Gov. Greg Abbott called for a ban on new AI data center development in rural Texas neighborhoods during a campaign stop in Bullard on June 30, along with the elimination of tax breaks the facilities currently receive.
“We must prohibit them from building AI data centers in rural Texas neighborhoods, and we must eliminate the tax break they are getting,” Abbott said. “They must be responsible for funding their own projects here in Texas.”
The proposal extends a regulatory framework Abbott outlined June 10 in a letter to the Public Utility Commission of Texas and the Electric Reliability Council of Texas, which directed the agencies to require new data centers to add their own power generation, cover their own infrastructure costs, adopt closed-loop water systems and file annual usage reports. PUCT and ERCOT have until July 17 to respond. “Any AI data center even thinking about coming here, they’ve got to bring their own money, their own power, reuse their own water and do it in a way that reduces the cost of electricity for residents across our state,” Abbott said.
Abbott’s shift comes eight months after he called Texas the “epicenter of AI development” while announcing a $40 billion Google investment in the state’s cloud and AI infrastructure in November 2025.
Nearly half of planned Texas data centers are slated for unincorporated rural areas with no city government, up from 12% today, according to reporting cited by the Texas Tribune. Polling from the University of Texas/Texas Politics Project found nearly two-thirds of rural Texans oppose data center construction in their communities.
Local governments have had mixed success responding on their own. Hill County passed a moratorium on new data centers in May, then rescinded it after a developer filed a $100 million lawsuit, replacing the moratorium with a development checklist instead. San Marcos banned data centers outright through its zoning code, becoming the first Texas city to do so. Angelina County Judge Keith Wright said his county has no similar option: “We have no authority to do a moratorium or to stop any type of development in the county.”
Abbott campaign press secretary Eduardo Leal said the rural ban is consistent with the governor’s June 10 directive, and press secretary Andrew Mahaleris said Abbott “has been clear that data centers cannot come before Texas families.”
Abbott has received more than $2 million in contributions from tech and AI industry sources since 2025, according to the Texas Tribune.
