Regulation AI Minute Newsroom 2026-08-24

The governor who courted the AI build-out now says the industry "dug their own grave"

On ABC's "This Week" on Sunday 23 August, Texas governor Greg Abbott defended his pause on new data centre connections to the state grid and put the blame squarely on developers: they "basically dug their own grave for the problem that's been caused for them, and that's why they got the backlash they deserve." His complaint is that companies moved into communities without first securing local support. The pause itself came earlier in August, when Abbott ordered state regulators and ERCOT to stop approving new data centre grid connections pending an audit. The numbers behind it are startling: the interconnection queue holds roughly 474 gigawatts of requests, more than five times the record peak demand ever recorded on the Texas grid, and about 90 percent of the new requests come from data centres. The audit asks three questions of each project — whether it brings its own generation or leans on ERCOT, how much water it uses and whether it recycles it, and what state or local tax breaks it receives. ERCOT has pushed back its Batch Zero transmission planning study and aims to finish the audit by December. Abbott's press secretary said Texas law already requires data centres to report their power and water use, and fewer than 10 percent have complied. This is not a total ban: projects that generate their own power can bypass the grid queue entirely. President Trump called the pause "a mistake" on 7 August, telling Punchbowl News that saying no to data centres was an error because the business "could be bigger than oil." New York paused approvals in July.

Why it mattersTwo days ago we reported that three-quarters of Americans now say they do not want a data centre near them, up from an even split a year ago. This is what that number looks like when it reaches a statehouse. Texas is the place the industry chose precisely because it does not say no — a deregulated grid, cheap land, minimal zoning — so a Republican governor telling the sector its backlash is deserved is a real change in the political weather, and one that outranks any technical constraint on how fast compute gets built. Note carefully who the pause does not stop. Projects that bring their own generation walk past the queue, which is exactly why every large operator has spent this year signing gas, nuclear and behind-the-meter power deals. The binding constraint on AI has quietly moved from chips to electrons to permission, and permission is granted locally.

✓ Verified · 4 sources

The governor who courted the AI build-out now says the industry "dug their own grave"

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