Illinois and New York Are Closing. Texas Has a Window.

SoftBank is building a 10 GW data center campus on DOE-owned land in Pike County, Ohio, backed by $33.3 billion in Japanese capital under the Trump administration's U.S.-Japan Strategic Trade and Investment Agreement. SB Energy will deploy 9.2 GW of new natural gas generation across Southern Ohio, while American Electric Power commits $4.2 billion in transmission upgrades.

The deal matters to Texas operators immediately: SB Energy is already executing the power build for OpenAI's 1.2 GW Stargate campus in Milam County and holds a Google PPA in the state, meaning this Ohio megaproject competes directly for the same gas turbines, transformers, and EPC contractors Texas developers need.

Modular solar startup Exowatt is standing up an 11-acre campus with 48,000 square feet of office, manufacturing, and warehouse space in Austin, targeting behind-the-meter power for AI workloads. CEO Hannan Happi framed the move bluntly: power is now the binding constraint, not compute. The company's ExoRise unit is already selling "powered land" in West Texas, New Mexico, Arizona, and Nevada, compressing deployment timelines by bundling energy and site development.

One analysis projects Texas data center demand could hit 78 GW by 2031, roughly 36 percent of total state load. Developers are increasingly co-locating generation on-site or via private lines because interconnection queues have become multi-year bottlenecks. Natural gas dominates near-term off-grid builds, but turbines, transformers, and skilled technicians are scarce commodities as projects multiply.

Texas legislation enacted in 2025 imposed stricter oversight on very large loads, requiring backup generation disclosure and grid upgrade contributions. Whether modular approaches like Exowatt's can genuinely bypass ERCOT queue constraints, or merely accelerate behind-the-meter capacity on already-committed sites, remains the open question.

Ross, a 250-person town north of Waco, learned about a $10 billion, 526-acre data center and 1.2 GW gas plant on its doorstep via media reports. Mayor Jim Jaska, a 40-year incumbent, has been told by two attorneys the town has nearly no legal recourse. Developer Infrakey has been negotiating since April 2025 with Lacy Lakeview, a suburb 7 miles from the site, which stands to capture water rights and tax revenue through annexation. Ross absorbs the noise, water demand, and visual impact. No formal communication from Infrakey to Ross residents has occurred.

Opposition has organized fast. Weekly meetings draw 350+ participants. Fortune Magazine and a British YouTuber with over 1 million subscribers have covered the dispute. The governance gap is structural: Texas annexation law lets one municipality claim project benefits while an adjacent community bears the burden.

This is a textbook case for developers everywhere. Community opposition that starts as local frustration scales into national media exposure and political ammunition. Developers who invest in early, transparent engagement and benefit-sharing models avoid this trap. Those who don't hand opponents a megaphone. Watch McLennan County's tax abatement decision and state water permit applications.

Three distinct regulatory actions are converging outside Texas:

- Aurora, Illinois votes Tuesday on what Corporation Counsel Yordana Wysocki calls "the most restrictive zoning ordinance in Illinois for sure, and very much so among those nationwide," granting the city council discretionary approval over new builds with hard caps on energy, water, noise, and emissions. - Illinois statewide: State Senator Ram Villivalam's POWER Act would require operators to absorb energy costs previously passed to ratepayers and mandate water security safeguards. The Data Center Coalition's Brad Tietz warns it could effectively close Illinois to new development. - New York: Gov. Kathy Hochul proposed requiring data centers to supply their own generation or pay premiums shielding ratepayers. Sen. Liz Krueger (D-Manhattan) is pushing a three-year moratorium on facilities exceeding 20 MW.

For Texas, this is competitive advantage crystallizing in real time. Every state that adds regulatory complexity pushes capital toward jurisdictions with clearer, faster pathways. The same ratepayer-impact and community-opposition dynamics driving regulation in Illinois and New York exist in Texas, and developers who proactively address cost-sharing and community benefits here will avoid the same walls. Bottom line: the states building regulatory mazes are exporting demand to Texas; smart operators should be preparing site packages now.

Counties imposing datacenter moratoria are simultaneously blocking solar farms, wind projects, and battery storage. In Oklahoma, anti-datacenter and anti-renewables activists are protesting together. Alabama lawmakers are considering a full solar ban triggered by a Meta datacenter's power demand. Missouri, South Carolina, and other states show the same pattern.

Reagan Farr, CEO of Silicon Ranch, told Heatmap News the backlash mirrors Occupy Wall Street dynamics: "They don't distinguish between AI, data centers, Bitcoin, and renewables. It's a general complaint against all of the above."

Texas datacenters depend on rapid solar and wind permitting to scale generation capacity. If undifferentiated anti-industry sentiment spreads into Texas communities, permitting velocity could degrade for standalone renewable projects that have nothing to do with datacenters. Could fossil fuel interests exploit this confusion to block both datacenters and renewables? That's the scenario to watch.