In the span of a couple years, hundreds of massive electricity- and water-hungry data centers have proposed construction in Texas — a veritable gold rush for those capitalizing on the sudden demand for artificial intelligence infrastructure.
There are at least 248 data center projects planned across the state, according to a Texas Tribune recent analysis.
Experts and industry representatives say the Lone Star state is just the place for the data center revolution because of its friendliness to business and lax regulation. And while industry leaders promise economic gains, some Texans fear the pressure data centers could add to the state's already strained resources like water and energy.
Gov. Greg Abbott recently moved from calling Texas an "epicenter" of AI development to announcing he would make regulating the industry a priority for state lawmakers during the 2027 legislative session.
Here's what you need to know about data centers, their water and energy use and how Texas officials and residents are responding.
What is a data center?
A data center is a facility that houses computer servers, data storage drives and hardware. It serves as the physical backbone or brain of the internet, storing and processing everything from the digital world, including cloud files and streaming media to email, social media, banking transactions and artificial intelligence models. Older, smaller data centers run the internet or global network of computers and devices. Artificial intelligence is driving the demand of new data centers or so-called "hyperscalers." These data centers not only store data, but run several calculations and analyze information to generate answers for users who are using AI assistants. These newer data centers, which are fueling the current data center construction boom, are meant to operate efficiently without any interruption. Keeping them running continuously requires immense amounts of power, which can also require lots of water for cooling.
What benefits could data centers bring to Texas?
Data center developers and supporters say they are needed to ensure the U.S. remains a world leader in technology. Industry leaders, such as Amazon Web Services, also tout increased jobs from for data center construction, operations and infrastructure. The company says it is also driving renewable energy projects and investing in local businesses, education and community organizations. The company Meta also announced a free job training program in June that promises a "fast-track to a long-term career in a skilled trade," which will include Texas as a pilot location for 2026. Some critics have said the billions in tax breaks that data centers have received outweigh their investment in Texas communities. Meanwhile, the tech industry argues that tax breaks are crucial to maintain the industry's investment in the state.
How many data centers are planned in Texas?
Texas does not track data center developments, and information about their locations and energy use provided to the state's grid operators has not been made public.
"The industry has long relied on non-disclosure agreements and on not having any rules or requirements for their disclosure and reporting," said Rachel Hanes, policy director at Greater Edwards Aquifer Alliance, an organization monitoring the data center boom. She added that data center operators claim that much of their information is proprietary and the state gives them no incentive or legal requirement to disclose.
Experts say finding this information is hard, so they rely on private databases who track the industry to get an idea of what's coming.
Reporters at The Texas Tribune acquired and analyzed data from two companies that compile and sell data on operating and planned data centers to give readers a clearer picture. We found that the state has a total of 335 existing data centers, with at least 248 more in the works, according to data acquired from Cleanview and Data Center Map.
Where are data centers in Texas?
According to The Tribune's recent analysis, certain regions of the state face an influx of data center development. There are plans for 86 data centers in North Texas, 56 in Central Texas and 45 in West Texas.
Nearly half of the planned data centers in Texas are set to be built in unincorporated areas not governed by cities or towns — marking a shift from existing data centers where only 12% are currently in unincorporated areas only governed by county government. Nearly 60% of the data centers in the state that are either planned or under construction, are in state House districts that voted for President Donald Trump and elected a Republican state representative in 2024.
Data center developers are also more frequently choosing rural, unincorporated areas because it's an easier path to build, experts say. In Texas, counties typically don't have the power to block development — unlike city officials who wield zoning authority to regulate what type of properties can be built in specific geographic zones.
Why are data centers coming to Texas?
Texas has been a magnet for developers because of the cheap land, available power, fiber lines and, importantly, its lack of local business restrictions.
The state has promised to have the electrical infrastructure and water to make it possible. The explosion in data center projects is tied to Texas becoming "one of the national leaders in digital infrastructure," said Dan Diorio, vice president of state policy for the industry association, the Data Center Coalition. The state's business-friendly regulatory environment and ability for companies to build needed energy infrastructure relatively easily attracted projects. So did its strong workforce and available land, water and fiber infrastructure, Diorio said. The Dallas-Fort Worth region in particular grew as a major market.
How do data centers use water?
Data center servers generate heat and most of the water used by data centers is used to to keep their systems cool, according to experts. The industry argues its technology is improving to require less water.
The amount of water used on the technology varies depending on the different cooling systems that are used, as well as the center's location since hotter regions require more cooling. In some instances, a liquid (often water or another coolant) carries that heat away from the equipment. In a "closed-loop" system the liquid doesn't get used up immediately — the system draws a large amount of water at the start but reuses it over some period of years by circulating inside the system.
