After Backing the AI Boom, Texas Governor Now Wants to Block New Data Centers

Texas Governor Greg Abbott used to strongly support artificial intelligence companies building data centers in his state. Tech companies spent billions of dollars in Texas, and Abbott welcomed them. But now he has made a dramatic change. He wants to block new data centers from rural Texas neighborhoods and end tax breaks for these companies.

Abbott made his new position clear at a campaign event in Bullard, East Texas. He told the crowd, "We must prohibit them from building AI data centers in rural Texas neighborhoods." He also said tax breaks for these companies must stop, and that developers must pay for their own projects. This is very different from what he said just a few years ago.

Abbott's change of heart comes down to three main concerns: electricity costs, water use, and the impact on local communities. Data centers use massive amounts of power to run computer servers and keep them cool. When electricity demand rises sharply, prices go up for everyone — including everyday families. Many data centers also use large amounts of water, which is a big problem in dry states like Texas.

On June 10, Abbott wrote a letter to leaders of Texas's electricity regulators. He told them to make sure data centers pay for all the power equipment they need. He also said those costs must not be passed on to regular Texans. He wants new data centers to use water-saving technology and to be considerate of nearby neighborhoods.

Experts have mixed opinions about whether Abbott's plan will really work. Uzi Dvorkin, a professor at Johns Hopkins University, said electricity is the key issue because data centers want cheap power, and when demand jumps, prices rise for everyone. He said Abbott's plan sounds good but is "a political promise with no mechanism to deliver it." He suggested that making data centers flexible about when they use power would be a smarter and more practical solution.

People living near data centers have raised several serious concerns. These include loud noise, the loss of farmland, and heavy water use near important water sources like the Ogallala Aquifer — the largest underground freshwater supply in the country. Data centers are also highly automated, meaning they create far fewer permanent jobs than traditional factories. These worries have helped push Abbott toward his new position.

Abbott has pledged to work with state lawmakers to phase out tax incentives and require new facilities to generate their own power. His press secretary said the governor believes "data centers cannot come before Texas families." Whether his call to ban data centers from rural neighborhoods will become law is still uncertain. But his shift shows how quickly the debate over AI growth is changing across America.