For years, Texas told some of the richest companies in the world to come on down. Bring your data centers. Bring your artificial intelligence. Bring your billion-dollar projects. Texas would provide the business-friendly climate, the tax breaks, the land, the power, and the welcome mat.
Then Texans started asking inconvenient questions: Who is going to provide all that electricity? Who is going to provide the water? Who is going to build the transmission lines? Who pays when the infrastructure has to be expanded? And how many permanent jobs are Texans actually getting in return?
Suddenly Greg Abbott discovered the free market.
Texas has been handing qualifying data centers sales-tax exemptions that can last 10, 15, or even 20 years. Under the program, some projects can qualify while creating only 20 or 40 qualifying jobs, depending on the size of the facility.
Then came an even better question: was anybody checking whether the companies receiving those benefits were actually doing what they promised? The Texas Tribune reported that of 138 data centers receiving the tax break, only 20 had been audited. Six of those 20 were found out of compliance, and at least four had failed to create the required jobs. Texas had estimated that the exemptions could cost the state roughly $3.2 billion in sales-tax revenue over two years.
That is an interesting version of capitalism. The government gives a corporation a tax break worth millions, the corporation promises jobs, and the government sometimes does not bother to check whether the jobs ever appeared. Apparently that is called the free market in Austin. We will call it Greg Abbott, “Socialism for Corporations.”
Now Abbott says things have gone too far. He wants data centers to pay more of their own infrastructure costs. He wants more disclosure about electricity demand. He wants companies to conserve water. He has even talked about phasing out tax incentives he now considers outdated.
All of which raises an obvious question: why now?
One possible answer is that Texans finally began noticing what was happening. Data centers have become politically toxic in communities worried about electric rates, water supplies and the reliability of the Texas grid. What once made a wonderful ribbon-cutting ceremony is becoming something candidates have to explain to voters.
There is another fact worth mentioning. The Houston Chronicle reported that some of Abbott’s largest political donors have financial interests connected to the data-center boom. Among those identified were billionaire real-estate developer Ed Roski Jr., who gave Abbott $1 million, and energy executive Kelcy Warren, who contributed $500,000.
That does not prove Abbott changed a single policy because of a political contribution, and there is no public evidence proving a quid pro quo. But politics does not require voters to stop asking questions simply because nobody left a signed confession. The legitimate question is why billionaires and giant corporations were offered incentives before ordinary Texans were given protections against the costs those projects might impose.
The politics are becoming national as well. A pro-AI advocacy organization has announced a $50 million campaign aimed at defending data-center development and influencing the 2026 political debate. Companies do not spend $50 million explaining something to voters unless somebody has figured out that voters may be a problem.
That may be the most important development of all. Greg Abbott spent years helping sell Texas as the place where enormous corporations could build enormous data centers. Now Greg Abbott wants Texans to know he is the fellow who will protect them from enormous data centers.
Maybe he suddenly discovered the dangers to the electric grid and water supply. Maybe he suddenly reconsidered billions of dollars in corporate tax incentives. Or maybe Greg Abbott discovered something politicians have been discovering for several thousand years: the voters noticed.