Abbott Halts New Texas Data Center Approvals as $100 Billion Build-Out Strains Grid
Updated
Updated · Financial Times · Sep 13
Abbott Halts New Texas Data Center Approvals as $100 Billion Build-Out Strains Grid
3 articles · Updated · Financial Times · Sep 13
Summary
Texas has frozen new data center approvals while Governor Greg Abbott’s audit reviews whether large projects can safely connect to the power grid, disrupting a state that had led the US build-out.
$100 billion has been raised for Texas data centers since 2024, but developers seeking 75MW or more now face an uncertain timeline after expecting ERCOT assessments in coming months and power allocations by April 2027.
$50,000 per megawatt security deposits under the state’s new Batch Zero regime had already tightened entry, and lawyers and investors say Abbott’s audit adds another financing filter that could delay or kill projects.
Rural voter backlash has turned the AI boom into a midterm issue for Texas Republicans, with residents complaining data centers siphon local resources and saddle taxpayers with the burden.
Developers are now reworking plans toward off-grid power or flexible grid connections backed by batteries, underscoring how Texas’s former 'golden goose' status has become far less certain.
Will the strict new audit kill off speculative AI projects in Texas, or simply force developers to build their own off-grid power empires?
With Texas freezing massive AI data centers over grid fears, could this multi-billion-dollar pause derail the rapid expansion of artificial intelligence?
As 474 gigawatts of power requests flood ERCOT, who will ultimately pay the price for the infrastructure to support these massive tech campuses?