Texas is experiencing an unprecedented data center construction boom, with at least 248 projects planned across the state driven by surging demand for artificial intelligence infrastructure. The growth brings both economic opportunity and resource challenges for Houston and other Texas communities.
According to a Texas Tribune analysis of data from Cleanview and Data Center Map, Texas currently has 335 existing data centers with 248 more in the pipeline. The state does not track data center developments, making comprehensive data difficult to obtain.
The projects are concentrated in several regions: 86 planned for North Texas, 56 for Central Texas, and 45 for West Texas. Nearly half of the planned facilities are set for unincorporated areas, where county governments typically lack zoning authority to regulate development.
Gov. Greg Abbott, who previously called Texas an “epicenter” of AI development, announced in June that regulating the industry would be a priority for the 2027 legislative session. The shift reflects growing concerns about the strain data centers place on water and energy resources.
Data centers require immense power for computing and significant water for cooling servers. The Texas Public Utility Commission sent out a water usage survey, but less than a third of companies responded, Houston Public Media reported.
Industry representatives argue the boom brings economic benefits. Amazon Web Services touts increased construction jobs, renewable energy investments, and community spending. Meta announced a free job training program in June that will include Texas as a pilot location.
However, critics point to the billions in tax breaks data centers have received. “The industry has long relied on non-disclosure agreements and on not having any rules or requirements for their disclosure and reporting,” said Rachel Hanes, policy director at Greater Edwards Aquifer Alliance.
The data center industry argues that tax incentives are necessary to maintain investment in the state. Dan Diorio, vice president of state policy for the Data Center Coalition, said Texas’s business-friendly regulatory environment, available land, and fiber infrastructure attracted the projects.
Nearly 60% of planned data centers are in state House districts that voted for President Trump and elected a Republican representative in 2024, adding a political dimension to the regulatory debate ahead of the 2027 legislative session. Some Republican lawmakers have already signaled openness to reforms, including potential restrictions on the tax breaks that have attracted data centers to the state.
The water consumption issue is particularly acute in unincorporated areas, where data center developers increasingly choose to build because counties lack the zoning authority that cities use to regulate development. In Hood County, local residents have raised concerns about groundwater depletion as data center projects move forward without comprehensive environmental review.
For Houston, the data center boom presents a mixed picture. The city’s energy expertise and industrial workforce position it to benefit from the construction and operational jobs that data centers create. However, the region’s own water and power infrastructure is already strained, and the addition of large-scale data center loads could require significant grid upgrades. The outcome of the 2027 legislative session will likely determine whether Texas continues its rapid data center expansion or applies brakes to manage the impact on resources and local communities.
