Full Breakdown
Texas Senate Race Heats Up Over Data Center Boom
8/25/2026, 8:03:37 AM
Core Conflict: Competing Data-Center Policies
The 2026 U.S. Senate contest in Texas centers on the state’s AI-data-center expansion. Republican Attorney General Ken Paxton has unveiled a four-point “Texas First Data Center Plan” that would bar Chinese technology in data centers, create criminal liability for centers that enable unsafe AI chatbots for children, co-sponsor the DATA Act introduced by Sen. Tom Cotton (R-Ark.), and reverse the state sales-tax exemption he helped pass in 2013, raising project costs.
Democratic nominee State Rep. James Talarico proposes repealing the exemption, requiring data centers to cover 100 % of grid-connection costs, mandating closed-loop water-recycling systems, and giving local governments veto power over new sites. The clash pits two candidates with divergent regulatory approaches to an industry that fuels the AI boom while straining Texas’s power grid and water supplies.
Background: Texas’s Data-Center Surge
Texas hosts more than 300 data centers, the second-largest concentration in the United States, with at least 200 additional projects in planning. The boom has driven utility-rate spikes, water-use concerns, and heightened noise and air-pollution in rural communities. Governor Greg Abbott directed the Public Utility Commission and the state grid operator to audit projects seeking grid connections, and his executive directive has halted roughly 1,800 data-center projects statewide.
Criticism & Opposition
Talarico’s team argues that Paxton’s plan is a “sad attempt to reverse course,” noting his prior support for the tax exemption that enabled the current expansion.
Verbatim Quotes
- “There’s no doubt in my mind that the United States will beat the Chinese Communist Party in the AI race,” — Ken Paxton, Texas Attorney General
- “What matters in elections is not in August, what matters in elections is November,” — Greg Abbott, Governor of Texas
Timeline
- May 19 2026 – Ken Paxton delivers remarks in McKinney, outlining his data-center agenda.
- March 27 2026 – Governor Greg Abbott speaks at the Conservative Political Action Conference in Dallas, reiterating his stance on data-center regulation.
Data & Statistics
- Texas houses more than 300 data centers, ranking second nationally.
- An analysis identified at least 200 additional projects in the pipeline.
- Abbott’s directive has “effectively frozen” approximately 1,800 projects pending compliance.
- A July poll reported that 70 % of registered Texas voters oppose a data center being built in their area.
What’s Next
The November 2026 election will decide which candidate’s framework becomes law. Paxton has pledged to co-sponsor the DATA Act and push for federal restrictions on Chinese technology in data centers. Talarico’s platform would enact state-level tax reforms, water-recycling mandates, and local-veto authority. Both candidates are courting voters wary of rising electricity bills, water usage, and the environmental impact of AI infrastructure. The race remains a statistical tie in recent polling, and the Cook Political Report has reclassified the contest as a toss-up, underscoring the high stakes for both parties in a traditionally Republican state.
