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Texas welcomed the AI boom. Now Abbott says data centers "dug their own grave"

Axios ·
Texas welcomed the AI boom. Now Abbott says data centers "dug their own grave"

Texas Gov.

Greg Abbott delivered one of the starkest warnings yet from a Republican executive to the AI industry, telling ABC's Jonathan Karl that data center companies "dug their own grave" and deserve the backlash they're facing after failing to win community support.

Why it matters: Abbott is the latest governor to sharply change course on the AI data center boom he once enthusiastically courted as local opposition becomes a potent political force .

Democratic Pennsylvania Gov.

Josh Shapiro, who last year celebrated a $20 billion Amazon data center investment, imposed new restrictions this week.

New York Gov.

Kathy Hochul last month ordered a one-year moratorium on hyperscale data centers.

Catch up quick: Just last November, Abbott called Texas the "epicenter of AI development" as he joined Google to announce a $40 billion investment into three data center campuses.

In June, however, Abbott directed state regulators to make data centers pay the full cost of the electrical infrastructure they require and called for phasing out tax incentives.

Earlier this month, he ordered regulators to audit data centers seeking to connect to Texas' power grid before allowing the projects to move forward.

Zoom out: The backlash is quickly becoming a political problem for the AI industry.

Axios' Alex Isenstadt scooped last week that the National Republican Senatorial Committee warned leading AI companies that voter anger over data centers was imperiling Republicans' chances of holding a critical Ohio Senate seat.

What he's saying: Abbott told Karl on ABC's "This Week" that the backlash stems partly from the sheer speed of the buildout and partly from developers moving into communities without first gaining support.

"Gaining the support of people in local communities is essential," Abbott said.

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