A global semiconductor company has pulled the plug on a controversial data center project in rural Texas after Governor Greg Abbott made clear the development didn’t meet the state’s standards for protecting residents.
Diode, the company behind the proposed facility near Cedar Creek Lake in Henderson County, informed local officials Thursday that it will no longer pursue land acquisition for the project. The decision came after what company officials described as conversations with Abbott’s staff, state legislators, and county commissioners who relayed serious concerns from local families.
“Data centers that want to do business in Texas must meet a clear standard. This project did not,” Abbott said in response to the withdrawal.
The governor didn’t mince words about his expectations for other companies considering similar developments in the Lone Star State.
“Texas requires companies to put communities first, protect our natural resources and power grid, and respect the quality of life of our residents,” Abbott said. “Diode did the right thing by withdrawing their project. If other data center developments refuse to meet these standards, I expect them to do the same.”
The proposed data center had sparked pushback from residents in the rural communities surrounding Cedar Creek Lake, who raised concerns about a large-scale industrial facility being located near their homes and families.
Henderson County Precinct 1 Commissioner Wendy Spivey, who engaged directly with Diode officials about the proposal, celebrated the outcome on Facebook. She credited the victory to everyday Texans who refused to stay silent.
“I want to thank every resident who attended meetings, asked questions, researched the facts, signed petitions, wrote letters, sent emails, made phone calls, and spoke with courtesy and conviction,” Spivey said. “Your participation mattered.”
Spivey maintained that her opposition was never about blocking progress entirely, but about protecting the character of a community built around families and faith.
“From the very beginning, my position has been consistent: while Texas will continue to need infrastructure to support growth, this proposed location, surrounded by homes, families, and the Cedar Creek Lake community, was not an appropriate place for a project of this scale,” Spivey added.
She also expressed appreciation for Diode’s willingness to listen. “I also appreciate Diode Ventures for taking the time to listen to our community’s concerns and for making the decision that this location was not the right fit for a large-scale data center,” the commissioner said.
In its notice to county officials, Diode indicated it would shift focus to other opportunities in Texas. The company pledged to support development practices that include advanced water-efficient technologies, such as closed-loop and air-cooled systems, while engaging openly with communities from the start of site exploration.
“Instead, we will focus on opportunities where we can support Texas’ growing infrastructure needs,” the company stated.
The withdrawal comes on the heels of Abbott directing the Public Utility Commission of Texas and the Electric Reliability Council of Texas to tighten oversight of data center developments earlier this month. The governor’s directives require that data center interconnections reduce residential electricity costs, mandate that developers pay for all electric infrastructure without passing costs to ratepayers, and call for reviews of existing regulatory authorities to identify additional protections for Texas residents.
State Rep. Cody Harris was among the officials who communicated with Diode about community concerns prior to the company’s decision.
The outcome represents a win for local families who organized against a project they believed threatened their way of life, and a signal from state leadership that corporate interests won’t automatically trump the concerns of Texans living in affected communities.
