Texas Governor Abbott proposes new regulations for data centers, including water-use standards and tax incentive changes, as the state confronts the rapid growth of AI infrastructure.

What happened: Gov. Greg Abbott is proposing new regulations for Texas's data center sector. His recommendations include water-use standards, reporting requirements, and changes to tax incentives.

Why it matters: Texas has spent years courting the AI industry, but the sector's rapid growth is now raising concerns over power demand and local impacts. The state is balancing its attraction of AI investment with the need to manage the infrastructure's effects on the region.

What to watch: The specific details of the water-use standards, reporting rules, and tax incentive modifications will determine how heavily regulated data centers operate in Texas going forward.