Data Centers in Texas

Data Centers in Texas: Massive Infrastructure Scale and Power Autonomy

Texas ranks among the fastest-growing data center markets, with 224 data centers operated by 130 providers across major cities such as Austin, San Antonio, and Fort Worth. The state records 10 cloud regions, 146 direct cloud on-ramp points, 24 internet exchanges, and 457 networks, supporting an expansive digital ecosystem for both global and regional business needs. Names like 11:11 Systems and 365 Data Centers highlight the range of providers. Product availability spans cabinet, cage, bare metal, cloud GPU, dark fiber, DIA, Ethernet private line, and IP transit services, reflecting diverse requirements for business deployments. Data center development is progressing rapidly, with at least 248 new data centers in planning or construction according to Texas Tribune research. The Electric Reliability Council of Texas (ERCOT) manages about 90% of statewide load, a critical factor amid surging power usage from next generation deployments and the growth of crypto mining facilities. In Fort Worth, new data centers have prompted moratorium discussions, and residents have attended county meetings to comment on impacts. Similar trends exist in San Antonio, where business expansion and local community concerns are often addressed through coordination between local governments and developers. The Lone Star State offers a state sales and use tax exemption for qualified data center construction, with the Legislature reviewing further incentive frameworks. Each project must meet job creation standards, with operators required to report at least 20 created jobs post-construction. Renewable energy options are advancing, with solar power production set to supply major facilities and contribute to local economies. While the FEMA risk score indicates a moderate natural disaster risk, local governments, especially in Hood County, have responded with regulatory actions to assess water, infrastructure, and health impacts of facilities development. Texas' combination of inventory, scale, business incentives, and connectivity options sets a broad foundation for continued data center construction and new business opportunities.

Texas: At A Glance

Network & Connectivity Ecosystem

Texas supports one of the largest data center and network ecosystems in North America, with 224 data centers across key cities such as Dallas, Austin, Fort Worth, and San Antonio. Providers operate 146 cloud on-ramps and 24 internet exchanges, underpinning a high-connectivity environment that includes names like BBIX Dallas and the BGP Exchange Dallas. This rich network landscape is supported by 457 networks and enables direct access to multiple hyperscale cloud regions. Dallas and Austin are recognized as central locations with dense clusters of data centers, while Fort Worth and San Antonio each host multiple major facilities, reinforcing regional diversity for business deployments and redundancy strategies. A broad range of connectivity products, including dark fiber, Ethernet private line, DIA, IP transit, and baremetal, indicates robust service availability throughout the state. The Electric Reliability Council of Texas manages most of the grid, supporting growing electricity demand driven by new data centers and next generation workloads, with an electricity mix heavily weighted toward natural gas and a significant portion from renewables. As data center construction continues at scale - Texas Tribune reports at least 248 new data centers are planned - local governments in places like Fort Worth and Hood County are actively engaged in development discussions to balance growth with community and infrastructure impacts. This dynamic market is shaped by both ongoing investment and community debate, alongside opportunities for cost optimization through sales tax exemptions for qualifying facilities. For businesses seeking resilient, high-bandwidth deployments, data centers in Texas provide a mature and competitive connectivity ecosystem across the state's leading cities.

Sustainability Analysis - Water & Power Use

The Lone Star State is a major hub for new data centers, with at least 248 facilities planned and 224 already in operation across cities such as San Antonio, Fort Worth, Austin, and Dallas. This scale of data center construction has intensified local scrutiny, particularly around power usage and water sourcing. Texas maintains a sales tax exemption for qualified data centers, while the standard sales tax rate remains 6.25%. The state's industrial electricity rates are competitive at $0.0626/kWh, with power sourced from a mix of approximately 50% natural gas, 25% wind, 12% coal, 9% nuclear, and a small but growing solar share. As electricity consumption grows fastest in Texas, the Electric Reliability Council of Texas (ERCOT) is tasked with grid control and oversight of industrial demand. Recent policies require crypto mining facilities, and by extension, future next generation data centers, to register power usage for regulatory review. Solar power is playing a larger role in powering new data centers, exemplified by facilities in cities like San Antonio and Austin sourcing electricity from new, in-state solar plants. However, local governments and residents, notably in Fort Worth and Hood County, are pressing for moratoriums or stricter review of new data center construction while water and utility impacts are assessed. Concerns about water demand for cooling, alongside the overall scale of construction, have prompted county-level authorities in Hood County to consider leveraging legal tools to slow development until impacts on public health and local infrastructure are reviewed. This underscores the need for careful diligence regarding site selection and community alignment, especially as Texas Tribune and other observers report ongoing debate over the sustainability footprint of next generation digital infrastructure across fast-growing Texas cities.

Local Development Review

In Texas, new regulatory measures require crypto mining facilities using the ERCOT grid to officially register their power usage with state regulators. This rule, approved by the Public Utility Commission in November, aims to increase oversight of energy consumption in this fast-growing industry.

