Paxton’s Crusade Against Data Centers Ignores What Makes Texas Great
Ross Marchand
August 31, 2026
This op-ed was originally published in The Houston Chronicle.
The Lone Star State has long stood out as a haven for innovation and a stark contrast to big-government states such as California and New York. If Texas Attorney General Ken Paxton gets his way, though, Texas may soon close the barn door on prosperity driven by free enterprise. According to an August 24 report by Fox News, Paxton “is rolling out his own plan to address what has become a political pressure point in Texas politics during this midterm cycle: how to add guardrails to the explosion of data centers across the state as voters’ concerns rise about skyrocketing power and water costs.”The plan appears little more than a pale imitation of Democratic gubernatorial nominee state Sen. James Talarico’s broadside against data centers. The plan would establish sweeping liability for data centers powering artificial intelligence chatbots that ostensibly harm children’s safety, mandate that data centers cover grid-related costs and embolden localities to obstruct data centers. Texas policymakers must reject these misguided policies to ensure innovation and prosperity for generations to come.
While Paxton claims his proposal “will protect our grid, our communities, and our children,” it will achieve exactly the opposite, destroying countless jobs in the process. Recent estimates show that data center build-outs have added more than 216,000 construction jobs since 2022 — not to mention hundreds of thousands of jobs related to the grid infrastructure and power generation that data centers require.
Data centers support the entire digital ecosystem, giving state residents access to everything from Google searches to Amazon Prime products to online banking. It’s little surprise then that, as NetChoice notes, “In 2024 alone, Texas’ data center industry contributed $66 billion to state GDP and $4.5 billion in state and local tax revenue, while supporting more than 428,000 jobs statewide, including nearly 104,000 direct jobs.”
Critics of data center deployment such as Paxton and Talarico want to ignore these astounding economic benefits and focus on misinformation. Paxton’s plan betrays a common misconception that data centers are guzzling up water and power, taking finite resources from state residents in the process. As noted in a recent analysis by Taxpayers Protection Alliance, the organization I direct, that is just not the case. In 2025, data centers accounted for just 0.3% of water consumption in Texas; the corresponding figure for electricity is 3%. And as more data centers come online, the projects are adopting technologies to cut down on resource use.
Paxton’s proposal would not save resources, but it would enrich trial lawyers through a cascade of litigation. By establishing vague liability standards around AI chatbot safety and granting local governments broad power to halt projects, the plan creates a giant legal gray zone. Plaintiffs’ attorneys will inevitably exploit these ambiguities to file class-action lawsuits and tort claims galore against facility operators, burying the tech industry in crippling legal fees. The end result will be less innovation, far fewer jobs, and the pockets of law firms being padded even more.
If state leaders are truly concerned about power grid strain and municipal water supplies, the solution lies in dynamic utility pricing and market-driven infrastructure upgrades, not a tidal wave of litigation. Forcing data center projects to navigate a minefield of municipal blockades and legal challenges will simply drive capital, high-paying engineering jobs and tax revenue out of Texas and into more business-friendly states, such as West Virginia.
To maintain its pro-business and pro-growth posture, Texas cannot afford to adopt the restrictive regulatory playbook of Talarico and other progressive tech detractors. Paxton must reject faux populism and instead double down on the free-market principles that made — and continue to make — the state a great place to live and do business. Embracing data centers and AI development will secure Texas’ position as a leader in technological innovation and a welcome contrast to broken blue states.