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Data Centers in Texas

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Explore Markets in Texas

Texas – America’s Digital Infrastructure Hub

Texas is a primary US data center market, essential for any organization requiring low-latency access to the central United States and Latin America. With over 225 facilities and highly competitive power costs, the state provides a reliable and scalable foundation for growth-critical applications. This massive ecosystem ensures uptime and performance, directly supporting revenue and customer experience.

Texas: At A Glance

FactorRating / DataNotes
Global Connectivity GradeA+Excellent carrier density and extensive fiber routes across the state.
Direct Cloud On-RampsOver 14 — as of September 2025Direct access to AWS, Azure, Google Cloud (GCP), IBM Cloud, Oracle Cloud.
Power Cost$0.09/kWh — as of September 2025Competitive pricing supports high-density deployments and lowers operational expenses.
Disaster RiskModerate (Score: 43.46) — as of September 2025Major risks include severe storms, hail, and drought. Site selection is key.
Tax IncentivesYesState sales and use tax exemptions are available for qualified data center projects.
Sales Tax6.25% — as of September 2025State-level sales tax; local taxes may also apply.

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: The Texas market features a rich and competitive environment with approximately 85 carriers operating within the state, as of September 2025. This density ensures that businesses have multiple options for transit, transport, and peering, preventing vendor lock-in and controlling costs.

Direct Cloud On-Ramps: Over 14 dedicated on-ramps provide direct access to 19 cloud regions, as of September 2025. These private connections bypass the public internet, offering lower latency and higher security for hybrid cloud workloads. Major providers include AWS, Microsoft Azure, Google Cloud (GCP), IBM Cloud, and Oracle Cloud.

Internet Exchange Points (IXPs): Most interconnection occurs in the Dallas-Fort Worth metro, home to major IXPs like DE-CIX Dallas, which facilitates low-latency traffic exchange. This dense peering environment is critical for content delivery, gaming, and financial services that depend on split-second performance.

Bare Metal: Bare metal services are readily available from providers like Hivelocity and phoenixNAP, offering dedicated compute for performance-sensitive workloads.

Power Analysis

Average Cost Of Power: The average industrial electricity rate is approximately $0.09/kWh, as of September 2025. This competitive rate significantly reduces total cost of ownership for power-intensive infrastructure, making Texas attractive for large-scale and high-performance computing deployments.

Power Grid Reliability: Major data center clusters in cities like Dallas, Austin, and Houston are served by well-engineered grids with redundant substation support. While the statewide grid faces unique challenges, mission-critical facilities are built with extensive on-site power generation and resiliency to meet uptime requirements.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers are concentrated near major business hubs like Dallas-Fort Worth, Houston, Austin, and San Antonio. This proximity provides low-latency connectivity to the state's thriving finance, energy, healthcare, and technology sectors.

Regional Market Reach: Texas serves as a strategic hub for reaching over 40 million people within the state and provides a critical gateway to markets across the central United States and Latin America. Its central location makes it an ideal disaster recovery site for operations on either US coast.

Tax Advantage For Data Centers: Texas offers significant tax incentives, including a state sales and use tax exemption on equipment and software for qualifying data centers. This program directly lowers the capital expenditure required for new builds and major technology refreshes, improving the financial case for investing in the state.

Natural Disaster Risk

Texas has a Moderate natural disaster risk profile, with a National Risk Index score of 43.46, as of September 2025. Key environmental risks for infrastructure planning include hurricanes (primarily coastal), severe thunderstorms with hail, drought, and extreme heat waves. Winter storms and riverine flooding are also significant considerations in certain regions.

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