AUSTIN, Texas — President Donald Trump is publicly criticizing Texas leadership over a recent statewide pause on data center approvals, calling the move a "mistake" that could cost the state a massive economic windfall.
According to an interview with Punchbowl News released late last week, Trump said he observed Texas taking a stance against data centers and believes the state is missing out on crucial investments. "When a community wants it, it means a lot of money is going to come into that community," Trump said in the interview, adding that data center development "could be bigger than oil."
The president's comments follow a direct order issued by Republican Governor Greg Abbott earlier in the week. According to the governor's office, Abbott ordered the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) to temporarily halt all pending data center interconnection requests.
State officials say the pause will remain in place until each proposed facility undergoes a comprehensive audit. According to the governor's directive, developers must disclose projected power and water use, cooling technologies, on-site power generation plans, and any taxpayer-funded incentives they are receiving before they can connect to the state's electric grid.
Abbott's office quickly defended the moratorium. In a statement released to The Texas Tribune, Andrew Mahaleris, a spokesperson for the governor, said the pause is necessary to protect grid reliability. Mahaleris noted that ERCOT is currently tracking a more than 500% increase in peak electricity demand, largely driven by large-scale technology projects.
According to the governor's office, less than 10% of proposed data centers had voluntarily responded to previous state requests to report their anticipated power and water consumption, prompting the mandatory audit. Mahaleris stated that "Texans must come first" and emphasized that unprecedented, unchecked growth could endanger grid stability.
The standoff highlights growing tension over the massive resource demands of the rapidly expanding technology and artificial intelligence sectors. According to state regulators, projects that fail to comply with the transparency and audit requirements will be denied connection to the primary Texas power grid.
