Data center developers are starting to look at other states as Texas Governor Greg Abbott slows construction, Bloomberg reported in an exclusive on 29 October 2026. Utah and Georgia come up in conversation and Iowa is also seen as an alternative destination for their projects, according to people familiar with the matter cited by Bloomberg.
Abbott directed the state’s environmental regulator to halt all permits sought by data centers on 21 September 2026. By our arithmetic, Texas voters go to the polls on 3 November, 43 days after that order.
Short explainer · Texas data center permits
A vertical news Short narrated from the published headlines and opening lines of this piece and two related FourWeekMBA pieces.
Business Pill · Grid Cost Allocation
An evergreen Business Engineer explainer on grid cost allocation: who pays for new power lines. It explains the general idea only and does not discuss Texas or this report.
The key insight: Bloomberg reports developers are starting to look at Utah, Georgia and Iowa as Abbott slows Texas data centers; his 21 September order halts state permits for data centers until ERCOT finishes its audit, 43 days before the 3 November vote by our arithmetic.
Bloomberg’s report, by Shruti Singh, Nic Querolo, Joe Lovinger and Michelle Cheng, opens: “Texas Governor Greg Abbott’s efforts to slow down data center construction, just as voters head to the ballot box, are starting to work”.
It says developers are starting to look elsewhere “following the governor’s sudden pivot from data center champion to skeptic”. We could read only the first two paragraphs; the rest of the article is behind Bloomberg’s paywall, so the projects and companies it may name are not given here.
Share of US data centers: 56% of operating data centers are in blue states, while 66% of planned data centers are in red states, 92% excluding Virginia. Source: Steve Rattner on X, as cited by Yahoo Finance, 28 October 2026.
What Abbott Ordered
The governor’s office said on 21 September that Abbott directed the Texas Commission on Environmental Quality (TCEQ) “to halt all permits sought by data centers until the Electric Reliability Council of Texas (ERCOT) completes its audit”. The release adds that “no state agency shall move forward with regulatory approvals related to data center development until it is acquired”.
“Simply put, Texans must come first”, Abbott said in the release. “Data centers must pay their own way, protect our grid and water, and complete the ERCOT and TWDB audits”.
The release lists the conditions: data center projects “must cover all electrical infrastructure costs, result in lower residential electrical bills, and complete the ERCOT audit”. It says that on 14 September Abbott directed the Texas Water Development Board to compel data centers to comply with water-use reporting requirements, and that next session he “will work with the Legislature to eliminate any financial incentives for data centers”.
The Election Around It
Yahoo Finance reported on 28 October that Abbott, a Republican, is running against Gina Hinojosa, a Democratic state lawmaker. “Governor Abbott a year ago was very supportive of data centers”, Darrell West, a senior fellow at the Brookings Institution, told Yahoo Finance. Fortune wrote on 25 October that Abbott has turned from a data center booster to a skeptic as he faces a tough re-election race.
Yahoo Finance also cites Democratic strategist Steve Rattner, who posted on X that 56% of currently operating data centers are in blue states while 66% of planned data centers are in red states, and 92% when Virginia is excluded.
Reuters reported on 22 October that investors are watching at least half a dozen states, including Texas, for which party wins the governor’s seat or the legislature, and that Morgan Stanley strategists are monitoring the governor races in Texas, Ohio, Pennsylvania, Georgia, Nevada, Wisconsin and Michigan.
A Reuters/Ipsos poll cited in that report showed 69% of Democratic registered voters back limits on building data centers, compared with 43% of Republicans, a gap of 26 points by our arithmetic. BNY Wealth senior equity analyst Kevin Shea told Reuters that policy uncertainty around data centers is unlikely to “derail” the AI investment theme.
Registered voters who back limits on building data centers: Democrats 69%, Republicans 43%; the 26-point gap is our arithmetic. Source: Reuters/Ipsos poll, as reported by Reuters, 22 Oct 2026.
Our 24 October piece on the air-permit freeze reported SemiAnalysis’s count of six Texas campuses, 8.7GW in all, that plan their own on-site power and need air permits while the freeze is in force.
As we read the governor’s release, the halt has no end date: it runs until the ERCOT audit is complete, and it ties approvals to conditions on grid costs, residential bills and water use.
As we read Bloomberg’s opening, the report is about where projects go next: developers are weighing Utah, Georgia and Iowa, according to people familiar with the matter.
As we read the Reuters/Ipsos figures, support for limits is a majority among Democrats, at 69%, and 43% among Republicans, a 26-point gap by our arithmetic.
Greg Abbott, Governor of Texas, 21 September 2026
“Data centers must pay their own way, protect our grid and water, and complete the ERCOT and TWDB audits.”
Three Implications
FOR DEVELOPERS Bloomberg reports Utah, Georgia and Iowa come up as alternative destinations, according to people familiar with the matter.
FOR LENDERS Bloomberg reported on 28 October that banks delayed selling part of a $15 billion Anthropic-tied Texas loan after the state put a hold on new projects.
FOR INVESTORS Reuters reported that Morgan Stanley strategists are monitoring governor races in Texas, Ohio, Pennsylvania, Georgia, Nevada, Wisconsin and Michigan.
The framework says: “The structural bottleneck isn’t computing, it’s electrons.”
Abbott’s order ties Texas data center approvals to grid and water audits. The framework does not discuss the Texas order.
What Is Not Established
Bloomberg attributes the shift to Utah, Georgia and Iowa to people familiar with the matter; we read only the first two paragraphs and cannot say which developers or projects are involved, or how many.
The governor’s release sets no end date for the halt; it runs until the ERCOT audit is complete. Rattner’s red and blue shares are his, as cited by Yahoo Finance. The 43-day count and the 26-point gap are our arithmetic.
This Week In The AI Supercycle
Execution Fault Lines, Concentrated Demand, and Geopolitical Firewalls
This week’s issue: the AI build is not short of demand for its parts. It is short of cheap money, and its end revenue rests on a narrow base of large, often venture-funded buyers.
Bloomberg reports that data center developers are starting to look at Utah, Georgia and Iowa as Abbott slows Texas construction. Abbott’s 21 September order halts state permits for data centers until ERCOT finishes its audit, 43 days before the 3 November vote, by our arithmetic.
A note on sourcing. Bloomberg’s report is behind a paywall; we read its byline and first two paragraphs. The permit halt, its conditions and the governor’s quotes come from the Texas governor’s 21 September 2026 release. Election context comes from Yahoo Finance (28 October), Reuters (22 October) and Fortune (25 October); Rattner’s shares are as cited by Yahoo Finance. Day counts and the poll gap are our arithmetic; linked earlier pieces carry their own sources.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
