Ken Paxton Rails Against AI Data Centers. His Portfolio Says Otherwise.
Texas Senate candidate Ken Paxton advocates against AI data center tax breaks and high electricity prices, despite his past vote for such breaks and current investments in related companies. His office also supported Sulphur Springs in a data center development and is delaying a legal opinion on a county's moratorium request. Governor Greg Abbott has also announced plans to require data centers to pay for their electrical infrastructure.
Texas Republican Senate candidate Ken Paxton is campaigning on a platform that includes cracking down on AI data centers' tax breaks and protecting consumers from high electricity prices. However, this stance contradicts his past actions as a state lawmaker, where he voted for significant data center tax exemptions after receiving 100,000 shares in Servergy, a tech firm that benefited from these breaks.
Despite his public position, Paxton, who is also the Texas Attorney General, holds mutual fund investments worth up to $6.8 million in data center and AI-related companies. His campaign has also received substantial contributions from tech interests. Critics, including Texas Democratic Senate candidate James Talarico, accuse Paxton of hypocrisy, highlighting his past legislative support for data center tax handouts and his inaction on community requests to block data center development. Paxton's office notably filed an amicus brief supporting the city of Sulphur Springs in its efforts to build a large data center and has delayed providing a legal opinion to a Texas county seeking to halt data center development.
Other Texas politicians, including Governor Greg Abbott, are also shifting their narrative amid rising anti-tech sentiment among voters. Abbott, who previously championed Texas as an AI development hub, recently announced a directive requiring data centers to pay for their electrical infrastructure. Paxton has publicly supported Abbott's proposed crackdown, including repealing sales tax exemptions. However, the 2013 tax breaks Paxton voted for as a state senator are now estimated to cost the state over $3 billion in lost sales tax revenue due to the growth of AI.
Paxton's connection to Servergy led to a 2016 SEC lawsuit, alleging he concealed stock compensation received for recruiting investors. While the SEC lawsuit against Paxton was dismissed in 2017, and felony securities fraud charges were dropped in 2024, his current financial disclosures show continued significant investments in companies like Broadcom, Nvidia, Apple, Microsoft, Amazon, Google, Meta, Prologis, and Equinix, all involved in data centers or AI. Furthermore, Texas faces challenges with data center water demands, with the state's water usage plan initially underestimating the impact, prompting the Texas Water Development Board to enhance data collection efforts.