Texas leads US in planned data center capacity at over 60 gigawatts
Texas now leads the United States in planned data center capacity with over 60 gigawatts in development, though a permit pause and grid congestion could slow expansion.
Tracker reports indicate Texas holds the largest planned data center pipeline in the US, with major and AI-focused projects accounting for 40-45 GW. When smaller facilities are included, the total exceeds 60 GW, making it the highest of any state.
The single largest project is Fermi America's Matador campus in Carson County, planned at 17 GW and currently under construction. This single development represents a significant portion of the state's major-project total.
Developer Appeal
Texas attracts developers due to three key factors: abundant available land, plentiful natural gas resources, and a regulatory environment favorable to large construction projects. These elements have positioned Texas as a serious competitor to Virginia, which has historically been the top state for data center capacity.
Utilities are already seeing this demand reflected in their contracts. By late 2025 or early 2026, AEP's contracted large-load pipeline in Texas had reached 36 GW, demonstrating the significant commitment from developers.
Grid Challenges
The momentum faces significant obstacles. ERCOT's interconnection queue totals approximately 474 GW, with about 90% coming from data centers. Following the November midterm elections, Governor-elect Gina Hinojosa has committed to an approval freeze while new regulations are considered.
Investment Impact
For investors, utilities represent a key group to watch as companies like AEP secure large-load contracts and associated infrastructure spending. The dominance of data centers in ERCOT's queue means changes in review processes will significantly impact expectations for future grid load in Texas.
BNEF predicts only 1.2 GW of ERCOT data center capacity will come online between mid-2026 and early 2027, highlighting the gap between planned and actual capacity. Investors should monitor the scope and duration of any approval freeze, the results of Abbott's audit, and how much capacity actually materializes compared to forecasts.
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