Hundreds of data centers are coming to Texas. Here’s what you need to know.
Texas is experiencing a rapid influx of over 240 planned data centers, driving a high-tech gold rush but raising urgent concerns over the state's already strained water and energy resources. Governor Greg Abbott and state entities are moving to regulate the industry, while local communities are pushing back, leading to zoning bans, rejected land sales, and a rescinded moratorium following a developer lawsuit. The state is grappling with how to balance economic development with environmental and infrastructure demands.
Texas is experiencing a significant data center boom, with at least 248 projects planned across the state, driven by the demand for artificial intelligence infrastructure. While industry leaders like Amazon and Meta promote economic benefits and job creation, experts and residents express concern about the immense strain these facilities will place on the state's electricity grid and water supply.
Governor Greg Abbott, initially a proponent of Texas as an AI epicenter, has shifted his stance, announcing that regulating the industry will be a priority for the 2027 legislative session. He has directed public utilities to prevent infrastructure costs from being passed to customers and recommended repealing data center sales tax exemptions. The Electric Reliability Council of Texas (ERCOT), the state's grid operator, is revising its planning and approval processes due to the flood of power requests from these projects, most aiming to operate by 2030.
Local opposition is escalating across the state. San Marcos city council members used their zoning authority to pass a citywide ban on data centers, and in College Station, a land sale for an AI data center was unanimously voted down after significant public outcry and a petition with over 5,000 signatures. Hill County enacted a temporary moratorium on data center construction but rescinded it after a developer filed a $100 million lawsuit. Hays and Hood counties considered similar moratoriums but withdrew after warnings about a lack of authority. Brazoria County has passed resolutions requesting more state-level regulation.
Environmental groups, including Public Citizen and the Sierra Club, advocate for solutions to address the water and energy concerns. Data centers, especially newer AI-driven hyperscalers, require vast amounts of electricity and water for cooling. The University of Texas at Austin estimates data centers could account for 3-9% of Texas' total water use by 2040. Google, for instance, plans to use closed-loop cooling systems in water-stressed regions of Texas, with an initial fill of 1.5 to 2 million gallons per building.