Texas Governor Greg Abbott has ordered state regulators to impose penalties on datacenters that fail to comply with state laws requiring them to disclose their water use. "Data centers must share the duty to protect Texas water," Abbott said in a statement on Monday. He directed the Texas Water Development Board (TWDB) to use its enforcement powers to penalize past noncompliance and to hold datacenters accountable for any future failures to report their water usage accurately. Abbott, who is running for a fourth term, claimed that major water users, including datacenters, have violated the Texas Water Code by not providing the required information about their water consumption to the TWDB. This move comes after Abbott issued a similar directive last month, instructing the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) to audit datacenters going through the ERCOT interconnection process. The audit aims to collect detailed information on water consumption, sources of water, and efforts to adopt water-efficient technologies. Datacenters that do not complete the audit may be denied permission to connect to Texas's power grid, according to Abbott. Texas has become a major hub for datacenter development, partly due to its favorable business climate and abundant energy resources. According to the Pew Research Center, Texas currently has the second-highest number of datacenters in the U.S. With 335 existing datacenters and at least 248 more in the pipeline, experts predict Texas could soon surpass Virginia as the global leader in datacenter concentration. However, the rapid growth of the industry has raised concerns about the strain on the state's water and power resources. Water use by Texas datacenters has already reached significant levels. In 2025, they consumed an estimated 25 billion gallons of water, and that number is expected to rise to 161 billion gallons annually by 2030. That would account for about 2.7% of all water used in Texas, or roughly the amount consumed by 1.3 million households nationwide. As a result, Texas has been working to increase oversight of the datacenter industry to ensure that it does not overextend the state’s limited water and energy resources.