OpenAI's letter to Governor Abbott on Texas AI infrastructure

OpenAI sent Texas Governor Greg Abbott a letter dated August 7, the company said in a post published on its website Monday, outlining commitments around its AI infrastructure buildout in the state.

The letter follows a shift in Abbott's own posture toward data centers. In June, he wrote to the Texas Public Utility Commission and ERCOT demanding that data center costs not land on residential and small-business ratepayers. In early August, he ordered both agencies to review every proposed data center project before it connects to the grid, requiring disclosure of expected electricity demand, water use, tax incentives, and ownership.

“AI infrastructure should pay its own way, support a reliable grid, use water responsibly, protect neighboring communities, and operate with transparency and accountability.”

— Uday Ruddarraju, CTO of Compute, OpenAI (letter to Governor Abbott, Aug 7, 2026)

Uday Ruddarraju, OpenAI's CTO of Compute, signed the letter. It commits the company to fully funding its own infrastructure costs so they don't land on residential or small-business bills, working with utilities and ERCOT on grid capacity, minimizing water use through efficient cooling, including closed-loop systems, and sharing accurate, timely data on electricity and water consumption, infrastructure investment, and any public incentives it receives.

OpenAI's largest Texas project is the Stargate campus in Abilene, part of a roughly $500 billion buildout with Oracle, SoftBank, and MGX targeting close to 7 gigawatts of capacity across sites in Texas, New Mexico, Ohio, and Wisconsin. A newer site in nearby Shackelford County is expected to bring more than 5,000 construction jobs.

• Letter signed by Uday Ruddarraju, OpenAI's CTO of Compute, dated August 7
• Comes after Abbott ordered a review of every proposed Texas data center project in early August
• Commits OpenAI to fully funding infrastructure costs and minimizing water use through closed-loop cooling

Texas has become a flashpoint for AI infrastructure fights beyond OpenAI: we covered how an AI data center developer sued a small Kentucky town over a rejected project, and how Galaxy Digital's second Texas data center started 20 times smaller than its first amid the same local pushback OpenAI's letter is trying to get ahead of.

This piece is informational, not a recommendation to buy, sell, or hold any asset.