Texas, which holds more data center capacity under construction than any other U.S. state, is facing growing local opposition even as at least 36 gigawatts of capacity were added to the U.S. pipeline of proposed and active projects during the first quarter of this year, according to analytics firm Wood Mackenzie.
Governor Greg Abbott initially supported expanding artificial intelligence data center infrastructure in Texas but reversed course after resident backlash. He told Fox News Sunday that fewer than 10 percent of data center companies had responded to a state request for information on future power demand projections. Abbott said these companies "dug their own grave" and "got the backlash they deserve."
Local residents in rural and suburban areas have voiced concerns over the facilities' consumption of water and power, as well as rising utility bills. These concerns are particularly focused on large-scale AI data centers.
President Donald Trump criticized Abbott's updated stance, arguing that "for Texas to say no to data centers is a mistake" because the industry "could be bigger than oil." He positioned the industry as a significant economic opportunity.
Despite the political rhetoric, Texas has approved substantial data center capacity that remains under construction. Capital investment in the sector has not slowed, suggesting Abbott's public comments may represent political positioning rather than a policy shift impacting current projects.
