President Trump publicly broke with one of his closest allies over the future of Texas’ booming data center industry — calling Gov. Greg Abbott’s resistance a “mistake” and predicting the sector could eclipse oil as an economic force.
“For Texas to say no to data centers is a mistake in the sense that it could be bigger than oil,” Trump told Punchbowl News Friday.
“DATA CENTERS COULD BE BIGGER THAN OIL.”
The clash marks a rare public split between Trump and Abbott, who have stood shoulder-to-shoulder on border enforcement, energy policy, and election integrity. But the artificial intelligence boom is forcing a choice: embrace billions in investment, or protect Texas residents from potential power grid costs.
Abbott has moved aggressively to address electricity concerns. He directed state regulators to ensure data centers cover their own infrastructure costs rather than shift the burden onto ratepayers. The governor also called on developers to add their own power generation instead of draining the grid.
Dallas now ranks as the world’s No. 1 primary data center market, according to Cushman & Wakefield’s 2026 Global Data Center Market Comparison. Texas is growing at a pace that could eventually rival or surpass Virginia, currently the world’s largest data center market by operating capacity.
That growth has intensified scrutiny of the strain large-scale facilities place on Texas’ power system — the same grid that faced brutal winter blackouts in 2021.
Balaji Tammabattula, chief operating officer of BaRupOn, which is developing a 700-acre data center campus near Houston, told Fox News Digital that Trump’s pushback was “really helpful.”
“A lot of companies made huge investments into Texas, and now all of a sudden he [Abbott] changed his stance,” Tammabattula said. “That, I think, could be a problematic situation going forward.”
BaRupOn is building its campus to generate its own power rather than rely on the state’s electric grid. The company is constructing natural gas pipelines and turbines to create what Tammabattula called an “islanded power campus.”
That constraint could now work in BaRupOn’s favor as Texas pushes data centers to rely more heavily on their own power generation. Tammabattula said the company has advocated for behind-the-meter power for more than a year.
“For us, it definitely is beneficial because it proves what we’ve been trying to say for the last one and a half, two years,” he said.
Tammabattula acknowledged the concerns fueling opposition to the industry’s rapid expansion — particularly the possibility that the cost of supplying massive amounts of electricity to new facilities could fall on residents.
The challenge for Texas is finding a way to accommodate an industry pouring billions of dollars into the state without leaving residents to shoulder the costs of the infrastructure needed to support it.
Tammabattula said the tension is unlikely to disappear as demand for data centers continues to grow.
“These data centers have to be built,” he said. “Until an actual solution comes up, this is going to continue for the long term.”
“And in my opinion, that has to come from the government.”
Neither the White House nor Abbott’s office responded to Fox News Digital’s request for comment on the departure between the two.
