Abbott Hits Pause: Texas Freezes New Data Center Approvals Amid Growing Backlash

Texas Gov. Greg Abbott — who has spent the past two years branding the state as the "epicenter" of AI development — reversed course this week, ordering a moratorium on new data center approvals until state regulators can audit the projects seeking to join Texas's power grid.

In a Monday letter to the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT), which oversees roughly 90% of the state's grid, Abbott directed both agencies to conduct a "comprehensive verification and audit" of proposed facilities before allowing any new connections. Developers will now need to disclose their projected electricity demand, water use and cooling technologies, tax breaks received, project ownership, and expected impact on surrounding communities. Any project that doesn't comply, Abbott wrote, "must be denied connection to the Texas grid."

The move comes amid mounting public frustration over the rapid, often opaque buildout of hyperscale data centers statewide — facilities that consume enormous amounts of electricity and water while frequently operating with limited public disclosure about who actually owns them. Reaction has been sharply split. Texas Agriculture Commissioner Sid Miller, a fellow Republican who has publicly sparred with Abbott over the issue, dismissed the directive as insufficient, writing that it was "all hat and no cattle — empty political rhetoric wrapped in meaningless fluff" without accompanying legislative action. Democratic gubernatorial candidate Gina Hinojosa went further, accusing Abbott of using his own appointees to manage the fallout from an industry he'd previously courted with incentives.

The ripple effects are already visible locally. In Brownsville, city commissioners held a workshop the day after Abbott's directive to weigh their own proposed 90-day moratorium on new data center approvals while officials review local development rules — a debate that has folded into a broader zoning discussion covering event centers and other land uses. In Central Texas, meanwhile, landowners have gone even further, attempting to invoke a dormant provision of the Texas Agriculture Code — on the books since 2001 but never previously used — to shield agricultural communities from data center development altogether.

Notably, Texas isn't alone in reconsidering the industry's rapid growth: New York Gov. Kathy Hochul recently ordered her own year-long pause on the largest data center projects, drawing criticism from President Trump. How long Texas's audit will take, and whether it leads to lasting restrictions or simply delays projects already in the pipeline, remains an open question state officials haven't yet answered.