AI data center withdraws East Texas plan after Abbott’s directive

A data center developer has abandoned a planned AI data center project in East Texas, specifically near Cedar Creek Lake in Henderson County. This withdrawal follows new regulations and a directive from Governor Greg Abbott, who has taken a tougher stance on data center development in rural areas and emphasized the need for responsible stewardship of natural resources. Governor Abbott has publicly praised the developer's decision, stating their plans did not meet the higher standards he believes should guide such projects.

The cancellation occurs amidst a growing bipartisan backlash in Texas against the proliferation of AI data centers, which are raising concerns about their impact on the state's power grids, water supplies, and land use. State Representative Gina Hinojosa, a Democratic gubernatorial candidate, has advocated for a pause on all AI data center projects until better regulations are in place. Republican Texas Agriculture Commissioner Sid Miller echoed these sentiments, urging Governor Abbott to call a special legislative session to address the issue. Data center developers, however, argue their facilities minimize resource strain and bring economic benefits.

Texas is among over 20 states that have signed President Donald Trump's ratepayer protection pledge, aimed at stabilizing utility costs amid increased data center construction. A Texas Senate committee is scheduled to hold a hearing to explore regulatory options for the industry. Governor Greg Abbott has committed to working with state lawmakers to develop new rules governing future data center developments during the regular legislative session beginning in January.