Politics

AI data center growth becomes central issue in Texas Senate race

Republican Ken Paxton and Democrat James Talarico clash over data center energy and water consumption while proposing regulatory curbs.

Updated Aug 24, 2026 · 10:27 UTC1 reports

The short version

Texas Attorney General Ken Paxton and state Senator James Talarico, competing in the state's Senate race, have both proposed plans to slow and regulate the expansion of AI data centers in Texas.
The candidates' proposals follow growing voter concerns regarding the massive power and water demands of data centers and their impact on utility costs.
Texas Governor Greg Abbott recently froze approximately 1,800 data center projects under a new directive requiring disclosures on resource consumption, community impact, and ownership.

Texas Attorney General Ken Paxton introduced a four-point plan to regulate data centers, which includes blocking Chinese technology from US infrastructure, imposing criminal liabilities if AI chatbots harm children, co-sponsoring federal legislation for independent power generation, and repealing certain state sales tax exemptions.[Fox News]
Democrat James Talarico's platform seeks to repeal state tax exemptions for data centers, mandate they pay 100% of grid connection costs, require closed-loop water recycling, and grant veto power to local governments.[Fox News]
Paxton previously voted in favor of data center sales tax exemptions as a state senator in 2013, a measure that helped spark the state's current data center boom.[Fox News]
The Talarico campaign criticized Paxton for receiving nearly $500,000 in campaign donations from data center-related political action committees.[Fox News]
Talarico's political operation received approximately $10 million from LinkedIn co-founder and data center advocate Reid Hoffman via the Lone Star Rising PAC.[Fox News]
Texas Governor Greg Abbott implemented a directive that has halted roughly 1,800 data center projects, requiring companies to disclose power and water usage, financial incentives, and ownership details.[Fox News]