Texas Gov. Greg Abbott is calling for a ban on new artificial intelligence data centers in rural Texas neighborhoods and wants to eliminate tax incentives for the industry, marking a significant shift from his previous efforts to position Texas as a global leader in AI infrastructure.

Speaking during a property tax event in Bullard, East Texas, Abbott said any future AI developments should be “Pushing back on these AI data centers that are trying to build in our neighborhoods. I’ve made it clear already, any AI data center thinking about coming here, they have to bring their own money, bring their own power, use their own water, and do it in a way that reduces the cost of electricity for residents across our state. We must prohibit them from building AI data centers in rural Texas neighborhoods. We must eliminate the tax break they are getting,” Abbott said, per Fox 4 KDFW.

Abbott Expands Push for New Regulations

The proposal expands on a regulatory framework Abbott Abbott has also called for eliminating tax incentives currently available to data center developers and requiring projects to finance their own infrastructure rather than relying on public subsidies.

Shift From Earlier Support for AI Growth

Abbott’s latest comments represent a notable change in tone from late last year, when he enthusiastically “Google is now going to have a larger AI data center footprint, more so than any other state and as I understand it, more than any other country in the entire world. Texas will be the centerpiece for AI data centers for Google in the entire world,” Abbott Texas has become a major destination for AI-related development, with projections showing the state on pace to become the nation’s leading market for AI data centers.

Local Opposition Continues to Grow

At the same time, opposition has grown in communities where large-scale facilities have been proposed. Residents have raised concerns about increased electricity demand, water consumption, noise, and the limited number of permanent jobs created by the facilities. Public meetings in cities including Fort Worth and Wilmer have drawn residents urging local officials to restrict new developments.

According to a June survey by the University of Texas’ Texas Politics Project, 56% of Texans oppose data center construction in their communities, while 29% support it.

Political analyst Mark Jones of Rice University said the issue reflects a growing divide between support for AI technology and resistance to nearby infrastructure.

“Well, it’s a mixed issue. So, Texans actually like the benefits of data centers in terms of ChatGPT and their ability to do things online. On the other hand, it is a not-in-my-backyard situation where they don’t want a data center very close to them,” Jones said, according to Fox 4.

And also, as you get into rural areas, what is meant by close becomes essentially a broader definition and people are increasingly worried about data centers using water, using electricity, and creating noise without providing much in the way of jobs,” he added.

Legislative Action May Follow

Some local governments have already attempted to Jones said he expects Abbott to push lawmakers during the 2027 legislative session to give counties additional authority over agreements involving data center developments.