Despite recent political concerns about data center growth, industry insiders maintain that the data center boom is far from over [1]. According to CNBC's analysis, not a single utility CEO at the EEI conference anticipates a slowdown in electricity growth expectations, suggesting strong underlying demand for data center infrastructure [1]. While newly elected politicians in states like Texas have campaigned on restricting data center development due to perceived affordability concerns, the regulatory reality suggests these efforts may have limited impact [1].
The regulatory landscape reveals that data center development is primarily a state-level issue with limited federal control [1]. In Texas, the energy and data center capital, Governor Greg Abbott has already implemented a quiet "pause" on data center permitting, with authority concentrated in two key agencies: the Public Utility Commission of Texas (PUCT), chaired by pro-growth appointee Thomas Gleeson through September 2029, and the Texas Commission on Environmental Quality (TCEQ), run by Brooke Paup [1]. Unless these regulators step down or are replaced, the regulatory environment may not change significantly [1].
Crucially, political efforts to restrict data center growth in states like Texas are likely to simply redirect development rather than halt it [1]. Louisiana Governor Jeff Landry and Oklahoma officials are actively recruiting data center companies, with both states offering gas-rich resources and abundant power capacity [1]. Goldman Sachs projects that midterm election results pose only modest risks to AI investment, with newly elected Democratic governors in states accounting for over a third of planned U.S. data center capacity expected to impose moratoria—though these will likely only impact projects not yet permitted, leaving the vast majority of planned 2027 construction unaffected [1].
CONCLUSION
The data center sector appears resilient despite political headwinds, with utility executives showing no signs of anticipating demand slowdowns and regulatory restrictions likely to redirect rather than eliminate growth [1]. While some states may implement moratoria on new projects, the vast majority of planned 2027 data center construction is expected to proceed unaffected, with alternative growth markets like Louisiana and Oklahoma positioned to capture displaced investment [1].