Prediction markets narrow Texas governor race as AI data center backlash grows

Traders in prediction markets are closely watching the Texas governor race for signs that artificial intelligence data centers are causing a political backlash. Incumbent Republican Governor Greg Abbott remains favored to secure a fourth term, but odds for Democratic state Representative Gina Hinojosa have surged.

Odds tighten on prediction platforms

On the Kalshi platform, speculators give Abbott a 60% chance of winning, while Hinojosa holds a 40% chance. Her implied odds have climbed sharply from just 8% in mid-July. Most of that shift happened in recent weeks following a run of tighter public polls.

A similar trend has emerged on Polymarket. There, traders have priced Hinojosa’s chances at 39%, up from a low of 5% in late July. Both platforms settle contracts using official results from the Texas Secretary of State. These market odds reflect betting activity rather than traditional political polling methodologies.

The data center divide

Hinojosa aims to become the first Democratic governor in Texas in over three decades. A core part of her campaign targets Abbott’s past backing of the data center industry. She has called for an immediate halt to new data center construction until lawmakers establish strict limits on the sector.

Abbott had previously championed computing infrastructure. In November 2025, he highlighted a $40 billion investment from Google that included three data center campuses, declaring that Texas would lead the AI sector. However, public sentiment toward the energy-heavy facilities has deteriorated over the past year.

In response to growing public concern, Abbott has pulled back his support:

• In August, Abbott directed an audit of data centers requesting connections to the Texas power grid.
• In September, he paused approvals for all data center permits pending a review of the current application waitlist.

Early voting wrapped up on Friday, with over 7.7 million ballots already submitted across the state.