President Trump waded into a growing partisan divide over data centers on Friday, arguing that communities rejecting the facilities are passing up a major economic windfall and ceding ground to China. In an interview with Punchbowl News, Trump said he had noticed Texas's recent move to pause new data center connections to the state's power grid and deemed it a misstep.
"I saw Texas the other day sort of against data centers. I think it's a mistake," Trump said. He stopped short of endorsing a federal policy, adding, "I'm not taking positions," but framed the issue in stark economic terms: "When a community wants it, it means a lot of money is going to come into that community."
The president's comments appear to target Texas Governor Greg Abbott, a Republican who announced a moratorium on Monday until state regulators complete an audit of data centers' impact on the grid. Abbott said at the time that "Texans must come first" and that any project failing to meet state standards would be denied grid access.
Trump, however, said that if he were a governor, he "would want data centers so badly," arguing they could dramatically lower taxes. "This is a tremendous source of income," he said. He also dismissed aesthetic concerns often raised by opponents, calling the facilities "the most incredible buildings I've ever seen."
The president went further, suggesting data centers could rival the oil industry in economic importance. "For Texas to say no to data centers is a mistake in the sense that it could be bigger than oil," he said.
Trump's stance puts him at odds with a bipartisan coalition of lawmakers and local officials who have raised alarms about the strain data centers place on electricity supplies, water resources, and local infrastructure. The issue has become a flashpoint in states like Virginia, Georgia, and now Texas, where growing demand from artificial intelligence and cloud computing is colliding with aging grids.
The president also cast the debate in national security terms, warning that the U.S. cannot let China "beat us" in the data center race. He suggested that some opposition campaigns may be funded by Beijing, though he offered no evidence. "A lot of people think that the campaign that's being put on is being paid for by China," he said.
Trump said he plans to discuss data centers with Chinese President Xi Jinping during a state visit in September, adding, "I don't blame him. I mean, we do things and they do things." The comments come as his administration prepares to ban Chinese imports of optical transceivers used in data centers by year's end, a move first reported by Reuters.
The president's remarks highlight a potential rift within his own party, as some Republicans in Texas and elsewhere push for stricter oversight of the industry. His defense of data centers also aligns him with tech companies and business groups that argue the facilities are critical to U.S. competitiveness in artificial intelligence and cloud services.
With the 2026 midterm elections looming, the data center fight could become a test of Trump's influence in GOP primaries, similar to recent clashes over other issues. For now, the president is betting that the promise of jobs and tax revenue will outweigh local concerns about power and water.
