Ken Paxton Unveils Plan to Regulate Texas Data Centers

Texas Attorney General and U.S. Senate candidate Ken Paxton released a four-point plan on August 24, 2026, to regulate the state's expanding data center industry. The proposal includes federal legislation to ban Chinese technology in critical infrastructure, the creation of criminal liability for companies if AI chatbots endanger children, and the co-sponsorship of the DATA Act to allow facilities to generate electricity independently. At the state level, Paxton advocates for repealing sales tax exemptions for data centers.

This initiative aligns with actions by Governor Greg Abbott, who issued a statewide moratorium on August 3 that halts data center connections to the power grid pending audits by the Electric Reliability Council of Texas. Abbott has also proposed banning new facilities in rural neighborhoods. Local governments are pursuing similar restrictions; the San Antonio City Council is considering a six-month moratorium and new zoning laws requiring 500-foot setbacks from residential areas and schools.

Democratic opponents, including State Representative James Talarico, have criticized Paxton's plan as hypocritical, noting that he previously supported the tax exemptions he now seeks to repeal. Meanwhile, President Donald Trump has characterized Texas's resistance to the industry as a mistake, arguing that such facilities bring significant investment to communities.