What the governor-elect of Texas, at the epicenter of the AI trade blowup, is now saying about data centers

By Jules Rimmer

Hinojosa says legislation has to be passed before she'd favor ending moratorium

Texas Governor-elect Gina Hinojosa said data-center construction could continue, after legislation is in place.

The politician most associated with the implosion of the artificial-intelligence trade insists she is not resolutely against data-center construction - but just not now.

"I'm not ruling data centers out. It's not that I hate data centers, we just need to stop what we are doing until we have protections for Texans," said Texas Governor-elect Gina Hinojosa, in an interview with CNN on Thursday.

Texas is so important because a quarter of all AI infrastructure and data center capacity planned is slated for this state alone. It's possible to draw a straight line between the election of a Democratic senator and governor in Texas for the first time in many decades and the 12% plunge in the Philadelphia semiconductor index exchange-traded fund SOX on Thursday.

The iShares Semiconductor ETF SOXX was rallying 5% in Friday premarket trade.

Polls showed that three-quarters of Texans opposed the unregulated spread of data centers. That the governor-elect has been in favor of a moratorium on data centers - started under the incumbent, Republican Greg Abbott - has been interpreted by markets as a brick wall for AI expansion.

In an interview with CNN's Jake Tapper on Thursday, Hinojosa took pains to say that her policies are pro-business.

"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 Texas," she said. "Right now what has happened is data centers have moved into mostly rural communities, and there are no rules and laws to protect Texas and Texans are being taken advantage of, so the difference is we will have laws to protect Texas, and we need to stop what we're doing with data centers until we have those protections."

She added that communities will have to be given the choice of blocking data centers.

Hinojosa also was asked about her plan to block the sale of 1,300 acres of public land in South Texas, including Boca Chica State Park, to Elon Musk's SpaceX (SPCX). Tapper asked about the risk that Musk could move his companies out of Texas.

"Selling our beach to Elon Musk is just something that is almost unimaginable, it's unacceptable," she said. She said Texas could have a strong relationship with his companies - "but on our terms."

-Jules Rimmer

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11-06-26 0520ET