Texas Set to Become the World's Biggest Data Center Hub by 2030
Texas's reputation for doing things on a grand scale now also applies to its data centers. The state is predicted to overtake Virginia and become the largest data center market globally within the next decade.
This remarkable transformation hints at the significant changes that the data center boom has brought to the U.S. digital infrastructure map and the landscape in general. Prominent tech companies are projected to invest over $600 billion in AI infrastructure expansion by 2026. This astonishing figure has caused quite a stir in financial circles where worries of an AI bubble are mounting.
Data Center Construction Expands Beyond Traditional Hubs
Interestingly, more than half of all data center construction in the U.S. is now happening outside the industry's traditional hubs. States like Tennessee, Ohio, Wisconsin, and Texas are emerging as top markets for data center development.
Remarkably, Texas alone currently has 6.5 gigawatts of data center capacity under construction. To put that into perspective, this power capacity is equivalent to more than three Hoover Dams or over 17,000 electric cars, based on the U.S. Department of Energy's standard. It also represents about one-fifth of the 35 gigawatts of data center capacity that the U.S. added to its pipeline.
That 35 gigawatts is roughly the same as the annual electricity consumption of the UK or Italy. Incorporating it would almost double the existing data center capacity in the U.S.
Why Texas?
So, why is Texas becoming so popular for data center projects? One of the primary reasons is the state's vastness. Texas is home to some of the country's most ambitious data center projects. For example, one major tech firm has an impressive Stargate data center in Abilene, while another company is planning a colossal $40 billion expansion in West Texas. Furthermore, a leading social media company is constructing a huge new site in El Paso.
Besides its size, Texas also has ample energy resources, which is a boon for data center developers. The soaring demand for electricity due to the AI boom has put a strain on the nation's power grid. In Texas, several data centers, including the Stargate project, are being built together with on-site power plants.
The Changing Landscape of Data Centers
For over 15 years, Northern Virginia has been the central hub for the data center industry, dating back to the early days of cloud computing. However, this is changing quickly as tech giants spread across the country in search of available power, affordable land, and the most attractive tax incentive packages for the upcoming wave of AI data centers.