Less than a year ago, Texas Governor Greg Abbott hailed the state as the "epicenter of AI development." Now, seeking re-election, he is calling for sweeping new restrictions on data centers, Reuters reported.
He is not alone. Across the country, as Democrats capitalise on local opposition to data centers ahead of the November elections, Republicans are increasingly breaking from President Donald Trump's pro-AI agenda, according to the news agency. Republican candidates in at least five states, including Michigan, Wisconsin and Pennsylvania, have recently hardened their rhetoric on data centers or proposed restrictions on their development, opening a new fault line within the party.
Republican strategist Brad Dayspring, of Purple Strategies, told Reuters the debate is pitting pro-growth instincts and the push to beat China in the AI race against a populist backlash over affordability.
Texas turns
The most striking shift is under way in Texas, a conservative, oil-rich state that has spent years reinventing itself as a national tech hub. Abundant land and business-friendly regulation have drawn major companies including SpaceX and Oracle, along with entrepreneurs such as Elon Musk, Reuters noted.
Even there, public sentiment has turned sharply against data centres, which opponents say drive up electricity and water bills, pollute the night sky and fail to generate enough tax revenue or jobs to justify the incentives states have offered. An August poll by the Texas Politics Project, cited by Reuters, found only 30% of respondents would support a data centre in their community.
Big tech companies are trying to catch up, pouring more than $300 million into the midterms according to election records and disclosures reviewed by Reuters, alongside a large advertising campaign aimed at explaining the benefits of data centres to consumers.
Abbott and Paxton's pivot
Abbott is now calling for expansive new regulation of data centres, the repeal of tax incentives for their construction, and restrictions on development in rural communities. A state audit he announced on 3 August has effectively paused approvals for new grid connections, Reuters reported.
Republican Attorney General Ken Paxton, locked in a tight Senate race, has also hardened his position, unveiling a plan late last month that his campaign says will keep America competitive while curbing what it calls the "negative impact of data centers."
The shift puts both men at odds with Trump, who warned in a Truth Social post on Monday that Americans fighting data centres risked ending up "backwards and poor." Republican officials have downplayed the split. Natalie Baldassarre, national press secretary for the Republican National Committee, told Reuters, "We're going to advise our candidates to do what's best for them and their communities."
A reversal under political pressure
Texas is one of the country's largest and fastest-growing markets for AI-related data centre development, hosting OpenAI's flagship Stargate campus in Abilene among other major projects, according to Reuters. Paxton previously embraced AI data centres as a driver of jobs and growth, voting as a state senator in 2013 for a tax incentive that later fuelled major data centre investment in Texas. In February, local commissioners in Hood County asked Paxton for a legal opinion on whether they had authority to temporarily halt data centre development; the request remains pending, according to the attorney general's website.
Paxton's Democratic opponent, James Talarico, accused him of political opportunism given campaign contributions he has accepted from the tech industry, saying in a statement carried by Reuters that Paxton was "scared his ties to big data center companies will lose him the election." Paxton's campaign did not respond to Reuters' questions about his shifting position, but accused Talarico in a statement of taking money from similar corporate interests and of voting for a sales tax incentive for large data centres as a state senator in 2023.
Political scientist David Karol, of the University of Maryland, told Reuters that Republicans, long positioned as champions of corporate America, increasingly recognise the need to put distance between themselves and the big tech companies behind data centre development.
The governor's race
In the governor's race, Abbott's Democratic opponent, Gina Hinojosa, has called data centres "the fight of this election season," telling Reuters that his temporary pause on new approvals is set to end on 4 November, the day after the election. Eduardo Leal, press secretary for Abbott's campaign, said in a statement that the governor had directed Texas regulators to ensure data centres do not draw water needed by communities or power needed by the state's electricity grid, to lower costs for consumers, and to pay for their own electricity infrastructure.
Big tech's late response
Reuters reported that data centres have become a prominent midterm issue largely because the industry was slow to respond to public backlash. Veteran Republican strategist Kevin Madden, a former adviser to Mitt Romney, said two years of local opposition passed without the industry engaging at the level it needed to.
Leading AI companies are now trying to make up ground. Federal election filings cited by Reuters show two super PACs linked to Anthropic have spent more than $2.6 million in Texas, while super PACs tied to OpenAI co-founder Greg Brockman have spent more than $4.8 million across the state. Meta has given about $1.4 million to a super PAC focused on Texas state-level candidates, according to tax filings.
Karol told Reuters it was notable that, at a time when the two parties appear to disagree on almost everything, opposition to data centres has emerged as a rare point of bipartisan alignment.
Source: Reuters
