AI stocks plunged Thursday amid fears that Democrats’ election victories could slow data center construction, a sector that Texas Gov.-elect Gina Hinojosa (D) has pledged to regulate more tightly.
The Nasdaq Composite closed down 5.5%, the S&P 500 fell 4.4% and the Dow Jones Industrial Average lost 1,833 points, or 3.4%, The Associated Press reported.
Nvidia shares sank 9.3%, Advanced Micro Devices plunged 17.3% and CoreWeave, which rents access to AI chips through the cloud, lost 9.8%, AP reported.
Investors worried that incoming officials could delay the AI infrastructure buildout, Reuters reported. Financing costs and questions about AI stock valuations had already weighed on the sector, AP reported.
What Hinojosa has proposed
Hinojosa defeated Gov. Greg Abbott (R) in Tuesday’s election, as previously reported by The Dallas Express. Her campaign platform seeks a moratorium on new data centers until lawmakers enact new regulations.
Hinojosa’s July 23 campaign priorities call for data center operators to hire skilled, licensed union labor; stop relying on subsidies; and prove their projects will not raise household electricity or water costs.
Her proposals also include greater local input, restrictions on nondisclosure agreements and rules that would make water contracts unenforceable if they threaten a community’s supply.
The union-labor requirement and tax changes remain policy proposals.
Musk weighs in on the construction outlook
Elon Musk shared a post from investor Gavin Baker on Thursday and added one word: “Interesting.” He did not specify support for any individual proposal.
Baker, managing partner and chief investment officer of Atreides Management, argued that Hinojosa would allow already permitted projects to finish construction.
“This essentially covers all of the 2027 and likely well into 2028,” Baker wrote.
He placed newly permitted projects subject to future rules on a 2028 or 2029 delivery timeline.
In a November 1 Big Country Politics interview, Hinojosa described the proposed pause as applying to new permits rather than stopping projects already under construction, KTAB/KRBC reported. Baker’s broader claim about all permitted projects and his construction forecast represent his assessment; her written platform does not establish that schedule.
Texas already has a review underway
Abbott had already directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas on August 3 to verify and audit data centers advancing through the grid-connection process before approving additional projects.
As The Dallas Express previously reported, that review examines power demand, water use, taxpayer incentives and community impacts. ERCOT plans to publish a report on or before December 10.
