Texas Surpassed Other States in Data Center Construction

Texas has moved ahead of national leaders as new capacity projects surge across the state.

Updated on Oct. 1, 2026 in Data Centers

Isometric editorial illustration showing a modular server building and cooling infrastructure on a flat landscape, representing Texas data center growth. — Texas currently leads the nation in data center construction, with 6.5 gigawatts of new capacity projects underway across the state. AI Illustration. Upload story photo >

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Texas now leads the nation in data center capacity under construction, with 6.5 gigawatts currently being built. This rapid development positions the state to potentially overtake Virginia as the world largest data center market by 2030.

Why it matters

Texas attracts massive investment due to abundant available land and a robust electricity supply, providing a necessary alternative as Northern Virginia faces a deepening power crunch and record-low vacancies.

Texas currently hosts 4 gigawatts of existing capacity, while Virginia remains the largest established market with 8 gigawatts. Across North America, 92 percent of all data center capacity currently under construction is already pre-committed by tenants.

The players

Greg Abbott

He is the Governor of Texas who recently directed the Public Utility Commission and ERCOT to audit power requests from data centers.

Public Utility Commission of Texas

This is the state agency responsible for regulating the electric and telecommunications utilities in Texas.

ERCOT

The Electric Reliability Council of Texas manages the flow of electric power to more than 26 million Texas customers.

The details

Developers in Texas successfully secure approvals through a regulatory system where counties lack traditional zoning authority, facilitating faster project realization. Tenants are securing capacity years in advance, with new lease agreements now including annual rent escalations of at least 3 percent.

Since 2020, data center rents have increased by 60 percent.
Data center rents rose 9 percent throughout 2025.
Austin recorded 1,909 megawatts of positive absorption in Q1 2026.
Governor Greg Abbott ordered an audit of data center power requests on August 3, 2026.
Texas is projected to overtake Virginia in capacity by 2030.

Roadmap

The shift in data center construction toward Texas reflects a broader migration as primary hubs like Northern Virginia hit critical infrastructure ceilings. This expansion marks a permanent transition in the industry, moving from concentrated coastal sites to regions with more flexible power and land availability.

Rising demand and limited power availability are driving data center rents higher, with costs increasing 60 percent since 2020. Local residents and businesses may see continued pressure on the regional power grid as energy-intensive facilities continue to scale up across Texas.

The takeaway

The rapid expansion of Texas data centers highlights a critical shift in how high-tech infrastructure competes for local energy resources. Stakeholders should monitor state audit results to understand how future power allocation policies might affect the pace of regional digital growth.