Texas Voters Unite Against Data Center Expansion

Some residents have grown so frustrated with the rapid expansion of data center developers in Austin and its suburbs that they are willing to vote for Democrats, a shift that is reshaping the state's political landscape.

Ask Texas NAACP president Gary Bledsoe about the opposition to these projects, and he can rattle off numerous instances where locals are fighting back. This includes a battle in Taylor over a plan to build a data center on parkland, a contentious situation in Temple where the mayor and city council faced recalls, and San Marcos, which became the first city in Texas to ban data centers.

Nowhere in the world are data centers growing more explosively than in Texas. With the midterm elections approaching, the fight over data centers has become "the issue in Texas." The state’s NAACP recently joined dozens of groups across the political spectrum to form the We the People Texas coalition to halt or stall construction. Their grievances vary, ranging from concerns about water consumption in a dry state and tax subsidies to objections to new gas and wind plants built to meet rising electricity demand.

A broad range of voters seem to agree that the status quo is unacceptable. An August poll found that a majority of Texans, 57 percent, oppose the construction of data centers. This opposition spans party lines, including 43 percent of Republicans, 75 percent of Democrats, and 54 percent of independents.

"We have almost nothing in common in so many other ways. And yet you get us in the room with this issue, and it’s like a wall," says Bledsoe.

Initially proclaiming Texas the "epicenter of AI development," Governor Greg Abbott is now fighting for reelection against Democrat Gina Hinojosa, who is seen as a contender in a reliably red state. In each race, candidates must win over voters worried about their water, land, and livelihoods being consumed by data centers. Both Republicans and Democrats are attempting to distance themselves from an industry that has taken deep root, but voters appear skeptical of these efforts.

Jet Parker, cofounder of Save Rural Texas and part of the We the People Texas coalition, notes that Democrats, libertarians, independents, and Republicans have united against a common enemy. "You’re talking about Democrats, libertarians, independents, Republicans, all in one fight … we have almost nothing in common in so many other ways. And yet you get us in the room with this issue, and it’s like a wall … fighting one big enemy," Parker explains.

Save Rural Texas formed after successfully delaying a data center project in the Texoma area. Parker, a corporate coach, wrote a handbook for other communities and travels to train grassroots groups. She warns Republicans that backing data centers will cost them the state, stating, "You just pissed off a lot of people in rural Texas who are supposed to carry you across the [finish] line."

For years, Texas has been welcoming to data centers, passing a sales and use tax exemption in 2013 under Rick Perry and expanding it under Abbott to include hyperscale centers that house thousands of GPUs. This exemption meant developers paid no state taxes on equipment and electricity for 20 years. However, the boom to support generative AI models has proven costly; the tax break is estimated to cost the state $3.2 billion in lost revenue over two years by 2025.

"You brung it, so you dance with it. That’s Texas talk, you know," Parker says regarding Abbott. "That’s what Abbott’s done, but we’re the ones having to dance with it … we didn’t want to be in the dance at all."

The state’s energy and environmental woes are deepening. Electricity bills have risen 35.4 percent on average over five years as utilities build expensive infrastructure. Bledsoe worries about air pollution from new gas plants, noting that data center demand could erase decades of air quality gains. Meanwhile, Parker objects to solar and wind farms built on farmland, and both groups oppose new transmission lines.

Data centers also strain water supplies. While they reuse water for cooling, their footprint comes largely from electricity use. Data centers in Texas consumed 25 billion gallons of water last year, around 0.4 percent of total use. By 2030, HARC estimates this could rise to 2.7 percent, with the University of Texas at Austin suggesting it could reach 9 percent by 2040 in certain communities.

Historically, Virginia had the most data centers, but it is running out of space. Despite having fewer planned projects (170 vs. 287 in Virginia), Texas leads in capacity (26GW vs. 13GW) as data centers move into rural areas.

Facing backlash, Abbott has shifted his stance. He directed the Public Utility Commission to make data center operators cover infrastructure costs, announced moratoriums on permits pending audits, and suggested supporting a repeal of the sales tax exemption.

The Data Center Coalition, representing hyperscalers like AWS, Microsoft, Google, and Meta, insists they are good neighbors, though they aren't endorsing candidates. Abbott's campaign argues that his standards ensure data centers pay for infrastructure and reduce costs for Texans. However, the NAACP sent a letter criticizing Abbott's moratoriums for not going far enough, as they only cover projects on the grid, leaving private power projects unregulated. Parker concludes these measures look like "an attempt to run out the clock before the election."

Abbott’s opponent, Gina Hinojosa, has gained traction by calling for a moratorium until the legislature passes more protections. Her populist message against Big Tech has resonated in moderate communities. However, her campaign has faced scrutiny regarding a major donor, the International Brotherhood of Electrical Workers, which formed an alliance with OpenAI and developers.

Republican candidate for Senate Ken Paxton is atoning for his past support of tax exemptions by investigating water use and aligning with Abbott's restrictions. Democrat James Talarico aims to stop data centers from raising utility bills and empower local communities, a stance that challenges the state's "Death Star" law which bars local regulations contradicting state law.

Reflecting on federal pressure, Cobb notes that the senator-elect needs to push back against President Trump's "Let them in" agenda. She observes that data center construction traffic continues to clog rural roads, worsening housing shortages and dropping property values, leading to a loss of local culture. "It’s not for nothing," Cobb says, emphasizing the depth of the community's distress.