Texas welcomed the AI boom. Now Abbott says data centers "dug their own grave"

Texas Governor Greg Abbott has issued a stern warning to the artificial intelligence industry, accusing data center companies of "dug[ing] their own grave" and consequently facing public backlash. This comes as opposition to AI data centers has become a significant political force. Similar to Pennsylvania Governor Josh Shapiro and New York Governor Kathy Hochul, who have recently imposed restrictions, Abbott recently directed state regulators to require data centers to pay for the electrical infrastructure they consume and ordered an audit of new projects before they can proceed.

Last November, Abbott hailed Texas as the "epicenter of AI development" after securing a $40 billion investment from Google. However, he has since shifted his stance, directing regulators to make data centers responsible for the full cost of required electrical infrastructure and calling for a reduction in tax incentives. Abbott recently urged the state's regulators to audit data centers seeking to connect to Texas's power grid before granting approval.

The backlash faced by the AI industry is becoming a political problem. Axios reported that the National Republican Senatorial Committee has warned leading AI companies that voter anger over data centers threatens their chances of holding a crucial Ohio Senate seat. According to a recent survey, 61% of Americans oppose the construction of a new data center in their area, with opposition crossing party lines and affecting Democrats, Republicans, and independents alike.

Abbott emphasized the importance of gaining local community support in his statements to ABC's This Week and Fox News Sunday. He criticized data center developers for moving into communities without first securing their backing, stating that the companies "dug their own grave" and deserved the backlash they are now facing. Trump has also criticized Abbott's approach, arguing that Texas should not say "no" to data centers, as the industry could surpass oil in economic significance.

The recent shift in opposition among red-state Republicans highlights an unexpected and alarming development in the AI industry's expansion.