Full Breakdown
Texas Senate Candidate Ken Paxton Unveils Data-Center Regulation Plan Amid Growing Backlash
8/25/2026, 10:25:03 PM
Core Event: Paxton Announces Four-Point “Texas First” Data-Center Plan
In late August, Texas Attorney General and Republican U.S. Senate candidate Ken Paxton released a four-point proposal to curb the rapid expansion of AI-supporting data centers. The plan, posted on X, calls for federal legislation to bar Chinese technology in U.S. data centers, criminal liability for facilities whose AI chatbots endanger children, co-sponsorship of the DATA Act (S. 3585), and state actions to repeal sales-tax exemptions, require closed-loop water cooling, and limit rural siting.
Background & Context: Boom, Backlash, and Political Stakes
Texas ranks second nationally for data-center construction, with 335 existing facilities and more than 248 in development. Public concern centers on electricity demand, water use, noise and limited local job creation. A recent Annenberg Public Policy Center survey showed 61 % of Americans oppose new data centers in their area.
Governor Greg Abbott has directed the Public Utility Commission of Texas and ERCOT to audit data-center interconnection requests, requiring disclosure of tax incentives, electricity consumption, water-cooling plans and community impact measures.
Data & Statistics
- ERCOT reported in June that interconnection requests totalled roughly 474,000 MW, about 90 % from data-center projects.
- The state comptroller projects the 2013 sales-tax exemption for qualifying data centers will cost Texas $3.2 billion in revenue over the next two years.
- Campaign finance filings show Paxton’s operation has received nearly $450,000 from data-center-affiliated donors, while his opponent James Talarico has raised more than $70 million, including about $10 million from LinkedIn co-founder Reid Hoffman.
- A Fox News poll in late July placed Talarico ahead 51 % to 48 %; the Cook Political Report rates the race a “toss-up,” and The Sabato Crystal Ball lists it as “leans Republican.”
Official Statements & Responses
Paxton framed the plan as a defense of Texans’ “grid, communities, and children” while positioning the state to outpace “Communist China” in the AI race. He pledged to back Abbott’s standards, including the repeal of sales-tax breaks and the requirement that data centers fund their own electricity infrastructure.
Former President Donald Trump expressed support for data-center development, calling Texas’s resistance a “mistake” and emphasizing the industry’s economic benefits.
Criticism & Opposition
Talarico’s campaign highlighted Paxton’s failure to act on requests from Hood County officials seeking a moratorium on local projects.
Conflicting Reports & Gaps
Assessments of the race’s competitiveness diverge: the Cook Political Report and Fox News poll describe it as a toss-up, while the Sabato Crystal Ball leans Republican. No definitive data exist on how Paxton’s proposed federal legislation would survive Senate debate, nor on the timeline for implementing Abbott’s audit directives. Specifics on the “closed-loop water systems” cited in the plan remain unspecified.
Verbatim Quote
- “My Texas First Data Center Plan will protect our grid, our communities, and our children while ensuring America beats Communist China in the AI race,” — Ken Paxton, Texas attorney
