How Big Tech And Abbott Made Texas The ‘epicenter’ Of Data Centers

HOUSTON — Texas Republican Gov. Greg Abbott has been cracking down on data centers for months, but less than a year ago his appointees and staffers were actively trying to bring projects to the state.

On Dec. 16, 2025, two days before Texas announced sweeping changes to expedite grid access to data centers, Abbott’s top staff held a closed-door meeting with representatives of the state’s largest tech and transmission companies, according to records obtained by POLITICO.

The documents show representatives from Google, OpenAI, Meta, Amazon Web Services and Nvidia were “confirmed” to meet with Abbott’s team, joined by Texas’ head electricity regulator and grid manager to discuss building out the state’s power grid. Also in the room, according to the records: officials with the state’s four main electric transmission companies— Oncor Electric, CenterPoint Energy, AEP Texas and Texas-New Mexico Power.

A person at the meeting, who was granted anonymity to speak freely about what happened, said the message from Abbott’s office was clear: We want data centers to come to Texas, and we want to work with the industry to remove roadblocks to make that happen.

“The point of that meeting really was to say, ‘We’re committed to fixing this and finding a better path forward,’” the person said.

That path was laid out by grid officials to the state’s utility regulators at an open meeting Dec. 18, 2025 — a framework that was largely similar to one proposed by Google and a Texas-based hyperscaler.

In the months that followed, the Electric Reliability Council of Texas and the state Public Utility Commission worked to write new rules and develop the new process to bring large power users — almost all of which are data centers — onto the state’s main power grid. The moves came as the Trump administration encouraged Texas leaders to support data center development and the growth of artificial intelligence.

But that momentum came to an abrupt halt as summer progressed and data centers became deeply unpopular in Texas and across the country, and as Abbott faces the most difficult reelection bid of his political career.

Abbott called on the PUC and the grid manager to clamp down on data centers in June as angry residents filled town halls across the state, calling for data center moratoriums and laws to give local governments more authority to regulate them.

Less than a week after a 15-hour long state Senate committee hearing saw hundreds of furious constituents roast the state for not doing more to slow the proliferation of data centers and proposed 765-kilovolt transmission lines, Abbott in early August ordered the PUC and ERCOT to pause data center grid connection approvals.

Those actions are a reversal from when Abbott called Texas the “epicenter” of AI development in a joint press conference with Google and Alphabet CEO Sundar Pichai in November 2025.

Abbott press secretary Andrew Mahaleris said in a statement last week that the December 2025 meeting between his staff and data center developers was meant to send a clear message: “Data centers must make immediate changes and put Texas residents and communities first.”

“As Texans’ concerns with these projects grew, Governor Abbott took decisive action to set clear guardrails that protect Texans,” Mahaleris said.

Still, more than 360 new data center projects could come online by sometime in 2032 — doubling the number of the tech campuses operating in the state and making Texas the global capital of data centers. And the state is working to finalize a $33 billion, ultra-high voltage transmission project that would help power the tech campuses from East Texas to the heart of the Permian Basin.

Democratic state Rep. Gina Hinojosa, who is challenging Abbott, said in a statement that the governor invited the data centers to Texas and fast-tracked their approvals after taking campaign contributions from their CEOs.

“This is the corrupt reality of Greg Abbott’s Texas: behind closed doors, he makes deals with data center executives without thinking twice about Texans,” Hinojosa said.

Business meeting

While governors must take positions on countless issues, Abbott’s staff is steeped in the power industry.

Chief of staff Robert Black formerly served as vice president of public affairs for ERCOT and was vice president of external affairs for AEP Texas.

Budget director Fisher Reynolds IV previously was chief of staff of the Lower Colorado River Authority, a nonprofit political subdivision that also builds transmission.

Black’s Outlook calendar records — obtained through an open records request — show that he, Reynolds, deputy chief of staff Toby Baker, policy director Cory Fish and policy adviser Jacquelyn Hill were scheduled to attend the meeting on Dec. 16, 2025.

Also on the list of confirmed attendees, the records show, were Texas Secretary of State Robert Howden, PUC Chair Thomas Gleeson and his chief of staff as well as PUC deputy executive director Barksdale English. ERCOT CEO Pablo Vegas and three other top ERCOT officials, plus two consultants from McKinsey & Co., were also on the list.

