Texas could soon become the world's biggest data center market

Texas has spent a century perfecting one specialty: turning raw energy into an export. Now, it is trying to export something newer and somewhat stranger: compute, packaged as vast, windowless buildings that behave like industrial plants, just with fewer smokestacks and more servers.

A new report from JLL says Texas, treated as a single market, could overtake Northern Virginia and become the world’s largest data center market by 2030. JLL counts more than 35 gigawatts of capacity under construction in North America, with 64% of that build landing in “frontier markets” outside the classic hubs. 

“Frontier markets” are where developers can still find three things at once. Power. Land. A clear path to permits. Texas checks those boxes, and JLL points to the state’s energy resources, land availability, and operating environment as the ingredients. Texas alone has 6.5 GW under construction, which is why the state keeps popping up as the punchline to “the cloud” finally admitting it needs land.

But there’s still a Texas-shaped question: Where does all the power come from, and how fast can it come? Grid connection timelines are slow enough that developers are increasingly building around the grid instead of waiting for it. 

JLL points to grid connection timelines averaging four years or longer, plus scarce availability in mature markets, which forces big tenants to reserve capacity years ahead. Developers are leaning on interim power strategies while the grid catches up, and the report’s rebuttal to bubble chatter is that vacancy is 1% for a second consecutive year — and JLL says 92% of capacity under construction is already precommitted through binding leases or owner-occupied builds. 

There has also been a rise of private, off-grid power plants paired with data centers, a parallel energy system built to keep AI infrastructure on schedule. A shadow power grid of off-grid projects, heavily reliant on natural gas, is emerging as tech companies chase faster timelines and insulation from public-grid constraints. 

Texas’ grid numbers explain the anxiety. ERCOT data put Texas data centers’ maximum power demand at about 8 GW in 2025 versus the state grid’s peak demand of 94 GW, a meaningful slice that also has plenty of room to grow. A separate industry report from Bloom Energy points to how quickly forecasts are being revised, noting that ERCOT increased its 2030 estimate of data center growth from 29 GW to 77 GW.

Utilities are responding with checkbooks. 

CenterPoint Energy $CNP, which serves much of the Houston area, raised its 2026–2035 capex plan to $65.5 billion and said it plans to deliver about 10 gigawatts of new load by the end of the decade, with peak load expected to hit a 50% increase by 2029. CEO Jason Wells says large projects “help us keep our rates affordable.” Then, there’s the constraint that refuses to stay abstract: water. HARC estimates Texas data centers used about 25 billion gallons in 2025 and projects 29 to 161 billion gallons annually by 2030, as much as 2.7% of Texas’ total water use.

Local politics are catching up to the math. Communities across Texas have been increasingly alarmed by the scale of proposed campuses and the resources they demand, even as local governments say state law limits how much control they have. In San Marcos, the city council rejected zoning changes needed for a $1.5 billion data center after residents warned about drought and environmental strain.

Outside the state, public pushback is getting louder, mostly because people hear “data center boom” and picture the cost of living getting another line item. In New Brunswick, New Jersey, the city council voted Wednesday night to kill plans for a proposed AI data center at 100 Jersey Avenue after hundreds of residents showed up worried about higher electric and water bills. 

And nationally, the politics have flipped fast enough to pull President Donald Trump into the same lane: He has claimed that data centers should “pay their own way” on electricity, as backlash grows over who funds grid upgrades and whether household rates end up subsidizing Big Tech’s buildout.

Texas may well end up wearing the data-center crown by 2030. But “data center capital” is a billing address that has to catch up to an industry moving at venture speed. Data centers keep getting sold as sleek, digital progress. The backlash keeps sounding stubbornly analog: power prices, water draws, and a growing suspicion that somebody’s subsidizing somebody.