Power Is the New AI Bottleneck: Texas Votes, Europe Queues

For two years the AI race was told as a story about chips and models. On election night in the United States it became a story about electricity, and Texas, the state that wanted data centers most, just elected a governor who promised to stop them. Europe has the opposite problem: it wants the compute, but its grids, prices and queues are already saying no.

This is our documentation research on why data center power is now the real constraint on AI, how the politics differ on each side of the Atlantic, and what it means for Europe's AI gigafactories and the physical AI wave that will need even more of it.

Texas: from open grid to election issue

Texas built its data-center boom on cheap land, plentiful energy and a pro-business pitch. That changed in August. On August 3, Governor Greg Abbott halted the connection of new data centers to the state grid and ordered an audit of their power demand, environmental impact and tax breaks, Reuters reported via CNA. By then ERCOT, the state grid operator, was tracking more than 400 gigawatts of data-center projects seeking a connection, which Reuters described as “roughly equivalent to what it would take to power the entire US South.”

Then came the vote. Democrat Gina Hinojosa ousted Abbott after campaigning for a statewide moratorium and vowing to “stop the data center takeover.” Before the election she said she would ban all data-center approvals until the legislature passes protections for Texans. A University of Houston poll in October found 79% of likely Texas voters supported limits on how many data centers can be built, according to the same report.

How big was the backlash nationally?

• 76% of voters nationwide opposed a new data center in their community, in an NBC and SSRS exit poll cited by CNA/Reuters and The Verge.
• More than 50% of respondents called AI and data centers a “crucial or a major factor” in their decision to vote, per the NBC exit poll reported by Euronews.
• The Verge counted 45 local data-center measures on ballots, 33 of them restrictive, citing Redbud. Ohio voters backed a ban on facilities above 25 MW, and El Dorado, Kansas, banned those above 10 MW for 10 years, per The Verge.
• 42% of registered voters in a Reuters/Ipsos poll said limiting data-center construction was very important or the most important issue for them (CNA/Reuters).

What a moratorium can and cannot do

The headline risk is real, but it is narrower than it looks. Heather West of Eurasia Group told Euronews that data centers “weren't the reason most people voted, but they gave the affordability argument a local, visible target.” She said Hinojosa's power to go beyond Abbott's temporary, grid-driven pause is “limited” and that “projects already permitted or under construction will largely proceed.” The friction, in her view, hits the next wave: local fights, slower permitting and pressure to make data centers pay.

Timing matters too. Abbott's audit was expected to conclude at the end of 2026 and some of his measures, such as the air-permit ban, had near-term expiry dates, per CNA/Reuters. The new governor does not take office until January, so 2026 deals already in motion are largely set; the uncertainty is about 2027 and beyond. President Trump, for his part, called pushback against data centers “all a hoax” in September, Euronews noted, so federal and state politics are now pulling in different directions.

Europe: the queue is the moratorium

Europe rarely votes on data centers directly. It does not need to: the grid queue does the rationing. Three examples from this year show the pattern.

• Denmark: state grid operator Energinet paused new connection agreements in March after an “explosion” in requests. About 60 GW of projects are waiting, far above Denmark's peak demand of around 7 GW, CNBC reported.
• Netherlands: data centers hold about 15 GW of grid-connection requests, almost a third of the waiting list and about 26 times what Dutch data centers drew on average in 2024. A new applicant waits about ten years, and grid expansion to 2040 is put at more than €200 billion, per DC Market Insights.
• Prices: the EU average electricity price for non-household consumers was €0.18 per kWh in the first half of 2026, down 5.4% on a year earlier, with Ireland at €0.27, Italy and Cyprus at €0.23, Sweden at €0.12 and Finland at €0.09, Eurostat said.

One caution on queue numbers: a request is not demand. Developers file speculative applications in several places at once, so 60 GW in Denmark or 400 GW in Texas overstates what will ever be built. But a queue still blocks the serious projects stuck behind the speculative ones, and that is the bottleneck.

