Compass Datacenters on the Election of Texas Governor-Elect Hinojosa
Markets fell as Texas’s governor-elect backed a pause on new data center permits and tighter grid rules for hyperscale projects.
- Following the Democratic sweep of Texas state offices on Nov. 3, shares of major data center operators dropped on Wednesday, with IREN falling 5.93% to $23.01 and CoreWeave dropping 5.41% to $50.83.
- Governor-Elect Gina Hinojosa campaigned on pausing new data center approvals until the legislature establishes water, power, and environmental regulations and proposes repealing a 20-year tax exemption she claims costs at least $1 billion annually.
- Texas holds 27% of planned U.S. data center power capacity, making operators with significant Texas exposure particularly vulnerable; Nebius and Applied Digital face less risk with campuses in Pennsylvania, Missouri, and North Dakota.
- Applied Digital CEO Wes Cummins downplayed the risks, stating that stricter siting rules "actually increases the strategic value of our campuses that are already powered, operating, and supported by their communities."
- The Texas Tribune reports "Texas' first divided government in decades," with Republicans expected to retain control of the Texas Senate while the Texas House control remains undecided, complicating future regulatory changes.
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16 Articles
MIT Technology Review
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What Texas Turning Blue Could Mean for Data Centers and the AI Industry in the U.S.
Gina Hinojosa, who will become the state's first Democratic governor in more than 30 years, campaigned on pausing new approvals until Texas enacts stronger protections for local communities.
Texas Blue Wave Could Threaten 27% Of Planned U.S. Data Center Power. Here's What It Means For CoreWeave, Iren, Nebius And Other Neocloud Stocks
Texas just flipped Democratic for the first time in decades, and the new governor-elect has data centers in her crosshairs. Neocloud stocks are already bleeding, but the real question is how much of their future capacity she can actually stop.
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