How Could Democratic Wins In Texas Slow US Data Center Expansion

Texas accounts for approximately 27% of planned US data center capacity.

, and TIPP Staff

November 4, 2026 . 11:59 AM

2 min read

AI infrastructure stocks declined on Wednesday after Democrats secured major victories in the US midterm elections, raising concerns about regulatory obstacles to data center expansion.

The biggest setback for the industry came in Texas, where Democrat Gina Hinojosa defeated Republican Governor Greg Abbott. Hinojosa has proposed an immediate halt to new data center development. According to Wells Fargo, Texas accounts for approximately 27% of planned US data center capacity.

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SpaceX shares fell 4%, while Tesla declined 5%. Both companies have significant operations in Texas, where Elon Musk reportedly spent $224 million supporting Republican candidates. Data center operators CoreWeave and Iren also recorded losses.

Analysts warned that Democratic control of Congress and state governments could increase scrutiny of AI infrastructure projects. Democrats also won governorships in Georgia, Pennsylvania and Ohio, which collectively represent significant planned data center capacity.

However, major technology companies including Amazon, Alphabet and Microsoft recorded gains during Wednesday's trading session.

Related Tweet:

AI stocks fall as Texas governor result raises data center risks https://t.co/bxceoUI4kn
— CNBC (@CNBC) November 4, 2026

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