President Donald Trump recently expressed criticism towards Texas for its stance against data centers, following a decision by Republican Governor Greg Abbott to halt industry-wide approvals pending further information on power and water usage from these companies.
During an extensive interview with Punchbowl News, Trump remarked, “I saw Texas the other day sort of is against data centers. I think it’s a mistake. And I’m not taking positions, I just think it’s a mistake, because there are other communities that want it. When a community wants it, it means a lot of money is going to come into that community.”
In response, a spokesperson for Abbott defended the governor’s decision, emphasizing the need for transparency. Andrew Mahaleris noted that fewer than 10% of data centers had complied with state requests for information regarding their resource usage. “Many are unaware that the Electric Reliability Council of Texas is tracking a more than 500% increase in peak electricity demand. This unprecedented growth could endanger the reliability and stability of the Texas electric grid,” he stated. “The Governor’s pause requires data centers to provide the Public Utility Commission of Texas and ERCOT with the required information for them to make fully informed decisions. Simply put, Texans must come first.”
The moratorium, announced by Abbott earlier this week, mandates that state regulatory agencies conduct audits of proposed data centers seeking to connect to the state’s electric grid. This includes determining their tax benefits, assessing their power and water consumption, evaluating their cooling methods, addressing community impact mitigation efforts, and identifying facility ownership.
Projects that do not pass Abbott’s comprehensive verification and audit will face denial of grid connection, according to the governor.
This policy shift contrasts with Abbott’s usual pro-business approach and highlights the growing tensions within Texas conservatism, particularly between Trump and constituents in rural areas where most planned data centers are set to be established. Numerous Texans have voiced their opposition to these developments, raising concerns that the facilities might deplete local water resources, inflate electricity costs, and contribute to noise, light, and air pollution.
Abbott’s announcement follows his previous enthusiastic support for the data center industry, where he referred to Texas as the “epicenter of AI development” during an event in November that featured Google’s $40 billion investment in state data center development.
Gina Hinojosa, Abbott’s Democratic opponent, has made enhanced oversight of data centers a central focus of her campaign. She criticized Abbott’s recent move, stating, “Abbott’s call for a ‘pause’ could be for one day – and no one buys it. He’s taken millions from data center CEOs while giving Texans lip service to non-existent restrictions.”
Trump further emphasized the importance of data centers, stating, “For Texas to say no to data centers is a mistake in the sense that it could be bigger than oil.”
