Texas’s Data Center Dominance At Risk

Texas has long been the leading state for data center development in the United States, but recent opposition and moratoriums may threaten that advantage. Data centers are seen as crucial to the AI boom, with developers and companies touting their economic and strategic value. However, polls show widespread disapproval from voters across the country.

A Reuters/Ipsos poll found that 57% would oppose a data center in their community, with 71% in an earlier Gallup survey. President Trump acknowledged Americans' unease about the buildout, but called data centers "tremendously important." Texas accounts for more planned data center capacity than the next three states combined, according to market intelligence platform Cleanview.

However, community opposition and concerns over water usage and grid impacts are complicating Texas' leadership. Governor Greg Abbott has called for new regulations, requiring data centers to pay their own infrastructure costs, provide additional power generation, and reuse their own water. A poll found that 79% of Texans want data centers to disclose water consumption and 75% support funding their own grid upgrades.

Despite these concerns, Texas still generated $4.5 billion in tax revenue from data centers in 2024, though tax breaks used to incentivize construction could mean foregoing over $1 billion each year.