to regulate them.

Her campaign’s July 23 release called on Abbott to “sign an emergency executive order putting a moratorium on data centers until the legislature meets.” It set out her priorities for a session: require licensed union labor, let communities decide, ban nondisclosure agreements for data center companies and end subsidies. She also wants companies to show households will not pay more for electricity or water, and water contracts made unenforceable if they threaten a community’s supply.

Abbott Had Already Moved Toward Limits

Abbott shifted his position before the vote. Fox 4 reported July 24 that at a campaign stop earlier that month he said, “We must prohibit them from building AI data centers in rural Texas neighborhoods” and “We must eliminate the tax break they are getting.” In 2025 he had said Texas would be the “centerpiece for AI data centers.”

The Public Utilities Commission of Texas and ERCOT, the state grid operator, published new data center rules in response to an Abbott letter dated June 10, Fox 4 reported. Data centers pay for transmission built for them, go through a grid screening process and face quick power cuts when ERCOT orders it.

Data Center Stocks Fell the Day After

AI data-center stocks slid Nov. 4 after the Democratic midterm sweep, Reuters reported. Cipher Digital fell 14.3%, Vistra 9%, GE Vernova 5.8%, CoreWeave 5.3%, Constellation Energy 5% and Applied Digital 4.1%. First Solar rose 13.8% and Sunrun 12.5%.

What It Means for the Labs

We think the labs depend on data center capacity, so a state moving toward limits on it matters to them. The winner campaigned on regulating data centers, and the incumbent had already moved toward limits and new grid rules before the vote. Reuters reported that data-center stocks fell Nov. 4 after the Democratic sweep. The moratorium in Hinojosa’s July 23 release was a request to Abbott. Her pledge as governor is to push lawmakers to regulate.