Illustration by Alex Nabaum
Audio By Carbonatix
Last week, President Donald Trump made a rare sort of remark when he called a recent decision by Texas Gov. Greg Abbott’s “a big mistake.”
“I saw Texas, the other day, is against data centers; I think it’s a big mistake,” Trump said during an Aug. 7 interview with Punchbowl News.
Given how the two leaders have been tightly aligned in areas ranging from immigration to election security for many years now, this isn’t an insignificant development. But concern over the proliferation of data centers seems to be alarming voters and politicians on both sides of the aisle.
A few days before Trump’s interview, Abbott announced a stop on the approval of data centers until regulatory agencies can audit proposed data centers seeking connection to the state’s electric grid. For a governor and a state that has historically been staunchly pro-business and pro-development, Abbott’s moratorium is also far from an insignificant move.
We’ve recently reported on some battles over data centers in Red Oak and Hood County, but it’s not only rural areas that are getting in on the act. Dallas itself has become a data center hotbed, and that doesn’t appear to be stopping anytime soon. Recently, The Dallas Morning News reported that the soon-to-shutter Market Hall could soon be an energy-hungry data center, for example.
As often as you might see news about data centers now, it’s likely only going to become more frequent. Here are a few things to know moving forward.
How big is this really?
Big. Really big. Dallas has become the world’s No. 1 primary data-center market, according to Cushman and Wakefield’s 2026 ranking – a significant indicator of the strength of North Texas’ enormous development pipeline and access to power, land and connectivity. ERCOT is now tracking more than 474 gigawatts of large-load requests, about 90% of them from data center, which reportedly dwarfs the state’s existing electricity demand.
It’s Texas. Haven’t we always had problems with energy shortages during extreme weather? What’s different now?
Data centers are unusually large electricity customers and Texas continues to receive an exorbitant number of requests from companies looking to build them. A 75-megawatt facility like a data center uses electricity on a scale that ERCOT now needs to study alongside other large projects rather than simply evaluating it as an isolated customer.
The issue isn’t just that data centers use a lot of electricity. It’s that Texas is suddenly being asked to accommodate electricity customers whose demand can rival that of entire cities in a relatively short timeframe.
What else could communities be worried about, other than power usage, when it comes to data centers?
Take a look at what Fort Worth has been addressing lately. Cowtown is taking things steps beyond merely debating whether it wants data centers by looking to write rules governing how they can be built because of concerns ranging from noise and water, among other concerns. The city’s proposed regulations would require noise studies, restrictions on generators and a 300-foot minimum setback from residential properties for certain facilities, for example.
Along similar lines, Abbott’s moratorium order directs state agencies to examine data centers’ effects on water and infrastructure, among other things.
“Abbott is asking the Public Utility Commission of Texas and the Electric Reliability Council of Texas to ensure data center developers provide information on tax breaks they will receive; power use and generation; water use and cooling operations; efforts to reduce impacts on local communities; and ownership of the facility,” the Texas Tribube reported last week. “Any projects that fail Abbott’s ordered ‘comprehensive verification and audit’ should be denied connection to the grid, the governor said.”
According to residents in Hood County, for another example, data centers are so disruptive to tier everyday lives that some have alleged that cardiac issues, tinnitus, permanent hearing loss and insomnia have developed from the noise created by a nearby crypto mine.
What does the data-center boom actually mean for North Texas residents?
There are some positives to consider that makes this overall issue one that divides many, even if not exactly along party lines as we noted earlier. According to the city of Fort Worth’s website, data centers can go a long way in helping a city pay for itself.
“Over the last five years, data centers have generated more than $83 million in gross property tax revenue for the city,” the city’s official website states. “In 2024, gross property tax revenue from data centers equaled the equivalent of what the city collects from roughly 8,300 average single-family homes.”
Such a shot at increased tax revenue has to be a consideration for a city like Dallas, who is in teh midst of one oif its toughest budget seasons ever, thanks to a massive shortfall that has seen a number of cuts and layoffs already. But it’s also pretty common for such developments to be the recipients of sizable tax breaks.
Data centers bring jobs, and they need to be constructed, which also helps from a job-creation perspective. The more welcoming a city or region is to data center development, the more favorable the region is likely to be viewed by other major players in the AI field as well. The latter point has long been enough for Abbott and other pro-development politicians to keep things relatively loose when it comes to data centers, until recently, that is.
Why is Texas suddenly slowing things down?
For years, Texas aggressively courted data centers to advance its technology and economic-development strategy. Now, as the industry’s growth increases pressure on the state’s power grid and water supplies, Abbott, among other state leaders, is asking whether that growth can continue without shifting too much of the burden onto Texans.
