Texas Senate candidate James Talarico is making opposition to data centers a centerpiece of his campaign, accusing Republican opponent Ken Paxton of being too closely tied to the industry. But Talarico’s own financial connections to major technology and data-center interests are raising questions about the consistency of his attacks.
Texas Democrat James Talarico has launched a new push for tougher restrictions on data centers, arguing that the rapid expansion of artificial intelligence infrastructure is driving up utility costs and putting too much strain on Texas communities.
Talarico’s proposal would repeal Texas’ data-center sales-tax exemption, require large energy users to cover their own infrastructure and grid-interconnection costs, mandate closed-loop water systems, increase transparency surrounding tax incentives, and give local communities greater authority over proposed projects.
“Texas should be a leader when it comes to innovation and technology, but that only works if Texans get a say and get a share of that economic growth,” Talarico said while announcing the plan.
The Democrat has also repeatedly targeted Republican Senate opponent Ken Paxton over his financial ties to the data-center industry. Talarico has accused Paxton of accepting nearly half a million dollars from data-center companies while supporting policies favorable to the industry.
Paxton has received roughly $400,000 from donors connected to data centers, according to Federal Election Commission records cited in reporting on the race.
But Talarico’s own fundraising raises a similar question.
According to FEC filings cited by Breitbart, Talarico has benefited from more than $11 million in support from donors with ties to the data-center and artificial intelligence industries. One of his largest backers is billionaire Reid Hoffman, who has contributed $10 million to Lone Star Rising, a political action committee supporting Talarico. Additional filings put Hoffman’s total support for Talarico at approximately $11.5 million.
Hoffman has publicly advocated for expanding U.S. data-center capacity and energy infrastructure. He also holds billions of dollars in investments in Microsoft, a major technology company that operates and continues to expand data centers in Texas and around the country.
Other major Talarico supporters also have connections to the technology and data-center ecosystem. Hedge fund executive Stephen Mandel has contributed roughly $500,000 to Talarico-affiliated groups, while Simone Coxe has contributed another $500,000 to Lone Star Rising. Coxe’s husband, Tench Coxe, serves as a director of Nvidia, one of the world's leading companies in artificial intelligence hardware.
Talarico’s current position on data centers also represents a shift from his previous legislative record. In 2023, he voted for legislation that would have established a 20-year tax exemption for qualifying large data centers measuring at least 250,000 square feet and requiring at least 20 megawatts of electricity demand. The legislation ultimately failed.
Meanwhile, Talarico’s proposed restrictions substantially overlap with measures already being promoted by Republican Gov. Greg Abbott, including ending data-center tax breaks, requiring developers to pay infrastructure costs, adopting closed-loop water systems, increasing transparency, and giving communities greater protections from unwanted development.
The issue has become an increasingly important political battleground in Texas as residents debate the economic benefits of massive technology investments against concerns about electricity, water usage, taxes, and local control.
For Talarico, the controversy presents a political challenge: he is attacking Paxton over data-center money while simultaneously benefiting from millions of dollars in support from wealthy donors connected to the same technology ecosystem.
As the Texas Senate race heats up, voters will ultimately have to decide whether Talarico’s new data-center platform represents a genuine policy shift—or a campaign strategy designed to capitalize on growing public concern over the industry's rapid expansion.
