CoreWeave (NASDAQ: CRWV) shares fell more than 9% to $48.62 in Wednesday's premarket trading after Gina Hinojosa defeated incumbent Texas Governor Greg Abbott in the state's gubernatorial election, drawing attention to the company's 262-megawatt data-center commitment in Texas.
Hinojosa has called for a moratorium on new data-center development until Texas lawmakers establish protections addressing electricity costs, water supplies, and local communities' role in approving projects. Her election does not itself impose new restrictions on the company's existing facilities or contracts.
Denton Campus Fit-Out Underway
CoreWeave has contracted 262 MW of critical IT capacity at Core Scientific's Denton, Texas, campus. Core Scientific develops and operates the facilities under licensing agreements with CoreWeave and leases the Denton property from the City of Denton, according to an April 21 regulatory filing. CoreWeave has also contracted 16.5 MW of capacity at Core Scientific's Austin facility.
The Denton campus comprises eight buildings being converted from cryptocurrency mining operations to artificial intelligence and high-performance computing workloads. The April filing identified four buildings, representing approximately 132 MW, as operational and generating billable revenue.
A November 2 report from local development publication Groundbreak said seven of the campus's eight buildings were in service and Core Scientific had begun an interior fit-out in the remaining building.
Texas Department of Licensing and Regulation records identify the work as the Core Scientific DTO Building A project at 8171 Jim Christal Road in Denton. The project calls for converting approximately 27,678 square feet of existing space into a data hall, with an estimated cost of $110 million.
The state registration identifies Core Scientific as the project owner and lists a September 1, 2026, construction start date and a May 31, 2027, scheduled completion. The $110 million estimate applies only to the Building A fit-out and does not include the entire Denton campus. Core Scientific's April filing provides for CoreWeave to pay or reimburse certain development costs under their licensing agreements but does not separately identify the full Building A estimate as CoreWeave's expenditure.
The project involves converting an existing building rather than constructing a new one. However, the registration does not establish how any future statewide moratorium would apply to ongoing conversions.
Share Moves and Sector Weakness
CoreWeave shares rebounded 7.16% on Tuesday, gaining $3.59 to close at $53.74 after an 8.6% decline the previous day. Wednesday's premarket decline more than erased Tuesday's rebound. The stock had reached a regular-session 52-week low of $49.46 on November 2.
The weakness extended beyond CoreWeave, with Applied Digital down about 3% and Nebius falling 1.3% in early premarket trading.
Separately, CoreWeave Tokenized bStocks (CRWVB) was trading at $48.97, down 5% over the previous 24 hours, according to CoinMarketCap. The tokenized instrument trades separately from CoreWeave's Nasdaq-listed shares, and its 24-hour price change cannot be directly compared to the stock's premarket decline.
Existing Texas Restrictions Predate Election
Abbott had already imposed restrictions on Texas data-center development before losing the election.
On August 18, his office announced that CoreWeave, Power House Data Centers and Emergent Data Centers had committed to complying with state standards covering electricity infrastructure costs, water conservation and community protections.
Core Scientific disclosed on September 10 that the Electric Reliability Council of Texas (ERCOT) had conditionally approved 297 MW of existing Denton electrical load as longstanding base load. The grid operator had also included and validated another 74 MW planned for energization in its 2025 transmission-planning studies. Both portions remained outside ERCOT's Batch Zero process, which reviews large electricity-load requests and allocates available grid capacity.
Those figures refer to the campus's electrical capacity, which is different from the 262 MW of critical IT capacity CoreWeave has contracted. The ERCOT disclosure also did not confirm that all other required permits had been approved.
Abbott subsequently directed the Texas Commission on Environmental Quality on September 21 to halt permits sought by data centers pending an ERCOT audit. He also instructed state agencies to withhold related regulatory approvals until they obtained the necessary information to assess development impacts.
Denton's City Council separately approved revised data-center development rules on October 13, requiring council-approved specific-use permits for future projects in eligible zoning districts. On October 27, the council also held a second public hearing and first reading of a proposed local data-center moratorium, with a final decision scheduled for December 1. City officials said the proposed moratorium would pause new development applications but could not halt or invalidate applications already filed.
These existing restrictions are separate from Hinojosa's proposed statewide moratorium, whose scope remains undetermined. No verified decision establishes that construction at Core Scientific's Denton campus serving CoreWeave has been halted or that CoreWeave's contracted capacity arrangements have changed.
Georgia Adds to Regulatory Questions
The same election has also raised questions about IREN's Texas data-center expansion.
The potential for tighter data-center restrictions also extends to Georgia, where CoreWeave has additional contracted capacity. Democrat Keisha Lance Bottoms defeated Republican Rick Jackson in the state's gubernatorial election after campaigning for a statewide pause on new data-center construction.
Core Scientific's April filing identifies 175 MW contracted to CoreWeave across two facilities in Dalton, Georgia. These comprise a 30 MW conversion of an existing facility and a 145 MW new-build development. Including the Texas locations, the facilities account for 453.5 MW of the approximately 590 MW covered by the companies' disclosed licensing agreements. That total represents contracted capacity, not facilities confirmed to be affected by regulatory changes.
