Here’s what Trump said.
President Donald Trump is pushing back against Texas Gov. Greg Abbott after the Republican governor temporarily halted certain approvals for new data centers, creating an unusual disagreement between two of the GOP’s most influential leaders.
The dispute comes as Texas faces a massive surge in proposed artificial intelligence infrastructure that could bring billions of dollars in investment while placing new demands on the state’s electricity grid and water supply.
Trump believes Texas should seize the economic opportunity.
Abbott says protecting Texas residents and ensuring the state’s infrastructure can handle the explosive growth must come first.
The disagreement highlights a much bigger question facing communities across America as the AI boom accelerates: Are the economic benefits of massive data centers worth the potential costs to electricity, water and local infrastructure?
Trump Says Texas Is Making A Mistake
Trump addressed Abbott’s approach during an interview with Punchbowl News, arguing that Texas risks turning away valuable economic development.
“I saw Texas the other day sort of is against data centers,” Trump said. “I think it’s a mistake.”
Trump argued that communities willing to welcome data centers could receive substantial economic benefits from the investment flowing into artificial intelligence and cloud-computing infrastructure.
“When a community wants it, it means a lot of money is going to come into that community,” Trump said.
The president also made a striking prediction about just how important the industry could eventually become.
Trump described data centers as “tremendously important for the economics” and suggested they “could be bigger than oil” for Texas.
That’s a remarkable comparison in a state that has been synonymous with America’s oil and energy industry for generations.
But Abbott isn’t necessarily rejecting the AI revolution.
Instead, the Texas governor wants answers before allowing some of the largest proposed electricity users in the country to connect to the state’s power grid.
Abbott Orders Review Of New Texas Data Centers
Abbott announced that Texas would temporarily pause approvals involving proposed data centers seeking connections to the state electric grid while regulators conduct a comprehensive audit.
The review is expected to examine several important issues, including projected electricity consumption, water usage, cooling systems, tax incentives, ownership and plans for reducing the impact on surrounding communities.
Abbott has indicated that projects failing to satisfy state requirements should be denied connections to the Texas grid.
His office says the decision is ultimately about protecting Texans.
“Governor Abbott’s top priority is to protect Texans’ safety and quality of life and ensure the integrity of our power grid and water supply,” Abbott press secretary Andrew Mahaleris said.
And the numbers behind the governor’s concerns are enormous.
Texas Electricity Demand Could Skyrocket
According to Abbott’s office, the Electric Reliability Council of Texas, better known as ERCOT, is tracking a more than 500% increase in peak electricity demand.
Mahaleris warned that such extraordinary growth could put significant strain on the reliability and overall stability of Texas’ power grid.
For Texans who remember previous concerns surrounding grid reliability during periods of extreme weather, the prospect of dramatically higher electricity demand is likely to get attention.
Artificial intelligence requires enormous computing capacity.
That computing power is housed inside data centers containing vast numbers of servers operating around the clock. Keeping those systems running requires substantial electricity, while many facilities also rely on large amounts of water or other cooling systems to prevent equipment from overheating.
The concern isn’t simply how much electricity Texas uses today.
It’s how much these proposed projects could require in the years ahead.
Abbott’s Office Raises Another Major Concern
Texas officials say there is another problem: Data center operators aren’t always providing regulators with the information required under state law.
According to Abbott’s office, data centers are supposed to report information concerning their electricity and water usage.
Yet fewer than 10% have been complying with those requirements, according to the governor’s press secretary.
Abbott’s temporary pause is designed to give the Public Utility Commission of Texas and ERCOT the information they need to evaluate future projects.
“Simply put, Texans must come first,” Mahaleris said.
It’s an argument that could appeal to conservative voters who generally favor economic development but also believe companies receiving access to public infrastructure should follow state requirements.
AI Data Centers Could Transform Texas
The scale of the potential expansion is difficult to overstate.
Texas has become one of America’s hottest destinations for artificial intelligence and data center development.
ERCOT reportedly told Texas lawmakers in July that approximately 90% of the 474 gigawatts of large-load connection requests currently under review involve data center projects.
Abbott noted that this represents more than five times Texas’ record peak electricity demand within the ERCOT system.
Utility forecasts also show large-load requests potentially climbing from approximately 5 gigawatts in 2026 to more than 109 gigawatts by 2032.
For comparison, ERCOT’s all-time peak electricity demand has been approximately 85.5 gigawatts.
Those figures don’t mean every proposed data center will ultimately be constructed or consume all the requested electricity.
But they demonstrate the extraordinary scale of the AI infrastructure boom facing Texas.
Dallas-Fort Worth Emerges As Major AI Hub
North Texas is becoming one of the biggest destinations for these projects.
Oncor’s service territory, which includes much of the Dallas-Fort Worth region, accounts for a significant share of projected large-load growth.
