Abbott and Shapiro Restrict Data Centers After Courting $60 Billion

In November, Texas Gov. Greg Abbott sat beside Google chief executive Sundar Pichai at a data center in Midlothian as Google announced plans to invest $40 billion in data centers across the state. Abbott called Texas “the epicenter of AI development.”

Less than nine months later, Abbott paused advancement of some large data-center loads through part of ERCOT’s grid-connection process.

During their 2026 reelection campaigns, Abbott, a Republican seeking a fourth term, and Pennsylvania Gov. Josh Shapiro, a Democrat running for reelection, have imposed new restrictions on an industry they recently courted, including at Shapiro’s 2025 appearance with Amazon officials when the company announced plans to invest $20 billion in Pennsylvania data centers. Together with Google’s $40 billion Texas announcement in November, those plans totaled $60 billion in announced investment, not completed spending.

Texas slows the connection process

Abbott’s Aug. 3 directive did not ban construction across Texas. It paused advancement of large data-center loads through part of the Electric Reliability Council of Texas interconnection process while regulators verify the first group of projects.

At an Aug. 14 state regulatory meeting, officials said the wider ERCOT queue held more than 1,800 individual projects, about 90% of them data centers, representing more than 474 gigawatts of possible demand. The immediate audit covers roughly 250 to 300 projects in a group called Batch Zero, the first set of large-load projects waiting for ERCOT to study them, most of them data centers, with about 200 gigawatts of potential demand.

That Texas queue is not 1,800 approved or financeable data centers. Officials said many projects lack financing, customers committed to lease server space, or other prerequisites, and the inflated queue has made it difficult to forecast how much new demand will actually reach the grid.

ERCOT had already planned to verify those projects. Abbott moved verification ahead of the study and added disclosures covering power, water, tax support, ownership and community effects. “With the governor’s letter, what we’re really doing is moving that verification process now to the front of the line before we begin the interconnection study process,” said Chad Seely, ERCOT’s general counsel and senior vice president of regulatory policy.

Projects outside ERCOT, including those in El Paso, are beyond this particular pause. So are facilities bringing their own power and not seeking an ERCOT connection.

Gina Hinojosa, a Texas state representative and Abbott’s Democratic challenger, began campaigning on the issue after seeing rural opposition late in 2025. She traveled through the Texas Panhandle and released an ad in rural markets on Aug. 18 that blamed Abbott for higher electric bills. Hinojosa said safeguards should be written into law, rather than left to an executive directive and company promises.

Pennsylvania changes the permit path

On Aug. 18, 2026, at the state Capitol in Harrisburg, Shapiro signed Executive Order 2026-05 and described developers who push speculative proposals without local support as predatory.

The order removes all AI data-center proposals from Pennsylvania’s fast-track permitting program. It requires local approval before state permits can be issued, bars nondisclosure agreements for these projects and ties permit review and state tax incentives to commitments under Shapiro’s Governor’s Responsible Infrastructure Development requirements, known as GRID.

Those requirements make a developer responsible for the cost of new generation and grid equipment needed for its project. They also require disclosures about electricity and water use, early public meetings, local hiring plans and environmental protections. A project seeking state support must sign a legally enforceable agreement, and developers that decline the GRID terms face a slower review that begins only after all local approvals are secured and every required permit application has been found compliant.

The policy stops short of a blanket moratorium. A proposal with local approval and the required commitments can still advance.

Shapiro’s change also entered his reelection race. Pennsylvania state Treasurer Stacy Garrity, his Republican challenger, said he had “lit the fuse on the chaos we are seeing in community after community.” Shapiro pointed to more than 100 proposals reported across Pennsylvania in August 2026, many without adequate financing, power or an identified user. He contrasted them with the two Amazon projects he helped recruit.

The campaign test

An Annenberg Public Policy Center survey posted Aug. 11 found that 61% of U.S. adults opposed new data centers in their area, up 12 percentage points from the same survey program’s February and March result. The later survey covered 1,320 adult U.S. citizens from June 16 through July 19, 2026, with a margin of error of 3.5 percentage points.

Public opposition polling does not establish that data centers are independently moving votes. It measures views about local construction, not whether the issue caused anyone to change support for a candidate.

President Donald Trump, speaking at the White House on Aug. 19, described the employment and tax revenue from such facilities as enormous and said, “If I were a governor or a mayor, I would want that plant in my community.” Earlier in August, he called Texas’s shift “a mistake.” His administration has asked major AI companies to pledge that their projects will cover the power generation and grid upgrades they require.

Wisconsin offers an electoral failure case. Milwaukee County Executive David Crowley defeated Francesca Hong in the August Democratic primary after Hong made a one-year construction moratorium central to her campaign. Crowley supported local veto authority and tighter rules while maintaining that the facilities could bring economic benefits.

“We are trying to catch up to this narrative and it continues to grow by leaps and bounds,” said Dan Diorio, executive vice president of state policy and government affairs for the Data Center Coalition.

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Marcus Schuler

San Francisco

Editor-in-Chief and founder of Implicator.ai. Former ARD correspondent and senior broadcast journalist with 10+ years covering tech. Writes daily briefings on policy and market developments. Based in San Francisco. E-mail: editor@implicator.ai