Texas hits pause on new data-centre approvals amid AI grid crunch
What's the deal? Texas — pitched by Governor Greg Abbott as the “epicentre of AI development” after Google’s Sundar Pichai flagged a $40bn state investment — has halted new data-centre approvals pending an audit of grid-connection suitability, the Financial Times reports. Developers say the freeze plunges the country’s busiest AI-infra build-out market into uncertainty.
Why now? Texas has more capacity under construction than any other US state, with more than $100bn raised for build-outs since 2024 (Infralogic). Landmark projects in the crosshairs include Oracle’s >1GW Stargate campus in Abilene (tied to a $300bn OpenAI contract) and Meta’s ~$12bn El Paso financing.
- July’s Batch Zero regime already required $50,000/MW security deposits; loads ≥75MW had expected ERCOT assessment and megawatt allocation by April 2027 — Abbott’s August audit has cast doubt on that timeline.
- Baker Botts’ Juliana Sersen called the audit “total chaos” and another filter for banks; the Data Center Coalition says “billions of dollars… and hundreds of thousands of jobs” are on the line and urges distinguishing speculative from committed projects.
- Generate Capital’s Logan Goldie-Scot says developers are shifting toward off-grid or battery-backed flexible connections because “speed to power” is economically decisive.
Caveats / inference: Investor pullback also reflects debt piles and uncertain developer profitability — not only the audit. Crow Holdings’ Michael Levy argues some delay is inevitable at this scale; rural Republican backlash is political as well as technical. The FT piece is reporting, not a final ERCOT rule rewrite.
The signal: Political and grid risk are now biting the largest US AI-infrastructure market — a concrete permitting/power bottleneck for hyperscalers and private data-centre financiers, complementary to the ratepayer and community-benefits fights elsewhere.
Source: Financial Times — Texas puts a brake on its data centre boom (13 Sep 2026).
