AUSTIN, Texas — President Donald Trump criticized Texas’ decision to pause approvals for new data centers, saying Friday that the move could cost the state economic opportunities as Gov. Greg Abbott’s administration reviews the industry’s demands on power and water resources.
“I think it’s a mistake,” Trump said in an interview with Punchbowl News released Friday. He said communities that welcome data centers could gain significant economic benefits from the projects.
Abbott ordered state agencies Monday to pause approvals for proposed data centers seeking connections to the Texas electric grid while officials conduct a comprehensive review of their power and water use, ownership, tax incentives and cooling systems.
The governor’s office defended the move Friday, saying fewer than 10% of data center companies had responded to state requests for information about their electricity and water consumption.
Abbott spokesperson Andrew Mahaleris said the Electric Reliability Council of Texas is tracking more than a 500% increase in peak electricity demand, which he said could threaten grid reliability.
“Texans must come first,” Mahaleris said.
Under Abbott’s order, state agencies must determine whether proposed projects could affect local communities and whether companies have taken steps to reduce those impacts. Projects that fail the state’s verification and audit requirements could be denied grid connections.
The pause comes as Texans in rural and unincorporated areas have raised concerns about the rapid expansion of data centers. Residents have cited potential impacts on water supplies, electricity costs, noise, light and air pollution.
Abbott previously promoted data center development as part of Texas’ effort to become a hub for artificial intelligence. In November, he described the state as an “epicenter of AI development” while announcing Google’s planned $40 billion investment in Texas, which includes data center facilities.
The debate has also become an issue in the 2026 governor’s race. Democratic candidate Gina Hinojosa has called for greater oversight of data centers and criticized Abbott’s pause as insufficient.
Trump said data centers could become an economic force comparable to the oil industry.
“For Texas to say no to data centers is a mistake in the sense that it could be bigger than oil,” Trump said.
