The mass opposition to the ongoing data center build out in the US is now reaching a crescendo, with Texas Governor reportedly halting around 1,800 data center projects in the state pending a comprehensive audit, and a high-profile GOP committee issuing a clarion call on its electoral prospects in Ohio.
While Texas Governor Greg Abbott paused the entirety of the state's data center-related pipeline in early August, the sheer scale of the move is only now becoming apparent, with reports pegging the total number of affected projects at around 1,800.
Even so, the move will likely only act as temporary dampener on data center-related momentum. First, many of the projects that fall under the so-called Batch Zero - comprising between 250 and 300 data centers that are at an advanced stage of construction - have already furnished the requisite studies and signed agreements related to financial arrangements and site control.
Critically, these projects can continue their construction work even as the Electric Reliability Council of Texas (ERCOT) investigates the quantum of subsidies that they are receiving and the impact of the build out on each site's neighbors.
What's more, many of these Batch Zero projects can proceed with energizing their buildings once given an all-clear signal by ERCOT, but that requires data center developers to show that they will pay for their own electrical infrastructure, reuse their water, protect local neighborhoods, and not spike electricity bills for normal Texas families. Any project that fails the audit will be denied a grid connection.
The order also bring smaller projects under concerted scrutiny when previously these projects would have evaded much of the red tape, at least for the time being. Of course, the move was a necessity, especially as Texas' power queue has ballooned to 474 gigawatts, which is 5x the state's all-time peak record.
What's more, around 90 percent of the power requests have come from data center developers. This becomes all the more critical when you realize that Texas is largely independent of the interstate grid and generates its own power.
Meanwhile, Axios is now reporting that the National Republican Senatorial Committee has allegedly sent a private memo to AI companies, warning that the growing national resistance to data centers is now dimming GOP's prospects in key battleground states such as Ohio.
The memo reportedly states that if Senator Jon Husted (R-Ohio) "loses and data centers get the blame, politicians across the country will take notice — and they will not go near the next one," going on to note that "this has become a sleeper issue for the entire election cycle."
Notwithstanding the GOP's consternations, this issue is now becoming a bipartisan headache, with Pennsylvania Governor Josh Shapiro (D) imposing strict guardrails on data center projects just this week.
Do note that the US already has around 4,000 data centers, with another 3,000 or so in various stages of construction.
Finally, we reported recently that some data center developers are now instituting clauses within their contracts with fiber network operators, precluding any fiber off-ramp to rural towns that lie on the route. These developers are also apparently prohibiting their contractors from installing shadow conduits that could eventually fiberize these underserved communities.
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