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Texas Pauses Data-Centre Approvals as AI Boom Tests Its Pro-Business Model

September 5, 2026 at 05:01 EDT

Infra & Chips
Sales & Business
Policy & Regulation

Texas has paused new data-centre approvals while state regulators audit projects seeking access to the electricity grid, putting the state’s decades-old business-friendly strategy under pressure from the infrastructure demands of artificial intelligence. Governor Greg Abbott ordered the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) to complete the review before projects can move forward. The governor’s directive cites more than 474 gigawatts of requests to connect to the Texas grid—over five times ERCOT’s record peak electricity demand.

September 2026 · Texas

The AI build-out meets Texas limits

New data-centre approvals are paused while projects seeking grid access undergo an audit of power, water, tax incentives and community impact.

>474 GW

Requests seeking Texas grid connections

57%

Voters opposing a centre locally

$2.9tn

Texas state economy

The queue is more than five times the grid’s peak demand

Peak demand

>5x

Connection requests

The queue measures requested capacity, not electricity already being consumed.

The opportunity

Texas offers land, energy and political support as companies expand AI infrastructure.

The friction

Residents and officials are questioning water use, grid reliability and who pays for new infrastructure.

What the audit tests

Can Texas keep attracting capital while making data centres carry more of their public costs?

The answer will shape the state’s next rules for power, water, tax incentives and grid access.

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