Central Texas Just Became America's Data Center Capital

More than 400 data centers are now operating or under construction in Texas, and the biggest names just planted flags inside an hour of Austin.

A new UT Austin Jackson School white paper projects Texas data centers will jump from under 1% of state water use today to 3% to 9% by 2040. The buildout is concentrated right around us: Amazon just closed on 1,300 acres in Bastrop, Tract doubled its Caldwell County campus to 3,000 acres and 4 gigawatts of capacity, Guadalupe County approved Cloudburst's $14.5B project, and Switch is filing for a second Round Rock site next to Dell.

Here is what Austin builders should know:

• Power gets tighter. ERCOT's interconnection queue now has more natural gas projects than wind for the first time in 10 years. Expect longer wait times and higher firm-capacity costs for any business that needs serious electricity.
• Trades get poached. Texas homebuilders are already losing electricians to data center contractors. If you are building out anything in the next 18 months, price in 15-30% bumps on skilled labor.
• Land gets reshuffled. Industrial real estate in Bastrop, Caldwell, and east Travis is heating up fast. Good news if you own. Tougher comp if you lease.

The upside: if your business sells into the AI infrastructure stack (power, water treatment, cooling, fiber, dev tools, trades), the next five years are the best window you will see. Plan accordingly.