Texas is positioning itself to become the world’s largest data center market by 2030, potentially surpassing Northern Virginia’s long-held dominance, according to new research from Jones Lang LaSalle (JLL).
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The findings underscore how rapidly the artificial intelligence boom is reshaping America’s digital infrastructure landscape. For more than 15 years, Northern Virginia has been considered the global epicenter of data centers, largely due to its proximity to government agencies, dense fiber networks, and early cloud computing adoption. But that dominance is now being challenged as hyperscalers aggressively expand across new regions.
Amazon, Microsoft, Google, and Meta are expected to collectively spend more than $600 billion on AI infrastructure expansion in 2026 alone. That scale of investment has heightened Wall Street’s focus on whether the rapid buildout signals sustainable demand — or early signs of an AI bubble.
According to JLL’s North America Data Center Report — Year-End 2025, more than half of all US data center construction is now occurring outside traditional hubs like Northern Virginia. Emerging markets include Tennessee, Ohio, Wisconsin, and, most notably, Texas.
Texas alone currently has 6.5 gigawatts of data center capacity under construction. That represents roughly one-fifth of the 35 gigawatts added to the national pipeline — a surge that would nearly double the country’s existing capacity if completed.
To put the scale in perspective, 35 gigawatts is roughly equivalent to the annual electricity consumption of the United Kingdom or Italy. The energy intensity of AI workloads, particularly large language models and generative AI platforms, has dramatically increased the urgency for new power-ready sites.
Texas offers a combination of land availability, business-friendly policies, and abundant energy resources that few states can match. Developers are drawn to large tracts of relatively affordable land, streamlined permitting processes, and competitive tax incentives.
The state is also home to some of the most ambitious AI infrastructure projects underway. Oracle and OpenAI are developing the flagship Stargate data center in Abilene. Meanwhile, Google has outlined plans for a $40 billion expansion in West Texas, and Meta is constructing a major new campus in El Paso.
Energy availability has become one of the most decisive factors in site selection. AI data centers consume enormous amounts of electricity, straining regional grids. In Texas, some projects — including Stargate — are being developed alongside on-site power generation facilities, offering greater reliability and insulation from grid bottlenecks.
By contrast, Northern Virginia’s grid constraints and land scarcity have slowed new development in what was once the uncontested leader of global data center capacity.
The shift reflects a broader decentralization of digital infrastructure. As hyperscalers hunt for scalable power, cheaper land, and geographic diversity to reduce risk, the industry’s footprint is spreading across the country.
Beyond Texas, states like Tennessee, Ohio, and Wisconsin are also gaining traction, benefiting from industrial land availability, expanding renewable energy portfolios, and attractive incentive packages.
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The data suggests the transformation may be structural rather than cyclical. The AI boom is not only increasing computing demand but changing the type of facilities required — larger campuses, higher-density racks, and integrated power solutions.
If Texas maintains its current development pace, JLL projects it could surpass Northern Virginia as the largest global data center market by 2030 — a symbolic turning point in the evolution of US digital infrastructure.
While questions remain about the long-term sustainability of AI-driven capital spending, one thing is clear: the map of American data center development is being redrawn, and Texas is at the center of that transformation.
Originally reported by Ellen Thomas in Business Insider.
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