The price gap with the US

The IEA's Electricity 2026 report says electricity prices for energy-intensive industry in the EU remain more than twice US levels, and puts EU wholesale prices at about $95/MWh in 2025, roughly double the US. The IEA uses Texas as its US benchmark. It also notes that negative-price hours, when solar and wind flood the market, reached about 6% in France, Germany, the Netherlands and Spain. That is the European paradox: plenty of cheap power at noon, not enough firm power around the clock for a facility that runs 24/7.

Baseload, not just more renewables

Europe is not short of electricity in general; it is short of firm, contracted, around-the-clock supply where data centers want to build. The market is already adjusting. In Finland, Google signed a 507 MW agreement with Fortum at Loviisa, the country's first nuclear power purchase agreement. Its 22-year tenor keeps a plant that supplies 10% of Finland's electricity from retiring in 2030, and Rystad Energy says data centers have become the main financier of new Finnish power capacity, with contracting shifting “from renewable volume to sources that provide baseload.”

For builders, the practical lesson is that the cheapest region on a price chart is not always the fastest place to get capacity. If you are choosing where to run inference, latency and data residency still matter, but so does whether your provider has power contracted for the next decade. Our guide to deploying an AI agent on AWS covers region choice from the software side.

Gigafactories and physical AI raise the stakes

The EU's answer to the compute gap is the AI gigafactory programme. The EuroHPC call (EUROHPC-2026-CEI-AIGF-01), published July 30, 2026, says each gigafactory must integrate at least three to four times the most advanced AI processors in Europe's most powerful AI factories, and must “demonstrate adequate power capacity infrastructure” plus best practice on energy and water efficiency. The deadline for large-scale sites is December 3, 2026; the medium-scale deadline was pushed to February 4, 2027 to give member states time for budget commitments.

Nathan Benaich's State of AI 2026 puts the financing gap in perspective: four US hyperscalers guide to roughly $733B of 2026 capex, while the EU's plan seeks up to €10B in public funding and at least €20B privately. He also argues Europe's bargaining chip could be “powered land and data center capacity,” if energy prices and planning challenges come down.

Physical AI makes the power question bigger, not smaller. Benaich writes that robotics is approaching its “GPT-2 moment”: Skild's S1 scored 66% on its cumulative per-step success measure versus 9% for a language-prompted baseline, and world models such as Wayve's GAIA-4 learn by simulating the consequences of actions. Training robots on video and simulation is compute-hungry, and the inference runs continuously on fleets. Whoever has firm power will train and serve those models. We track the agent side of that shift in our 2026 AI tools comparison.

What this means for AI builders

• Expect capacity, not price, to be the first constraint in 2027 quotes. Ask providers where new capacity is powered and contracted.
• Do not assume Texas is the default cheap region. Existing sites will largely proceed, but new US projects face slower permits and local votes.
• In Europe, look at markets where baseload is being contracted, such as the Finnish nuclear PPA, rather than headline wholesale prices.
• Efficiency is now a power strategy. Smaller models, caching and batching cut the megawatts you need; see our notes on AI gateways and Fireworks' background mode.

Our take

The US and Europe have reached the same wall from opposite sides. In Texas the limit is political: voters have decided data centers must earn their place on the grid, and the next wave will pay more and wait longer. In Europe the limit is physical and regulatory: the grid queue already acts like a moratorium, and prices for firm power are roughly double. Neither stops AI. Both mean that the winners of the next phase, especially in power-hungry physical AI, will be the ones that secure baseload first. For Europe's gigafactories, power capacity is not a box to tick in the tender. It is the whole game.

Sources

• EuroHPC JU: AI Gigafactories call for tenders
• Eurostat: electricity prices for non-household consumers, H1 2026
• IEA: Electricity 2026, prices
• Reuters via CNA: Texas data centers face uncertain future after Hinojosa wins
• The Verge: data centers on the midterm ballot
• Euronews: backlash to AI data centres reaches ballot boxes
• CNBC: Denmark pauses data-center grid connections
• DC Market Insights: data centres want 15 GW of the Dutch grid
• Rystad Energy: data centers finance new Finnish power
• Nathan Benaich: State of AI 2026