Power Pause: Abbott’s Data Center Freeze Slows Texas Dealmaking
Texas Gov. Greg Abbott’s pause on data center grid connections and permits is slowing dealmaking and causing investors to reassess power infrastructure commitments. The pause comes as Texas M&A activity declined in the third quarter amid broader economic and geopolitical uncertainty.
Texas M&A activity declined in both volume and value during the third quarter, with dealmakers identifying Gov. Greg Abbott’s pause on data center grid connections and permits as one contributing factor. The policy has added uncertainty to transactions tied to artificial intelligence, data centers and related infrastructure.
Some investors are using the pause to evaluate whether major investments in power infrastructure will generate sufficient returns, including projects with behind-the-meter electricity supplies. The article also cites other potential causes for weaker deal activity, including the approaching election, higher bond yields, inflation concerns, geopolitical instability and rising borrowing costs.