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The Changing Data Center Dynamics.
AI isn’t abstract anymore.
It’s steel, concrete, and megawatts — and Texas sits at the center of this build-out.
Why Texas Is the New Gravity Well
Population keeps moving here.
Workers, founders, and families keep coming.
That growth feeds digital demand — and expands the tax base and labor pool.
In 2024, seven of America’s fifteen fastest-growing cities were in Texas. Houston alone added more people than any U.S. city except New York.
More people means more compute.
More compute means more power.
And more power now drives site selection decisions across the state.
Power Is the Binding Constraint
The grid is catching up.
ERCOT’s large-load interconnection requests jumped from 56 GW in 2024 to about 205 GW this fall — more than twice Texas’ all-time peak demand.
Across the U.S., power use is breaking records as AI and data-center growth push utilities to the limit.
Utilities like Oncor report over 600 active commercial interconnection requests, up roughly 60% year over year.
Power availability — not just land — now defines investment timelines.
Land Is No Longer “Just Land”
Hyperscale buyers want power-proximate acreage.
They look for dual feeds, fiber access, water optionality, and community support.
Texas checks most boxes: large tracts, right-to-build culture, and strong connectivity.
But communities weigh trade-offs.
In College Station, a proposed 600-MW campus was rejected amid public concern over water, noise, and grid strain.
Contrast that with the Austin–San Antonio corridor, where new megawatts under construction continue to climb as utilities commit billions to expansion.
Grid Upgrades and Workarounds
Transmission is the choke point.
ERCOT and the PUCT have endorsed new 765-kV corridors, many led by Oncor.
This is the backbone AI workloads will depend on.
Still, lead times stretch years.
Developers are bridging early phases with behind-the-meter gas, modular turbines, and battery storage.
Turbine supply itself is becoming a gating factor.
Cooling and load-management tech is improving efficiency — but even the EIA expects commercial energy intensity to rise as compute density spreads.
Where in Texas Makes Sense
North Texas: deep labor pool, robust transmission, rail and highway logistics, and increasing south-Dallas build-to-power campuses.
Central Texas: fiber access and talent concentration around Austin–San Antonio, scaling with utility upgrades.
West Texas: abundant gas and contiguous land for hybrid on-site generation — a different play entirely.
Investor and Operator Playbook
- Start with power, not dirt. Map 345 kV and 138 kV lines, substations, and interconnection queues before you walk a site.
- Tie schedules to interconnection reality. Phase energization; secure turbines or batteries early.
- Underwrite community fit. Address water, noise, and traffic early in entitlement.
- Follow the people. Texas’ migration and job growth are durable long-term demand drivers for compute and talent.
Bottom Line
AI runs on electrons and land.
Texas has both — and the demographic momentum to use them well.
The winners will be those who align power, permits, and parcels with discipline and patience.
Do that, and Texas remains the home field of the AI infrastructure build-out.