Across Texas, Grassroots Resistance Meets the AI Data Center Boom
From Brazoria to the Panhandle, communities are uniting to protect their local resources and quality of life
By José Medina
With the rush to satisfy the Big Tech interests behind the artificial intelligence boom, AI data center projects have been popping up across Texas. But what would usually be a business-friendly greeting that data center developers might have expected has instead been met with a wall of grassroots resistance.
It has been a fast-moving situation, with scenes of strong Texan opposition playing out at county hearings, city councils, and state regulatory agencies.
Because there are no comprehensive statewide regulations for data centers, the scenes we’ve seen in recent months are likely to continue until at least January, when the Texas Legislature reconvenes and can take action.
But until then, the number of jurisdiction-by-jurisdiction fights against data centers can be difficult to keep track of. Here is a brief run-down of some of what’s been happening in Texas.
Brazoria County Refuses to Issue a Taxpayer-Funded Check
Earlier this month, the Brazoria County Commissioners Court delivered a 5-0 unanimous blow to Nightpeak Energy. The developer had requested a $10.5 million tax abatement to build the Old Ocean Datacenter, along with a 310-megawatt gas plant to power the energy-hungry facility.
Adrian Shelley, the Texas director of Public Citizen, hailed the move as a win for residents over corporate profits. By refusing to designate the proposed Nightpeak construction site as a reinvestment zone, which would make it eligible for the requested tax break, the county signaled that its taxpayers will not subsidize the AI boom.
San Marcos is ‘Never this United’
In February, after a marathon meeting that went until 2 AM, the San Marcos City Council voted 5-2 to reject a $1.5 billion data center proposal. Hundreds of residents packed city hall to voice concerns over the 200-acre project’s potentially catastrophic impact on the San Marcos River and the state’s electric grid.
“San Marcos is never this united,” a resident told Austin TV station KXAN the night of the city council vote.
The rejection proved that residents in this Central Texas community have little appetite for overlooking environmental and quality-of-life concerns in exchange for the industry’s flimsy economic development promises.
Hood and Hays Counties Are Willing To Pump the Brakes on Data Centers, but the State Won’t Let Them
Local leaders are increasingly looking for ways to hit a pause button that creates time to understand what data centers mean for local resources.
In Hays County, Judge Ruben Becerra has become a leading voice for a moratorium on high-volume industrial water use, a move directly aimed at curbing data centers and their thirst for the massive amounts of water usually needed to keep data center servers from overheating.
In Hood County, near Fort Worth, commissioners have seen similarly strong public support for a pause in data center development. If you watch recent county commissioners’ meetings, there is no question that county leaders and the community urgently want a moratorium, given that the community is already home to industrial sprawl, including power plants and bitcoin mining operations.
But both Hays and Hood counties were forced to back off, for now, with Hood narrowly defeating its proposed moratorium and Hays tabling its proposal. They did so reluctantly under the implied legal threat of a state senator who represents a district hundreds of miles from each county, arguing that the moratoriums would violate state law.
A Unanimous Rejection in College Station
In September 2025, the College Station City Council unanimously rejected a land sale to Priority Power Management. The proposed AI data center would have sat near schools and an assisted living facility. Residents successfully argued that the project was a misguided use of city resources that offered no walkable or commercial value to the community. At least one council member apologized for even entertaining the deal, stating, “We will absolutely deny this and take it off our radar.”
Local Leaders Should Take Note of the Panhandle’s Fermi Project
The industry’s financial viability took a massive hit to its credibility with the financial and legal troubles of Fermi Inc., also known as Project Matador. Promoted by high-profile figures such as former Gov. Rick Perry, the Amarillo-based project saw its stock price crater in late 2025.
The trouble started when the project’s anchor tenant backed out of a $150 million funding agreement. Now facing class-action lawsuits for allegedly misleading investors, Fermi serves as a warning sign for Texas cities. These projects are often speculative, financially unstable, a formula that could leave local communities holding the bag.
The Legislature Takes Baby Steps Toward Addressing Data Centers
The tide of opposition will soon reach the Capitol building in Austin. According to the Quorum Report, the Texas Legislature is considering creating a special committee to formally investigate the implications of data centers. This is a sign that lawmakers are starting to realize that the unlimited growth of data centers may directly conflict with the state’s goal of maintaining residential grid reliability. And in a state that sees brutal droughts and one of its major cities is facing a water crisis, a data center’s need for massive amounts of water is unlikely to get a warm reception in the districts lawmakers represent.
The Bottom Line
Between the financial stumbles of companies like Fermi and the vocal resistance from local grassroots movements and groups like Public Citizen, the message to Big Tech is clear: If you want to build in Texas, you can’t do it by raising everyone’s electricity bills and hogging the scarce water that this growing state can’t afford to lose.