Texas Republicans split over data centre growth ahead of January debate
Updated
Updated · The Texas Tribune · May 7
Texas Republicans split over data centre growth ahead of January debate
7 articles · Updated · The Texas Tribune · May 7
At least 82 planned or under-construction centres are in Republican-held districts, as lawmakers weigh water, power and tax concerns tied to OpenAI's Stargate and other projects.
Governor Greg Abbott and President Donald Trump back expansion, but rural Republicans, county leaders and some legislators want pauses, studies or local authority as residents resist projects near homes.
The fight could test Republicans in the midterms, with industry groups ramping up lobbying, donations and a public-relations campaign while the state reviews incentives worth $3.2bn over two years.
While Texas grants billions in tax breaks, who will truly bear the cost for the massive grid upgrades required?
With data centers demanding billions of gallons, can Texas sustain the AI boom without sacrificing local water supplies?
The 2026 Texas Data Center Surge: Economic Promise vs. Environmental and Political Backlash
Overview
Texas is rapidly becoming a national leader in AI data centers, driven by low taxes and major investments like Google's $40 billion plan. This explosive growth has sparked intense legislative activity, including the implementation of SB 6, which requires data centers to pay for grid upgrades and allows power curtailment during emergencies. However, the boom has also deepened a political divide within the Republican Party, with Governor Abbott supporting growth and rural conservatives, led by Lt. Governor Patrick, opposing unchecked expansion due to concerns over water use, grid strain, and community impact. Local governments are leveraging zoning and tax incentives to regulate projects, while the industry pushes back against stricter rules and rising tax costs. Texas’s experience is shaping national debates on balancing economic benefits with environmental and infrastructure challenges in the AI era.