Abbott appointed both Howden and Gleeson, and the PUC oversees ERCOT.

Notably absent from the list of attendees were any officials from the Office of the Public Utility Counsel, a state agency tasked with representing residential and small business ratepayers’ interests.

Black’s calendar called the meeting a “transmission roundtable.”

The PUC did not respond to multiple requests for comment. ERCOT and the Office of Public Utility Counsel declined to comment for this story.

When asked about the Dec. 16, 2025, meeting, officials with AEP Texas and Meta said the employees listed as attending were no longer with their companies. Kerri Dunn, a spokesperson for Oncor, confirmed the company’s vice president of regulatory affairs attended.

“Our team members regularly meet with a variety of stakeholders, including state and local officials, regulators, customers, and others, as part of our efforts to continue providing safe and reliable electric service to Texans,” Dunn said via email.

The document does not say Abbott himself was at the meeting. His office did not respond to specific questions asking whether the governor was there or if he knew about the meeting.

The person who attended the meeting and later spoke with POLITICO said officials from the PUC, ERCOT and Abbott’s office sought to reassure data centers and other large electricity users.

Developers had been growing anxious about projects that were being delayed by ERCOT’s process of studying how to bring them onto the grid. The delays were so common that some developers worried the state was trying to prevent them from coming online, the person said.

“The messaging was basically ‘We know there’s this rumor about a moratorium to interconnect large loads — that’s not what is happening. Our prior processes don’t work, and we’re coming up with a solution that works,’” the person recalled.

The person said some people not listed on Black’s calendar also attended the meeting, including representatives from the Texas Oil & Gas Association and the Texas Chemistry Council. Neither organization responded to a request for comment.

Two days later, on Dec. 18, 2025, Vegas spoke at a PUC open meeting and unveiled a wholesale overhaul of how the state would look to bring large power users — almost all of which are data centers — onto the grid.

ERCOT had been studying the projects one at a time, Vegas said, and that had created issues where they would have to continuously restudy proposed projects as soon as another project sought to come online nearby. That resulted in delays in enabling the large power users to plug into the grid.

Instead, Vegas said at the PUC meeting, ERCOT would study data centers and large loads in groups, granting them all permission to come online in batches. He said ERCOT would finalize a process for bringing the first of those groups, known as Batch Zero, within the first quarter of 2026.

“We think timing is a really important part of this,” Vegas said. “There’s clearly a pressure to move quickly to support the economic growth that’s coming our way.”

The general framework laid out by Vegas bore several key similarities to a joint proposal filed by Google and Texas-based hyperscaler Lancium the same day, which included financial commitment requirements, classifying “large loads” as consuming 75 megawatts and up, and studying data center projects in groups rather than one at a time.

Google and Lancium declined to comment for this story. Unlike Google, Lancium was not listed as one of the participants at the Dec. 16, 2025, meeting.

Vegas has said Batch Zero will be granted all the spare power that exists on ERCOT’s grid between now and 2032. The rest would be granted more power as more transmission was built statewide to try to keep up with the demand.

That increased power demand is expected to be a boon for the state’s transmission monopolies, which earn a guaranteed rate of return for the electric poles and wires they build to serve large loads and the rest of the state.

And thanks to a 2023 law, ERCOT is now required to use the transmission companies’ demand forecasts for planning grid build-outs, rather than relying on the nonprofit grid manager’s in-house forecasts.

The Association of Electric Companies of Texas, a trade group for power companies in the state, did not respond to a request for comment.

White House visit

After Vegas announced planned changes in December, ERCOT saw interconnection requests from large power users skyrocket from 48 gigawatts in the fourth quarter of 2025 to 198 GW just in the first quarter of 2026.

By comparison, the all-time power demand record for ERCOT is roughly 91 GW, logged on July 22.

That wave of interest didn’t just catch the eye of Texas regulators — it made its way up to Washington.

When the Trump administration invited more than 100 Republican state lawmakers to the White House in March, Commerce Secretary Howard Lutnick and former National Energy Dominance Council senior director for power Peter Lake told them they needed to support the data centers coming to Texas, Republican state Reps. Wes Virdell and Brad Buckley told POLITICO in separate interviews.

Lake also served as chair of the PUC of Texas from April 2021 until June 2023.

