Texas Forecast to Be Top Market for Data Centers

Texas is poised to become the largest home for data centers in the country within the next three years as artificial intelligence continues to boom, according to a report published Tuesday.

Bloom Energy, a California-based company that provides onsite power generation for electricity-guzzling data centers, also found that the grid demand driven by data centers in Texas is expected to exceed 40 gigawatts by 2028. The report is based on a survey of both electric utilities and data center developers that was conducted throughout much of last year.

In 2025, data centers in Texas had a maximum power demand of about 8 GW, compared to the state grid’s peak energy demand of 94 GW, according to the Electric Reliability Council of Texas, which manages the grid. One gigawatt is enough to energize about 700,000 homes for a year.

Texas currently has about 387 data centers scattered across the state.

Drawn by cheap gas, available land, and a regulatory market more friendly to natural gas power, companies are flocking to Texas to build more data centers that will support the growth of the artificial intelligence industry.

The growth of data centers in Texas is projected to outpace any other state in the country over the next several years, propelling Texas above other top markets with tighter regulations on new gas power generators, like Oregon and California, according to Bloom Energy.

Data centers are also getting larger. By 2030, one in five data centers are expected to exceed 1 GW in maximum energy demand. By 2035, that number is expected to be one in three of all data centers, according to Bloom Energy.

Nationally, the maximum energy demand by data centers was about 80 GW in 2025 and is expected to balloon to 150 GW in 2028, according to Bloom Energy. The rate of growth is causing issues as expectations by developers seeking power for data centers run into limitations by the utilities that provide that power, Bloom Energy found. Developers in Texas that responded to the survey typically expected to be connected to the grid about a year before the utility expected to have that power available.

The company found that disconnect between power providers and data center developers is only widening as demand for the centers increases.

“Power can no longer be treated as a downstream consideration,” read the report. “Operators that continue to plan projects around traditional grid assumptions risk falling behind on both schedule and scale.”

To circumvent those issues, more data centers are relying on power plants developed alongside and attached to new data centers, like the fuel cells Bloom Energy creates or natural gas power plants. About one-third of all data centers are expected to have onsite power generation by 2030, according to the report.

“Grid power is not easily available at all and prices have gone up,” said Aman Joshi, chief commercial officer at Bloom Energy. “As you think about onsite generation, no matter where you are in the U.S., 100% of onsite generation is largely happening with natural gas and Texas certainly has a lot of access [to gas].”

This article first appeared in The Texas Tribune.