Texas Attorney General Ken Paxton and Democratic nominee State Sen. James Talarico are racing to unveil competing plans to address the explosion of data centers across the Lone Star State, as voters' concerns rise about skyrocketing power and water costs. The high-stakes Senate contest for the seat being vacated by Sen. John Cornyn has turned the issue into a central battleground in Texas politics.

The debate centers on how to balance the AI industry's rapid growth with its enormous appetite for electricity and water, particularly as data centers consume resources that some communities say are driving up costs for residents and straining local infrastructure.

What the Left Is Saying

Talarico has made data center accountability a centerpiece of his campaign, holding bipartisan roundtables on the issue. His plan calls for repealing state tax exemptions for data centers, mandating that data centers cover 100% of grid connection costs themselves, and requiring closed-loop water recycling systems to reduce strain on municipal supplies.

"Texans can't afford Ken Paxton's corruption," said JT Ennis, a Talarico campaign spokesperson. "While Ken Paxton funnels data center money into his campaign, James is fighting to hold data centers accountable."

Talarico's campaign has highlighted that Paxton received nearly $500,000 in donations from political action committees connected to data center companies. The campaign argues this creates a conflict of interest and points to Hood County residents who say Paxton's office ignored their concerns about a proposed data center development in their community.

The Talarico plan would also grant local governments veto power over new data center projects, returning decision-making authority to communities rather than state officials or industry interests.

What the Right Is Saying

Paxton released his own four-point plan first obtained by Fox News Digital, which he says will ensure Texas leads in the AI race while protecting residents. "There's no doubt in my mind that the United States will beat the Chinese Communist Party in the AI race," Paxton said. "This plan will ensure that happens while putting Texas First, protecting our culture and land, and safeguarding our families and communities."

Paxton's plan calls for federal legislation to prevent Chinese technology from powering data centers or being used in American infrastructure, creating criminal liabilities for companies whose AI platforms undermine children's safety, and co-sponsoring the DATA Act alongside Sen. Tom Cotton, R-Ark., which would allow data centers to generate their own independent power.

The Republican nominee also wants to undo sales tax exemptions for data centers, a notable reversal from his 2013 vote as a freshman state senator when he supported 100% sales tax exemptions that helped spark the current boom. "While James Talarico and his campaign infrastructure accept millions of dollars from data center-affiliated donors and put their interests first, I will lead with Texans at the forefront," Paxton said.

Paxton's campaign has pointed out that Talarico's Lone Star Rising PAC has received approximately $10 million from LinkedIn co-founder Reid Hoffman, an advocate for AI development who has argued about the strategic value of data centers in competing against China.

What the Numbers Show

Abbott's new directive, unveiled earlier this month, requires data centers to disclose power usage, water consumption, financial incentives received, impact reduction plans, and documented ownership. Abbott claimed this week that the directive had halted roughly 1,800 data center projects across Texas.

The 2013 sales tax exemption Paxton supported required a $200 million ground-floor investment threshold and employment requirements to qualify, helping fuel the current explosion of facilities across the state.

Talarico has received approximately $10 million from Hoffman's Lone Star Rising PAC. Paxton's campaign donations from data center-connected PACs total approximately $500,000, according to figures provided by both campaigns.

The DATA Act that Paxton would co-sponsor would create a new federal category allowing data centers to operate independent power generation separate from existing grid infrastructure, a significant regulatory shift in how these facilities are classified and regulated.

The Bottom Line

Both candidates have staked out positions that acknowledge voter concerns about the rapid expansion of AI infrastructure, though through different approaches. Paxton emphasizes national security and preventing Chinese influence while supporting Abbott's state-level disclosure framework. Talarico focuses on local control and requiring industry to bear more of its own costs.

The race has also exposed unusual financial connections on both sides, with each campaign highlighting the other's ties to data center interests. The outcome could shape how Texas, a major technology hub, balances economic growth against resource constraints that are increasingly visible to voters in affected communities.

Abbott's directive and the candidates' competing proposals will likely face legal and legislative challenges regardless of who wins the Senate seat. Observers say the debate reflects broader national tensions over AI infrastructure and its footprint on local resources.