AUSTIN, Texas — Gov. Greg Abbott is calling for new restrictions on where AI data centers can be built in Texas, focusing on rural areas and sites near neighborhoods as he argues communities should not be adversely impacted.
On the campaign trail in East Texas Tuesday, Abbott said he is “pushing back against these AI data centers that are trying to build in our neighborhoods” and added, “We must prohibit them from building AI data centers in rural Texas neighborhoods.” He also promised, “We will get that done.”
When asked about Abbott’s comments, his campaign press team said his remarks align with what he said in a letter to the heads of the Public Utility Commission of Texas and the Electric Reliability Council of Texas. In that letter, Abbott said he would work to ensure local communities are not adversely impacted by data centers.
Everything the Governor said tracks with his June 10th letter. As the Governor said in the letter, he will work with lawmakers to ensure local communities are not adversely impacted.
The Electric Reliability Council of Texas tells CBS Austin it “will continue working with the Public Utility Commission of Texas, statewide leadership, and the Legislature to balance the needs of unprecedented load growth and a thriving Texas economy while ensuring a reliable Texas grid.”
Kirk Offel, CEO and co-founder of Overwatch Mission Critical, a company in the digital infrastructure space, said he’s “in favor” Abbott’s comments. “There’s nothing that the Governor had said that should be of massive concern to people that are currently involved with building data centers,” Offel said.
As Abbott has pushed for data center companies to pay for their own infrastructure and reuse their own water, Offel said companies want to be viewed differently. “We want to be seen not only as a utility, but as someone who’s no longer a consumer of utility,” he said.
More than 180 data centers are planning to be built in Texas, according to the website Cleanview. There are several of those throughout central Texas, including in Travis, Milam, Williamson, Hays, and Caldwell counties.
One of the largest planned data centers is supposed to open in Caldwell County in the future. Caldwell County says they have no comment at this time when asked about the governor’s comment
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Offel said Abbott’s comments do not necessarily mean those projects will be stopped. Asked, “What does that mean for those facilities that are in planning for the future? That have not opened yet,” Offel responded, “It certainly doesn’t mean it’s the kiss of death.”
He also added, “It means that they as developers need to simply walk in and engage in a very open and transparent way with the local communities and let them know what they’re getting.”
Whether Abbott can deliver on his promise is a separate question, according to Mark P. Jones, a political science professor at Rice University. “This is quite possible, but it would definitely require that the governor go through the Texas legislature,” Jones said.
Jones said such a move could also shift authority to local governments, noting, “The county officials don’t have many tools to regulate where these centers operate, how large they are.”
Another part of Abbott’s speech included what he said about tax breaks for data center companies. On that point, he said, “we must eliminate the tax (0:38) break they are getting that must be responsible for funding their own projects here in Texas.”
This is something Offel is also in favor for, and something Jones believes is more likely to occur in the upcoming 2027 legislative session. “Because from a budgetary perspective, that this would provide more revenue by removing those exemptions,” said Jones. “And also, that’s something that data centers can probably bake into their calculations when determining whether to invest or not invest.”
Jones says this is almost sure to be a hot topic come next session.
Abbott’s Democratic opponent in the Texas gubernatorial race, Gina Hinojosa, said in part that the governor has no credibility on the issue. Her full statement can be read below:
Nice try. Data centers are moving to Texas because Abbott helped create the most generous tax dollar giveaway to data centers in the country so Texans would foot the bill. This is a CYA move by Abbott. He is backtracking now because I’ve been touring the state since last year with a clear message: data centers are owned by the richest men in the world and they should pay for themselves.Greg Abbott has zero credibility here – no one believes that the arsonist is going to put out the fire.
Williamson County officials were also contacted for this story; we have yet to receive a response.