Hundreds of data centers are coming to Texas. Here’s what you need to know.
Texas is experiencing a rapid surge in data center development, with over 248 projects planned statewide, driven by the demand for AI infrastructure. This growth has raised concerns about the strain on the state's electricity and water resources, leading to increased scrutiny from state officials and significant local opposition. Governor Greg Abbott has shifted towards prioritizing regulation for the industry, while communities are taking various actions from project denials to moratoriums.
Texas is undergoing a significant boom in data center construction, with a Texas Tribune analysis identifying at least 248 planned projects across the state. This growth is primarily fueled by the increasing demand for artificial intelligence infrastructure, leveraging Texas's business-friendly environment and historically lax regulations. However, this expansion is raising substantial concerns among residents and officials regarding the immense electricity and water consumption of these facilities, which could further strain the state's already pressured resources.
Governor Greg Abbott, who previously championed Texas as an AI epicenter, has now designated industry regulation as a priority for the 2027 legislative session. He has directed public utilities to ensure infrastructure costs are not passed to consumers and recommended repealing data center sales tax exemptions and other incentives. The Electric Reliability Council of Texas (ERCOT) is revising its approval processes for large energy projects, while the Public Utility Commission of Texas (PUCT) conducted a water consumption survey, which saw less than a third of companies respond due to a lack of enforcement.
Local communities have actively pushed back against data center developments. San Marcos city council enacted a citywide ban on data centers using its zoning authority. In College Station, a land sale for an AI data center was unanimously voted down after strong public outcry and a petition. Hill County initially passed a moratorium on new data center construction but rescinded it following a $100 million lawsuit from a developer, while Hays and Hood counties considered similar pauses before backing off. Brazoria County has also passed resolutions seeking more state-level regulation. Environmental groups, including Public Citizen and the Sierra Club Lone Star Chapter, are advocating for solutions to address these local concerns.