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Data Centers in Texas

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Explore Markets in Texas

Texas – America’s Digital Crossroads

Texas is a top-tier market for any enterprise needing large-scale data center capacity with excellent national and international connectivity. Its central location, competitive power costs, and massive infrastructure make it a strategic hub for disaster recovery and serving latency-sensitive applications across North America and into Latin America. This is where you build for scale and resilience.

Texas: At A Glance

FactorRating / DataNotes
Global Connectivity GradeA+One of the most connected markets in North America.
Direct Cloud On-RampsOver 14 – as of September 2025AWS, Azure, Google Cloud (GCP), IBM, and Oracle have dedicated access points statewide.
Power Cost$0.09/kWh – as of September 2025Industrial rates are highly competitive for a major US market.
Disaster RiskModerate (43.46) – as of September 2025Primary risks are weather-related; geologic and seismic risks are very low.
Tax IncentivesYesState sales and use tax exemptions are available for qualified data centers.
Sales Tax6.25% (State) – as of Midyear 2025Local taxes can increase the total rate, but exemptions reduce this burden.

Network & Connectivity Ecosystem

Texas is a powerhouse of connectivity, rivaling any market in the United States. With major hubs in Dallas and Houston, the state serves as a critical peering and interconnection point for the entire continent.

Carrier Density & Carrier Neutrality With over 225 data centers, Texas provides access to more than 80 unique network service providers as of September 2025. This deep carrier density ensures competitive pricing and extensive options for creating redundant, high-performance network architectures in facilities that are overwhelmingly carrier-neutral.

Direct Cloud On-Ramps The state features over 14 dedicated cloud on-ramps providing direct, low-latency access to 19 distinct cloud regions as of September 2025. Major providers with a physical network presence include:

  • AWS
  • Google Cloud (GCP)
  • Microsoft Azure
  • IBM Cloud
  • Oracle Cloud

Internet Exchange Points (IXPs) The Dallas-Fort Worth area is a primary hub for peering, hosting major exchanges like the DE-CIX Dallas and Equinix IX Dallas. These exchanges facilitate efficient traffic exchange between networks, reducing latency and transit costs for content, cloud, and enterprise networks.

Bare Metal Bare metal server options are widely available from numerous providers in Texas. Companies like Hivelocity and phoenixNAP offer dedicated server solutions for workloads requiring maximum performance and security without a virtualization layer.

Power Analysis

Texas offers a unique and highly competitive power landscape, driven by its independent grid and diverse energy sources.

Average Cost Of Power The average industrial electricity rate is approximately $0.09/kWh as of September 2025. This competitive pricing, especially for large-scale deployments, provides a significant operational cost advantage compared to other primary US data center markets.

Power Grid Reliability The Texas grid (ERCOT) is independent, which presents both opportunities and challenges. Major data center corridors in Dallas, Houston, and Austin feature well-engineered power infrastructure with multi-substation support and high levels of redundancy to ensure uptime. The state's energy mix includes substantial contributions from natural gas, wind, and solar.

Market Access, Business & Tax Climate

Texas combines a pro-business regulatory environment with access to massive economic zones, making it a strategic location for digital infrastructure.

Proximity To Key Business Districts Data centers are strategically located near major business districts in Dallas (Plano, Richardson), Houston (Energy Corridor), Austin (Silicon Hills), and San Antonio. This proximity serves finance, healthcare, energy, and technology sectors that require low-latency connections to their compute infrastructure.

Regional Market Reach From its central location, Texas provides excellent low-latency network access to over 60 million people across the South and Midwest. It also serves as a primary network gateway to Mexico and other markets in Latin America.

Tax Advantage For Data Centers Texas offers a significant sales and use tax exemption on equipment and software for qualified data center projects. This incentive directly reduces the capital expenditure required for building out or expanding a large-scale computing environment, improving the total cost of ownership.

Natural Disaster Risk

Texas has a Moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.46 out of 100 as of September 2025. The risks are almost entirely weather-driven, with very low exposure to seismic events.

Key environmental risks for consideration include:

  • Hurricane: A primary risk for coastal areas like Houston, with inland impacts from associated rainfall and wind.
  • Drought & Heat Wave: Common conditions that can stress power and water resources during summer months.
  • Hail & Lightning: Severe thunderstorms, particularly in the Dallas-Fort Worth area, can pose a threat to physical infrastructure.
  • Winter Weather & Ice Storms: Can disrupt transportation and place significant strain on the state's power grid.
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