Trump Criticizes Texas Governor’s Decision on Data Centers

President Donald Trump has expressed disagreement with Texas Governor Greg Abbott’s decision to halt approvals for new data centers. Trump labeled the move a ‘mistake’ during an interview with Punchbowl News. The pause on approvals comes as Texas assesses the energy and water demands of the data center industry.

Texas is evaluating the concerns related to data centers’ high electricity and water usage. These facilities support cloud computing and AI, requiring significant resources for cooling. Critics highlight issues such as noise, power grid pressure, rising electricity costs, and environmental effects.

Abbott recently announced that the state will stop granting new data center connection approvals pending a thorough review. This includes evaluating power and water consumption, cooling systems, tax incentives, ownership, and community impact mitigation efforts. Projects not meeting state requirements may face denial.

Governor Abbott’s office emphasized the need to safeguard Texas’ power grid and water resources. A statement from Abbott’s press secretary, Andrew Mahaleris, noted an over 500 percent increase in peak electricity demand. Fewer than 10 percent of data centers comply with power and water usage reporting requirements, Mahaleris added.

Texas is a key location in the AI infrastructure sector. The Electric Reliability Council of Texas (ERCOT) has reported an unprecedented rise in electricity demand forecasts, largely due to hyperscale data centers. Such projects account for 90 percent of large-load interconnection requests, significantly exceeding Texas’ record peak electricity demand.

ERCOT forecasts suggest areas like Dallas, Collin, Denton, Tarrant, and Ellis counties will see significant growth in data center projects. Texas also hosts the proposed $1.1 billion Fort Worth Data Center Project, facing scrutiny over its power and water consumption impacts.

Despite his criticism, Trump’s views conflict with Abbott’s cautious approach to managing the industry’s growth. Abbott has emphasized Texas as a hub for AI development, pointing to investments by companies like Google.

Abbott’s pause affects projects needing state electric grid connections. Some data centers with independent power generation may bypass traditional processes. During a Fox News interview, Trump praised data centers for their potential to lower taxes and boost property values, contesting the skepticism about them.

Public sentiment is divided. A July poll by Emerson College shows 63 percent of U.S. voters oppose nearby AI data centers. Despite concerns, data centers can boost regional economic activity and housing demand, though they might negatively impact homes in close proximity.