Market Access, Business & Tax Climate

The qualifying owner, operator and/or occupant of a qualifying data center are responsible for notifying the Comptroller once all 20 jobs have been created using a properly completed Form 01-160, Qualifying Data Center or Qualifying Large Data Center Project Job Creation Report (PDF) . Buyers should verify how jobs affects scope, timing, service obligations, and local diligence before relying on it for deployment planning.

Texas remains an area of significant activity for data center development, driven by a mix of favorable business conditions, a diverse power portfolio, and a large inventory of operational and new data centers. The state is home to 224 data centers, managed by 130 providers, with at least 248 new data centers currently planned. Infrastructure is extensive, offering 146 cloud on-ramps, 457 networks, and 24 internet exchanges, including BBIX Dallas and BGP Exchange Dallas. Major cities such as Dallas, Austin, San Antonio, and Fort Worth feature prominently in the current expansion, reflecting the state's widespread connectivity and access to critical communications networks.

The Lone Star State draws technology operators by combining a 6.25% sales tax with targeted sales and use tax exemptions for qualified data center development projects. Annual tax breaks have surpassed $1 billion according to Texas Tribune research, making it one of the most aggressive tax environments for the sector. The creation of at least 20 jobs is a regulatory requirement for qualifying facilities, with operators responsible for reporting directly to state authorities. This mechanism ensures that business investments in data center construction contribute to local job creation, and the scale of planned projects signals more jobs ahead. Across Texas, new data centers serve as catalysts for next generation IT and business infrastructure, with private and public cloud options anchored by facilities in cities such as San Antonio.

Texas's power market is closely linked with ERCOT, which controls the state grid and ensures that most industrial loads - including high-density data centers - have transparent access to both energy mix data and real-time regulatory guidance. Industrial power pricing in Texas remains highly competitive at $0.0626/kWh. The grid draws roughly 50% of its power from natural gas, about 25% from wind, 12% coal, and 9% nuclear, with a small but growing solar share, demonstrated through projects such as a U.S.-made solar plant supplying power to data centers. With conversion of retired generation and network upgrades underway, Texas continues to adapt for next generation demands.

Data center buildout is directly shaped by local governments and community stakeholders. In cities such as Fort Worth, residents have formally requested moratoriums on new data center construction, with public meetings extending for several hours and county commissioners deploying unique local authority to monitor impacts on water, infrastructure, and public health. Hood County and other jurisdictions have exercised similar controls, and hearings in July and beyond are expected to review the broader business and tax climate for future projects. Despite this, the steady growth in both centers and jobs highlights ongoing demand.

Risk considerations for buyers center on natural disasters, which remain low relative to national benchmarks. The FEMA NRI score for Texas is 43.5/100 (Moderate), reflecting meaningful but manageable exposure compared with major coastal hubs. Industrial buyers and operators gain access to a substantial network supply, diverse market access via cloud on-ramps and network carriers, and the opportunity to leverage both the scale and local economic incentives unique to Texas.

Economic Development Review

To promote economic buildout, Texas requires qualifying data centers to create at least 20 jobs and notify the Comptroller upon reaching this threshold using the designated reporting form. This reporting ensures accountability for job creation linked to data center incentives.

Community Review

Public sentiment in Texas, particularly in areas like Hood County and Fort Worth, reflects substantial concern about rapid data center expansion. Dozens of residents have called for a moratorium on construction, leading to lengthy public meetings and ongoing requests for officials to use regulatory authority to pause projects while further study is conducted on potential impacts to water, infrastructure, and public health.

Natural Disaster Risk

Texas holds a moderate FEMA natural disaster risk score of 43.5/100, with hazards such as extreme heat, hail, hurricanes, drought, inland storm events, lightning, and wildfire remaining present for data center construction and operation. The region's risk profile has supported continued buildout of new data centers in cities like Dallas, Austin, Fort Worth, and San Antonio, with at least 248 additional centers planned across the Lone Star State. However, site diligence must still consider local factors such as water availability and heat events, which have led some local governments - especially in Fort Worth and Hood County - to review or pause construction projects pending impact analysis. Energy infrastructure, including the Electric Reliability Council of Texas (ERCOT) grid, has faced scrutiny due to data center demand and next generation business loads, prompting further oversight of power consumption and reliability. With growth accelerating, stakeholders should weigh both region-wide risk context and the influence of rapid urban and business buildout on local conditions when assessing sites for new data centers in Texas.

Frequently Asked Questions

Where are the primary data center clusters or regions in Texas?

The primary data center clusters in Texas are concentrated around the cities of Dallas, Austin, San Antonio, and Fort Worth, with significant buildout in these urban regions. Dallas serves as a major hub, featuring a dense network of data centers and internet exchange points such as BBIX Dallas and BGP Exchange Dallas. Austin and San Antonio are also prominent, with new data centers and next generation data center construction meeting growing business demand. Fort Worth's data center construction has recently come under debate, as reported by Texas Tribune, with local governments considering moratoriums due to resident concerns. Throughout the Lone Star State, more than 248 data centers are planned or under construction, reflecting robust demand and the oversight of the Electric Reliability Council of Texas in managing electricity needs for these facilities.

What types of network connectivity are available to data centers in Texas?

