Artificial intelligence is fueling a record surge in data center construction across Texas and the United States as tech companies race to expand computing power for AI training, cloud services and advanced analytics.
Texas has emerged as the fastest-growing market in the country, with more than 400 facilities operating or under construction and 6.5 gigawatts of new capacity in the pipeline. Industry reports project the state will surpass traditional leaders like Northern Virginia to become the world’s largest data center market by 2030. Nationally, U.S. data center power demand is expected to nearly double by 2028, driven by hyperscalers including Microsoft, Google and Meta.
The boom stems from AI’s massive energy and infrastructure needs. Companies are drawn to Texas by inexpensive land, abundant natural gas for on-site power plants, and the state’s deregulated ERCOT grid, which allows faster permitting and connections than more regulated markets. Generous tax incentives — including sales tax exemptions on equipment, servers and electricity — add further appeal, though they cost the state more than $1 billion a year in forgone revenue.
While the growth brings jobs and tax revenue, it has sparked concerns in communities about power grid strain, water use for cooling, noise from equipment and long-term environmental impacts. Some projects face local pushback, as seen in recent council meetings over large-scale proposals.
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