The soaring demand for massive data centers to support artificial intelligence is driving a new infrastructure boom, with Texas emerging as a key hub in this digital transformation.
With its affordable electricity, vast land availability, and pro-business policies, Texas has become a prime destination for data center expansion—particularly for the energy-intensive computing operations that power AI.
The state is also the focal point for Stargate, a landmark $500 billion AI infrastructure initiative backed by OpenAI, SoftBank, and Oracle. Announced by former President Donald Trump in January, the project is already taking shape.
Oracle CEO Larry Ellison confirmed that the first 10 data centers are under construction in Abilene, TX, with plans for 10 more in the pipeline.
As of September, Texas had 279 data centers, with 141 located in and around the Dallas-Fort Worth metro area, according to the Texas state comptroller.
“Texas’ business-friendly policies continue to expand the state’s economic footprint,” says Realtor.com® senior economic research analyst Hannah Jones. “With the fastest-growing job market in the country, Texas is experiencing increased demand for housing.”
Will the Data Center Boom Impact Texas Home Prices?
The rapid expansion of data centers is expected to drive up property demand, potentially increasing home prices in key areas.
With Texas already experiencing strong economic and population growth, the influx of new data centers will likely attract additional workers in construction, IT, and related industries—further fueling housing demand.
Key areas to watch include parts of the Dallas-Fort Worth metro, where multiple data center projects are in the works, including campuses in Red Oak, Grand Prairie, Lancaster, and Garland.
The massive Stargate project in Abilene could also stoke housing demand in the city of about 130,000.
“Texas has kept up with climbing housing demand considerably well, but affordability challenges persist in the state,” says Jones.
“Though inventory levels are relatively high in the state, it will be important for construction to continue to keep pace with job growth to ensure job seekers can find affordable housing options.”
Can the Texas grid keep up with demand?
The data center boom is creating new jobs and powering new hubs of tech innovation in Texas.
But it also has the potential to drive up industrial and residential land prices in the state, and raises questions about whether the state’s energy grid can keep up with demand.
Texas is unique among the states in that it has an independent electrical grid with no interconnections to out-of-state providers. The arrangement allows Texas to avoid federal energy regulations, but means the state is on its own to meet demand for electricity.
“How we have the energy needed in order to drive all this technology, I think, is not really being talked enough about,” U.S. Rep. Marc Veasy, a Texas Democrat, said during a fireside chat at SXSW last weekend.
“The energy conversations that we always have in DC are very controversial, because no matter what sort of energy it is, someone can find a way to be against it,” he said.
Last month, nuclear technology startup Last Energy announced plans to build 30 small modular nuclear reactors near Haskell, TX, to help power the state’s AI data center boom.
The company said it had already filed for a grid connection with the Electric Reliability Council of Texas (ERCOT) and was preparing to file for a permit with the U.S. Nuclear Regulatory Commission.
“Last Energy’s microreactor project in Haskell County will help fulfill the state’s growing data center demand,” Texas Gov. Greg Abbott said in a statement. “Texas is the energy capital of America, and we are working to be No. 1 in advanced nuclear power.”
Speaking at SXSW, Veasy also praised the nuclear project as embracing an “all of the above” approach to power generation, and noted that about 30% of the ERCOT grid relies on renewable energy.
“It really is going to be all hands on deck to be able to power us into this new age of technology,” he said. “We already have the groundwork here to be able to be the leaders in the model, not just for the United States, but I believe the world.”