Buckley said Lutnick and Lake underscored the White House’s message that data centers were necessary to help the U.S. defeat China in the AI arms race, and that building them out was in the interest of natural security.

“Peter Lake came in telling us we need to get on board with the data centers in Texas. I was shocked by all of that,” Virdell said in an interview. “I mentioned to Lutnick after this, I said you understand they’re building next to residential homes? He said, ‘Oh yeah, I heard that,’ and then wanted to move on.”

The Commerce Department did not respond to a request for comment on the meeting.

In a statement, Lake said powering data centers is “critical to America’s economic and national security.” He said actions like the Ratepayer Protection Pledge set a national standard for responsible development.

White House spokesperson Liz Huston said in a statement that President Donald Trump is focused on turning data centers into “engines of growth and opportunity” for communities across the country while cementing U.S. “dominance over China” in the AI race.

Data center developers may have begun flocking to Texas in the first quarter of this year for several reasons including an eagerness to participate in Batch Zero, said Anne Liu, a research lead with Aurora Energy Research.

“One of the attractive points for people looking at ERCOT is that it was so organized much earlier than the other [electricity] markets,” Liu said. “And the more ERCOT does, the more benefit it gives to the data centers that want to get connected.”

The batch study process and Batch Zero gave data center developers more certainty than they had in other power markets, Liu said, where regulators had made less progress in drafting processes and rules to bring projects online.

Eventually, ERCOT’s large load interconnection queue reached over 470 GW, 90% of which was made up of data center demand.

By March, Virdell, Buckley and other rural state lawmakers were already getting an earful from upset constituents who said data centers were popping up across their districts, and that local authorities had little ability to regulate them.

Texas laws largely prevent cities and counties from creating local ordinances that overstep state laws and prevent them from passing moratoriums on data centers and other sorts of development.

Without major local restrictions, especially in unincorporated counties, frustrated residents turned their attention from local elected officials to the state.

A state Senate Business and Commerce Committee hearing about data centers and a proposed $33 billion transmission program lasted 15 hours on July 29, most of which was dominated by rural landowners fuming over data centers and the 765-kV transmission lines that would ultimately help serve them.

Less than a week after that hearing, Abbott ordered the PUC and ERCOT to pause data center grid connection approvals until the two agencies could conduct an audit of the proposed projects.

In September, he ordered the Texas Water Development Board to compel data centers to report their water usage and ordered the TCEQ to stop giving data centers permits until ERCOT and the PUC could finish their audit.

That audit is expected to be finished by Dec. 10, a little more than a month after the midterm elections. The Texas Legislature’s regular session starts in January, and lawmakers are expected to take aim at tax incentives for data centers and rules around their operations.

But even as Abbott has taken actions against data centers, developers and tech companies have continued to support him.

A Texas Tribune analysis of campaign contributions found Abbott has raised about $4.9 million from donors with “direct ties” to data centers like company CEOs or their employees since July 2025. In addition, the outlet tracked $4.1 million in donations from people with indirect ties to data centers, like those that invest in data center companies.

About $2.8 million of the direct and indirect data center-related donations came after Abbott announced his data center pause, the Tribune found. Meanwhile, the nonprofit newsroom found Democratic rival Hinojosa logged one data center-related donation of $25,000 since July 2025.

Eduardo Leal, press secretary for Abbott’s campaign, called the Tribune’s report “a disingenuous attempt to manufacture controversy out of information that is not new.” He pointed to Abbott’s pause and his calls for ending “outdated” tax incentives for data centers as evidence of his stance.

“Data centers must pay their own way, protect Texas’ electric grid, bring their own water, and not disturb the communities where they operate,” Leal said.

Hinojosa said in a statement that Abbott’s pause is a farce.

“Data center approvals will be back up and running in December, because Abbott is bought and paid for by global data center corporations,” she said.

Abbott’s recent actions may not have swayed voters in rural Texas in areas like Virdell’s district.

The state lawmaker said he told Abbott’s chief of staff and other lawmakers a year ago that folks in his rural Hill Country district were turning on the state’s Republican leadership over data centers and 765-kV transmission lines.

“I think Abbott, once he saw the polling roughly five to six months after I told him he’s losing support in Hill Country over this stuff, he changed his tune,” Virdell said last week. “It’s very frustrating to give common sense to the folks in leadership, and for it to be completely ignored until polling shows I was correct.”