Dallas, Collin, Denton, Tarrant and Ellis counties have become attractive locations for hyperscale data centers because they offer access to transmission infrastructure, fiber networks and available land.
Those advantages could bring enormous private investment into Texas communities.
They could also bring controversy.
The proposed $1.1 billion Fort Worth Data Center Project in the Veale Ranch area has faced questions from residents concerned about electricity consumption, water demand and infrastructure.
Fort Worth officials previously delayed consideration of a tax incentive package following public opposition.
Similar battles could soon appear in communities throughout Texas and across the United States.
Trump Sees A Massive Economic Opportunity
Trump is looking at the issue from another direction.
The president sees artificial intelligence infrastructure as a potentially transformative economic opportunity for American communities.
During an interview on Fox News’ “Night with Trace Gallagher,” Trump warned that communities rejecting AI development could be making a costly decision.
“Any community that turns down AI is making a big mistake because your taxes are going to go way down,” Trump said.
He also suggested homeowners could benefit.
“If you own a house, it’s going to be more valuable,” Trump said.
Trump went on to criticize what he sees as a growing movement against data center development.
“It’s almost like there’s a campaign against data centers,” he said.
The president’s message is straightforward: America is entering an AI-driven economic transformation, and communities that embrace the investment could reap the financial rewards.
Whether voters agree is another question.
Americans Are Growing More Concerned About Data Centers
Despite the potential economic benefits, public opposition to data centers appears to be increasing.
A July Emerson College poll found that 63% of U.S. voters opposed having an AI data center built in or near their community.
That’s a 21-percentage-point increase from when the question was asked in December 2025.
The numbers reveal an interesting divide.
Americans may want the United States to remain the global leader in artificial intelligence while still having serious reservations about placing enormous data centers near their own homes.
Those concerns often center on electricity demand, water consumption, traffic, noise, infrastructure and the industrial appearance of large facilities.
And for homeowners, there is another important question.
Could Data Centers Affect Home Values?
Trump has argued that data centers can benefit homeowners, but the long-term impact on property values is likely to depend heavily on location and circumstances.
Large technology investments can produce significant economic benefits.
Data centers can generate construction activity, expand local tax bases, create jobs and encourage additional development. Those effects could strengthen local economies and potentially support property values.
But the situation may be different for homeowners living immediately beside a massive facility.
Noise, traffic, transmission infrastructure, industrial development, water usage and changes to the surrounding landscape could make some properties less desirable.
There simply isn’t enough evidence yet to conclude that data centers will universally raise or lower home values.
The impact will likely vary considerably from one community to another.
Abbott Isn’t Rejecting Artificial Intelligence
Despite Trump’s criticism, Abbott’s action shouldn’t be confused with a statewide ban on AI data centers.
The governor has previously welcomed major technology investment into Texas.
In November, Abbott called Texas the “epicenter of AI development” while announcing Google’s planned $40 billion investment in cloud computing and artificial intelligence infrastructure across the state.
His current pause primarily involves proposed facilities seeking connections to the Texas electric grid.
Some projects capable of generating their own electricity may be able to operate through a different process.
The dispute therefore isn’t simply about being “for” or “against” artificial intelligence.
It’s about how quickly Texas should allow the industry to expand and what safeguards should be required along the way.
Trump And Abbott Face A Classic Conservative Debate
The disagreement between Trump and Abbott presents an unusual political dynamic because both men are prominent Republicans who generally favor American energy production, private investment and economic growth.
Trump is emphasizing the enormous economic opportunity created by artificial intelligence.
Abbott is emphasizing infrastructure reliability, resource management and accountability from companies seeking access to Texas’ electric grid.
Both positions touch on traditional conservative priorities.
Trump wants America to attract investment, create wealth and remain ahead of international competitors in the race for artificial intelligence.
Abbott wants Texas to grow without putting existing residents, taxpayers and critical infrastructure at unnecessary risk.
The debate may ultimately come down to finding a balance between the two.
America’s Data Center Boom Is Just Getting Started
Whatever happens in Texas, the larger transformation is already underway.
More than 1,500 new data centers are reportedly under development nationwide, according to figures cited by Pew Research Center.
Berkeley Research Group has provided an even larger estimate, reporting that approximately 3,000 data center projects are in various stages of development across the country.
Artificial intelligence, cloud computing and America’s increasingly digital economy will require enormous amounts of computing power.
That means more data centers.
It also means more demand for electricity, water, transmission infrastructure and available land.
Texas may simply be one of the first states forced to confront the tradeoffs on such an enormous scale.
Trump believes communities that welcome these projects could enjoy a major economic windfall.
Abbott believes Texas needs to make sure companies follow the rules and that the state’s electric grid and water resources can support the growth.
It’s a rare disagreement between two powerful Republicans — but it’s also a debate Americans across the country may soon be having in their own communities.
The question now is whether Texas can capture the enormous economic promise of the AI boom without asking ordinary Texans to shoulder too much of the cost.
