The election of a new Texas governor could have major ramifications for the construction of massive AI data centers in North Texas, and also for the nation.
Analysts say new state rules on how or where data centers can be built appear to be on the way under a new administration, but some believe Texas will still become the largest data center market in the country, with Dallas-Fort Worth at the center of that growth.
During her campaign, Governor-Elect Gina Hinojosa called for a moratorium on data center construction until the Texas Legislature could meet next year and pass laws giving local communities more control over construction.
The question now is whether that could mean a temporary halt to construction next year, how long that pause might last, and whether it might cause some data center companies to see Texas as a short-term risk.
“I think that a moratorium or the threat of a moratorium is enough to get the developers to consider other states. They are in a race and they want speed to power and one of the reasons why they like Texas is because they can move quickly here,” said Michael Webber, an energy policy researcher who studies the data center market at the University of Texas at Austin.
Webber said a short pause in development could help communities, companies and lawmakers find common ground.
But he worries a longer halt could hurt the nation’s ability to compete with China in the race to develop artificial intelligence, with Texas slated as the top state for future data center construction.
“That’s the concern I have. And that’s why I think it’s important not to just have a moratorium, but instead to have a conversation and a negotiation,” Webber said.
Webber expects the Texas data center market to slow in the short term as new rules are considered, then accelerate again.
“So I think we’ll still become number one, we tend to do that. We’re number on in wind, we’re number in batteries, we’re in solar, we’ll probably be number one in data centers. These things all go hand in hand,” Webber said.
Researcher Mohammed Islam, who studies the impact of data centers at UT Arlington told NBC 5 Investigates he believes many data center operators will be eager to collaborate with regulators to develop and comply with new regulations to ensure that projects remain on track. Islam is also an advisor to the City of Fort Worth’s Data Center Commission.
“I believe if everyone works together, we’ll be able to clarify these things, really understand what are the impacts,” Islam said.
In a statement to NBC 5, the Data Center Coalition, which represents the data center industry, said, “DCC looks forward to working with state leadership along with local officials, stakeholders, and Texas communities to continue building trust and supporting responsible data center growth,” said Jess Heck, Texas Director of Government Affairs with the Data Center Coalition.
Even before Tuesday’s election, Gov. Greg Abbott had paused state permits for new data centers to give state agencies time to audit projects in the pipeline and analyze impacts on the electric grid.
But many analysts expected the permitting process could begin moving again once that review was completed in December.
Now, with a new governor set to take office a month later, there are new questions about what will happen in January and beyond.
