Texas Data Centers Compete with Virginia for Top Market Rank

The Lone Star State is emerging as a major contender in the data center market, poised to overtake Virginia by 2030. According to research from Jones Lang LaSalle (JLL), the transformation of the data center landscape reflects broader shifts in the United States’ digital infrastructure.

Texas Data Centers on the Rise

Texas is currently experiencing a construction boom, with 6.5 gigawatts of data center capacity under development. This figure is equivalent to more than three Hoover Dams or over 17,000 Tesla Model 3 vehicles, as per the U.S. Department of Energy’s standards.

• Over 35 gigawatts of data center capacity are being added nationwide.
• This expansion could nearly double the existing U.S. data center capacity.
• The additional capacity corresponds to the annual electricity consumption of the UK or Italy.

Driving Forces Behind the Growth

The expansion is largely fueled by the artificial intelligence (AI) boom. Major tech companies, including Amazon, Microsoft, Google, and Meta, are investing more than $600 billion in AI infrastructure by 2026, raising concerns about a potential AI bubble.

In addition to AI, the state’s geography and energy resources contribute to its appeal. It offers vast land for development, attractive tax incentives, and an abundance of energy, which is crucial for powering the increasing number of data centers.

Key Data Center Projects in Texas

Several significant data center projects are underway in Texas:

• Oracle and OpenAI: Developing the flagship Stargate data center in Abilene.
• Google: Planning a $40 billion expansion in West Texas.
• Meta: Building a significant new site in El Paso.

These projects exemplify Texas’s strategic position in the evolving data center market, as companies seek to harness local energy resources to meet expanding electricity demands.

A Changing Landscape

For over 15 years, Northern Virginia has been the primary hub for data centers. However, the rapid expansion in states like Texas reflects the shifting priorities of tech companies. They are now focused on securing available power, affordable land, and optimal tax benefits.

The Texas data center market is evolving quickly, reshaping the landscape of digital infrastructure in the U.S. As development continues, the competition between Texas and Virginia will be closely watched in the years leading up to 2030.