Data centers in Texas benefit from a broad range of network connectivity, including direct access to 457 networks, Ethernet Private Line offerings from 61 providers, and connectivity solutions such as dark fiber, IP transit, and dedicated internet access supported by 130 providers. Major cities like Dallas, Austin, San Antonio, and Fort Worth serve as connectivity hubs, with facilities such as 1011 San Jacinto and 1100 Empire Central Pl integrating with cloud regions and on-ramps. The presence of 24 internet exchanges, including BBIX Dallas and BGP Exchange Dallas, supports high-performance interconnection and latency-sensitive business workloads. As new data centers are constructed in the Lone Star State, ERCOT ensures power grid support for next generation connectivity demands across urban and regional communities, while local governments in places like Fort Worth and San Antonio review infrastructure and business impacts. Data centers in Texas thus have access to a robust, scalable network environment, supporting both enterprise and cloud-native requirements for modern business.

How does Texas compare in terms of natural disaster risk for data center operations?

Texas registers a moderate natural disaster risk for data center operations, with a FEMA National Risk Index score of 43.5/100. While the Lone Star State's principal risks include hail, hurricanes, drought, high winds, lightning, and wildfire, ongoing data center construction in cities such as Fort Worth, Austin, Dallas, and San Antonio indicates continued strong demand despite these threats. Data centers in Texas are managed with consideration for both disaster recovery and infrastructure resilience, with the Electric Reliability Council of Texas (ERCOT) overseeing nearly all of the state's electricity demand. Local governments, especially in urban areas like Fort Worth and San Antonio, sometimes debate the impact of new data centers, but robust controls and next generation facilities continue to expand across the state. According to Texas Tribune, at least 248 new data centers are planned, further highlighting the economic value the state places on this sector. Overall, Texas's risk is moderate and concentrated in well-understood hazards, which operators mitigate through hardened design.

What is the presence of colocation and hyperscale data centers in Texas?

Texas has a robust concentration of colocation and hyperscale data centers, supported by 224 facilities and 130 providers across major cities like Dallas, Austin, San Antonio, and Fort Worth. The data center construction pipeline is significant, with at least 248 new data centers planned according to research cited by the Texas Tribune. Next generation facilities featuring cloud on-ramps, advanced network connectivity, and a diversity of providers serve growing demand from businesses in the Lone Star State. ERCOT manages the bulk of the region's electricity needs as demand accelerates, largely due to the expansion of these centers. Local governments - including in Fort Worth and Hood County - have responded with discussions on permitting, infrastructure costs, and moratoriums as data centers in Texas increase alongside costs and resource control matters. San Antonio, among other cities, continues to see multiple new data centers under construction, reflecting statewide momentum in next generation infrastructure and business investment.

What local review factors matter for data center development in Texas?

Key local review considerations for data center construction in Texas include regulatory oversight by local governments, power availability, and community sentiment. Cities across the Lone Star State, particularly Fort Worth and San Antonio, have seen residents request moratoriums and public hearings to address growth in new data centers, impacts on water demand, and infrastructure. ERCOT manages nearly all electricity usage for next generation data centers in Texas, and state-level rules now require crypto and high-density users to register power usage. Local incentives, such as sales and use tax exemptions for qualified data centers, factor into business costs, but recent Texas Tribune coverage notes ongoing legislative reviews of these policies. Job creation reporting is another requirement for operators. Community and local government review - along with electricity costs, permitting, and responses to growing power demand - directly affect the planning, approval, and construction timelines for data centers in Texas' major cities like Austin, Dallas, San Antonio, and Fort Worth.

Why does power usage matter for data centers in Texas?

Electric service usage is a critical issue for data centers in Texas because the surge in construction of new data centers and next generation facilities is driving up demand on the electric grid managed by the Electric Reliability Council of Texas. Key cities like Austin, Dallas, San Antonio, and Fort Worth are seeing rapid investment in data center construction, leading to significant electricity needs. This has prompted attention from both local governments and the public, with communities such as Fort Worth discussing moratoriums and local governments in Hood County reviewing regulatory authority to control data center growth due to concerns over electric service demands. The Texas Tribune reports at least 248 data centers are planned across the Lone Star State, intensifying questions about electricity costs, infrastructure, and grid reliability. As electricity consumption in Texas rises faster than in other states, managing electric service usage is essential for meeting business needs and ensuring sustainable growth.

Why does solar power matter for data centers in Texas?

Solar electric service matters for data centers in Texas because rapid growth in new data centers is driving high demand for electricity, and ERCOT, which manages most of the Lone Star State's grid, is under significant strain as both usage and data center construction surge. With at least 248 data centers in planning in Texas - especially around rapidly developing cities like Austin, Dallas, San Antonio, and Fort Worth - transitioning to next generation renewable sources like solar electric service helps control costs and diversify the state's energy mix. As electricity consumption in Texas rises faster than anywhere else in the United States, solar electric service aids local governments in meeting sustainability and business goals while supporting grid stability for businesses and communities. Recent projects, such as a U.S.-made solar plant supplying major data centers, highlight industry efforts to address Fort Worth resident concerns and ensure reliable service as regulatory oversight increases.