People protest data center development outside the Austin Marriott Downtown on Wednesday, September 2, 2026.
Jay Janner | Austin American Politician | Getty Images
Texas Gov. Greg Abbott on Monday ordered the state’s environmental regulators to suspend all data center-related permits until the Electric Reliability Council of Texas completes an audit of the existing waiting list of data centers being considered for connection to the state’s power grid.
The audit was originally ordered by the governor’s office in August, when Abbott also imposed a moratorium on new data center grid approvals. This order expands the moratorium on environmental approvals through the Texas Commission on Environmental Quality.
Texas was on track to overtake Virginia as the state with the world’s largest data center market by the end of 2010, according to a February report from JLL, but Mr. Abbott’s order Monday could slow that progress.
Last month, BloombergNEF analysts found that the Texas moratorium would put “nearly 20% of the U.S.’s 253 gigawatt data center pipeline” at risk, or nearly 50 gigawatts of proposed data center capacity. This could cost data centers more than $8 billion in revenue by the first quarter of 2027.
Local opposition delayed or canceled $68 billion in new data center development last quarter, according to a report by advocacy group Data Center Watch, and that risk is spilling over into financial markets.
Anthropic’s long-awaited IPO will include negative public opinion toward AI and data centers as a risk factor in its upcoming prospectus.
Data center expansion is a top issue in the 2026 midterm elections, with a recent NBC News poll finding that 64% of Americans are less likely to vote for a candidate who “supports building local data centers.”
Mr. Abbott, who is vying for a fourth term against state Rep. Gina Hinojosa, has found himself at the center of a particular firestorm. Mr. Abbott was forced to reverse his claim that Texas would become a “center of AI development” in 2025, citing sales tax exemptions for eligible data centers and high-profile projects like OpenAI’s Stargate.
“During the next legislative session, Governor Abbott will work with the Legislature to eliminate financial incentives for data centers,” a press release announcing the moratorium states.
TCEQ plans to provide an update to the Governor’s Office on compliance with this directive by October 19.