Google plans to use closed-loop cooling systems in water-stressed regions of Texas. Ben Townsend, head of infrastructure and sustainability at Google, said that an initial fill for the system per building can range from 1.5 to 2 million gallons — equivalent to the average use of more than 6,000 U.S. households. Townsend added that the company is also looking at alternative water resources like brackish groundwater or salty groundwater.
Data centers also use water indirectly through the extensive energy they consume. And Texas' energy production, especially from coal, nuclear and natural gas plants, requires massive amounts of water.
Water experts say data centers will put more pressure on Texas' water supply. One estimate shows data centers could account for between 3% and 9% of Texas' total water use by 2040 — up from less than 1% today, according to a recent white paper from The University of Texas at Austin. By comparison, manufacturing accounts for about 7% of the state's water use, according to the current state water plan.
How much power do data centers use?
Data center servers themselves require electricity, and some of the more water-efficient cooling systems use the most electricity to operate.
As AI computing chips get more powerful and hotter, the need for cooling increases and that means more energy, said Margaret Cook, a leading data center researcher with the Houston Advanced Research Center, noting that "great power becomes great responsibility."
The energy demands are being felt in Texas.
The Electric Reliability Council of Texas, the state's main grid operator, has been flooded with requests for power. As of May, according to ERCOT, the estimated electricity that large development projects could need totaled 439 gigawatts of power capacity — which would equal roughly a third of all the power generation in America and is five times larger than the current all-time peak demand on the state's grid. Of those projects, about 89% are data centers, most of which have aimed to start operating by 2030; but energy experts say it's unlikely that all of them will be built.
In the rural Texas county of Hood, one developer has proposed three data center projects that could use enough electricity to power 3 million homes.
How is the state of Texas responding?
Texas has shifted from aggressively courting data centers to tightening oversight. In June, Gov. Greg Abbott directed public utilities to ensure that the infrastructure costs required to construct and serve data centers are not passed on to its customers. He also released sweeping regulatory recommendations on data centers, including repealing data center sales tax exemptions — that costs the state more than a billion dollars a year — and "other outdated or unnecessary incentives for data centers."
State leaders and the grid operator, ERCOT, are revising its planning and approval process to keep pace with requests from data centers trying to connect to the electrical grid. The agency is implementing stricter vetting for massive energy projects.
Some state officials have expressed interest in expanding counties' regulatory authority over data centers. Ahead of the 2027 legislative session, state lawmakers have been tasked with studying the development of data centers and examining the total water usage of data centers in the state.
Data center and cryptominers operators had a deadline in late May to answer a survey by the Public Utility Commission of Texas that asked companies to provide information about water consumption, including how much water they use for on-site cooling and indirectly through power generation. Lawmakers were notified in June that less than a third of companies surveyed responded. The survey lacks enforcement and no fines will be issued for those who did not submit it. The findings of that survey will be shared with the Legislature, and Water Development Board and the Commission on Environmental Quality to inform future water planning and help policymakers better understand the relationship between water use and energy demand at large industrial facilities..
How are Texas communities responding?
Residents in communities across the state have been pushing back against data center projects by calling on their local elected officials to not move forward with projects or tax incentives for developers with mixed results. For example, San Marcos city council members used their power to regulate land use in the city's zoning districts to pass a citywide ban of data centers. In College Station, city council members unanimously voted down a land sale to an AI data center after outcry from hundreds of residents, including a petition with more than 5,000 signatures.
Hill County passed a moratorium, or temporary pause, on new data center construction in its communities, but it rescinded the one-year pause after a developer filed a $100 million lawsuit. Leaders in Hays and Hood counties considered a similar approach, but backed off after warnings, including from a state lawmaker, that they may lack the authority to do so.
More recently, some local elected officials, such as in Brazoria County, have passed resolutions outlining requests to state lawmakers for more data center regulations.
Environmental groups, including Public Citizen, the Sierra Club Lone Star Chapter, the Texas Living Waters and Greater Edwards Aquifer Alliance, have also advocated for solutions that could help local residents address concerns.
Are there more resources to learn about data centers?
If you want to learn more about data centers, you can read The Texas Tribune's reporting on data centers and use our look-up tool to find data centers near you.
Sign up for our weekly environment and energy newsletter to get more updates on our reporting.
Join us and a panel of experts for a virtual conversation on data centers on July 22 at noon. See details and RSVP here.
Have a question about a data center or want to tell us about a new or planned data center near your part of Texas? Tell us here.
Disclosure: Google, Houston Advanced Research Center and University of Texas at Austin have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.
This article first appeared on The Texas Tribune.
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