Donald Trump's Stargate could be derailed by opposition he did not see coming

The proposed Texas Senate Bill 6 (SB6) could disrupt future construction.

PUBLISHED APR 15, 2025

Critics, including former Trump economic advisor Vance Ginn, warn that overregulation could stifle investment.

Austin: President Donald Trump’s push to expand US artificial intelligence (AI) infrastructure could face significant delays as Texas, a key state for data center development, moves forward with legislation imposing new regulatory barriers. The Republican-controlled Texas legislature is advancing a bill that could slow the construction of data centers essential to Trump’s AI ambitions.

Earlier this year, the Trump administration announced Stargate, a $500 billion joint venture involving OpenAI, SoftBank, Oracle, and UAE-backed investor MGX, to build 20 AI data centers nationwide. Texas was selected for the first phase due to its relaxed regulations and existing energy infrastructure. However, the proposed Texas Senate Bill 6 (SB6) could disrupt future construction by adding a six-month review process on top of the current 6-18 month permitting timeline — potentially extending approvals to 24 months. The bill also mandates backup power systems and additional fees for grid usage, significantly raising costs.

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Analysts warn these requirements may deter tech companies from expanding data center projects in Texas. Stargate has already begun constructing its first 10 facilities in Abilene, but the second phase remains uncertain. If companies bypass Texas, they may abandon projects altogether, as other states lack comparable infrastructure.

Texas Lieutenant Governor Dan Patrick, a Trump ally, argues SB6 is necessary to prevent grid failures like the 2021 Winter Storm Uri, which caused widespread blackouts and 246 deaths. He claims the bill aligns with Trump’s AI goals by ensuring reliable energy for data centers. However, critics, including former Trump economic advisor Vance Ginn, warn that overregulation could stifle investment.

Microsoft recently canceled or delayed several US projects, while Alibaba’s chairman warned of a potential data center bubble. Trump’s new tariffs could further inflate construction costs, as many data center components are imported.