Texas Can Lead the AI Revolution Without Leaving Texans Behind

• July 30, 2026

Aerial view of a large brick building labeled Element Critical with HVAC units on the roof, parking lot with cars, landscaped grass, and surrounding roads and trees.

In an aerial view, the Elemental Critical Data Center facility is seen on April 8, 2026, in Austin, Texas. Texas is projected to lose more than $3 billion in sales tax revenue due to an exemption benefiting the state’s rapidly expanding data center industry, making it one of the costliest incentive programs in the nation. (Brandon Bell/Getty Images)

With great power comes great responsibility—literally.

With at least 248 planned projects and hundreds of existing facilities, Texas is among the top states leading America’s data center boom. But each data center brings both economic opportunity and potential harm, so state policy should ensure that the costs remain with the companies, not local residents.

In other words, data centers must benefit Texans, not the other way around.

According to poll published in June, most Texans, including nearly two-thirds of those living in rural areas, oppose data centers in their own communities. Opposition was strongest in rural Texas, where 62% of respondents opposed local data centers. Locals say they should not have to bear the costs of artificial intelligence expansion through higher electric bills, limited water supplies, or expensive infrastructure incentives.

On this, even Republican Gov. Greg Abbott and Democrat state Rep. James Talarico agree.

“Governor Abbott has been clear that data centers cannot come before Texas families,” Abbott’s press secretary, Andrew Mahaleris, said in a statement to the Daily Signal.

The governor has directed the Public Utilities Commission and the Electric Reliability Council of Texas (ERCOT) to require data centers to pay for their own infrastructure, bring their own power, reuse their own water, and lower residential electric bills, according to Mahaleris.

“These steps protect Texans from higher costs and negative impacts on their communities,” he said. In a June directive to state regulators, Abbott called for policies that welcome data center investment while protecting Texans from the costs. He urged regulators to ensure companies pay for their own electric infrastructure and pledged to pursue legislation for water-efficient cooling, greater transparency, and safeguards for nearby communities.

Talarico, who is running against Texas Attorney General Ken Paxton for the U.S. Senate in November, has proposed many of the same guardrails. This includes eliminating tax incentives and requiring data centers to pay their own way. He is also promising local communities more authority over the approval or denial of data centers.

For now, Talarico’s stance is similar to Abbott’s, even while they disagree on gun control, abortion, and gender ideology.

Abbott’s Democrat opponent for governor in the upcoming midterm election, Democrat state Rep. Gina Hinojosa, is not playing the moderate game. She urged the governor to temporarily pause new data centers via executive order until the Legislature reconvenes in January, arguing for a special session to address the issue before 2027.

But Abbott’s policies already seem to be holding data centers accountable. In July, developer Diode Ventures withdrew plans for a proposed data center near Cedar Creek Lake in East Texas after finding it could not meet the governor’s new benchmarks. “Data centers that want to do business in Texas must meet a clear standard. This project did not,” Abbott said in a news release at the time.

The debate over data centers has become increasingly polarized: One side completely opposes the developments, and the other argues that opposition to data center development threatens America’s national security.

Country singer and Texan Willie Nelson is in the first camp.

“Our community, like many others, needs to fight against the data centers invading our land,” Nelson said in an X post. “The last thing we need is a loud, water thieving, light polluting, data center anywhere near our town.”

Others argue that slowing data center development could have national security consequences by weakening America’s position in the global race for AI dominance. One Fox News opinion writer argued that restricting data center development would undermine America’s ability to compete with China in the AI race, comparing opposition to obstructing U.S. defense production before World War II.

The debate shouldn’t be framed as a choice between Texans and AI. Texas can lead the AI revolution while ensuring data centers remain accountable for their demands on water, electricity, and infrastructure.

After all, everything’s bigger in Texas. The state’s AI ambitions should be no exception, as long as Texans come first.

Lauren Washburn

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