In June, Governor Greg Abbott issued his first set of regulatory recommendations aimed at curbing the rapid expansion of data‑center facilities across Texas. The governor’s proposal calls for ending a major tax incentive that has long attracted large‑scale data‑center developers and for requiring facilities to fund their own water and electricity needs.
Industry donors respond with cash
Donors with direct or indirect ties to the data‑center sector quickly responded. In June, they contributed $1.5 million to Abbott’s campaign. Two months later, after Abbott paused approvals for new data‑center connections to the state grid pending a statewide audit, the industry gave an additional $2.8 million – the largest monthly haul recorded for the governor during this election cycle.
Since July 2025, the total amount raised from data‑center‑related donors stands at about $9 million, roughly 13 % of all contributions Abbott has received in that period.
Who is giving?
More than half of the $9 million – about $4.9 million – came from individuals and companies that develop, own, or operate data‑center facilities. Notable contributors include Rhett Bennett, CEO of Black Mountain, a Fort Worth‑based energy firm building hyperscale data centers, which together with his company gave $1 million. Former Fermi America CEO Toby Neugebauer contributed $100,000.
The remaining $4.1 million originated from donors with indirect data‑center connections, such as investors in AI‑related firms or companies that provide services to data‑center operators. GOP megadonor Jeff Yass, known for his school‑voucher advocacy, and Edward Roski Jr., president of Majestic Realty Corp., each gave $1 million through their investment holdings.
High‑profile names
The Tribune identified Airbnb co‑founder Joe Gebbia as the single largest data‑center‑related donor, contributing $1.5 million. Gebbia also serves on the board of Tesla, which operates its own data‑center facilities. Other prominent donors include Elon Musk, who gave $500,000, and Harlan Crow, a long‑time Abbott supporter, who contributed $250,000 and whose firm announced a new data‑center campus in Dallas.
Political context
Abbott’s tightening of data‑center approvals comes as public sentiment toward the industry has soured. The governor’s campaign spokesman Eduardo Leal said the governor’s stance is clear: data‑centers must pay for their own infrastructure, protect the electric grid, and respect local communities. Leal also defended the Tribune’s reporting, calling it a “disingenuous attempt to manufacture controversy.”
Democratic challenger Gina Hinojosa has made the data‑center issue a centerpiece of her campaign, accusing Abbott of inviting the industry with “the richest tax breaks in the country” and of taking millions in donations from the same interests. Hinojosa’s own data‑center‑related fundraising totals just $25,000, less than 1 % of her overall contributions.
Implications for Texas policy
Analysts say the governor’s regulatory push could reshape the industry’s relationship with state government. Jim Henson, director of the Texas Politics Project at the University of Texas, noted that data‑center operators are likely to continue supporting Abbott financially to stay at the negotiating table.
Down‑ballot, other Republican candidates have also benefited from data‑center‑linked donations. Lieutenant Governor Dan Patrick received more than $1.6 million, primarily from donors with indirect ties to the sector.
What’s next?
Abbott’s recommendations will be reviewed by the Legislature, and the governor has directed state agencies to halt any new data‑center permits until the Electric Reliability Council of Texas (ERCOT) completes its review. The governor’s call to end outdated taxpayer‑funded incentives aligns with his broader pro‑business agenda while seeking to protect Texas communities and the electric grid.
Voters will see how this balance of industry support and regulatory action plays out as the 2026 midterm election approaches.
Original reporting: Texas Tribune (HLL/CB) — read the source article.
