How Data Centers Are Reshaping Central Texas — and Dividing Its Communities
Drive through Williamson County today and you might notice something new rising from the flat scrubland between Austin’s booming suburbs: enormous, windowless buildings surrounded by cooling equipment, fencing, and construction crews. These are data centers — and they are arriving at a pace that has caught many Texas residents off guard.
Data centers provide the infrastructure to support both cryptocurrency facilities and the growth of artificial intelligence. The centers require huge amounts of power and water to operate. Simply put, every time you stream a video, ask an AI chatbot a question, or store a photo in the cloud, you’re relying on one of these facilities. They are the unglamorous but essential backbone of the digital economy.
And Texas wants to be the place that powers it all.
A State on the Rise
Texas has emerged as a leading force in data center expansion, attracting unprecedented investment from tech giants and establishing itself as a hub of AI infrastructure development. The reasons are straightforward: cheap and abundant energy, wide-open land, a business-friendly tax environment, and a central location that reduces data latency for users on both coasts.
Between 2023 and 2024, Central Texas, particularly around Austin and San Antonio, witnessed a four-fold increase in data center construction, totaling 463.5 megawatts of potential demand under development — positioning the region as the second-largest data center market in the U.S. Nationally, Texas is currently ranked fourth in data center capacity, behind Northern Virginia, the Pacific Northwest, and Columbus, Ohio — but analysts say it is well on track to reach the top spot.
The federal government is accelerating that trajectory. The Trump administration’s Stargate Project — a $500 billion initiative to establish a nationwide AI infrastructure — plans to construct up to 20 data centers across the country, with Texas serving as a central hub.
In Round Rock, the transformation is well underway.
Sabey Data Centers redeveloped the former Sears call center on Louis Henna Boulevard, completing its first 430,000-square-foot building in fall 2024, with plans for an eventual 54-megawatt extension.
Switch and Sabey are the two companies that have already built data centers in Round Rock, with Switch also constructing an additional facility on Dell Way. Residents organizing against a proposed ninth data center in the city were stunned to learn how many had already been approved or were operational — a sign of how quickly the buildout has accelerated.
Just to the south, Pflugerville has also become a hub. Skybox Datacenters and Prologis have developed a facility at South Kenney Fort Boulevard in Pflugerville representing a $548 million investment, and Skybox already has locations in both Pflugerville and Hutto in the Austin metro.
Central Texas at the Epicenter
The Austin American-Statesman identified at least 55 completed or planned data center projects between Temple and San Antonio in 2025 alone. Williamson County, north of Austin, has become particularly fertile ground — and several of its communities are already living with the results.
In Hutto — a fast-growing city of around 30,000 at the intersection of U.S. 79 and Texas 130 — the changes are already visible.
The Skybox Datacenters and Prologis project on 159 acres is well underway and could eventually include nearly 4 million square feet of data center space across several buildings, representing at least $10 billion in capital expenditures. California-based Colovore has also received city approval for a $500 million, 180,000-square-foot facility nearby. For city officials eyeing tax revenue and economic development, these projects are transformative. For many residents, they represent something else entirely.
Meanwhile, to the south, Hays County has become its own flashpoint. In February 2026, the San Marcos City Council voted 5–2 to reject zoning changes for a proposed $1.5 billion data center campus in Hays County. After more than eight hours of public testimony, with over 100 residents speaking against the project, the council blocked the nearly 200-acre proposal. Local organizers had mobilized petition campaigns for months prior to the vote, citing concerns about power demand and regional water stress.
The Costs Communities Are Counting
The objections raised in Hutto, San Marcos, and communities across the state follow a familiar pattern. Data centers are energy-intensive facilities that operate 24 hours a day. Large ones can require 100 megawatts or more each — consuming as much power per year as 350,000 to 400,000 electric cars. ERCOT forecasts that peak electricity demand in Texas could reach 218 gigawatts by 2031, more than double the 2023 record — with data centers expected to account for the largest share of that growth.
2023 record peak
~85 GW
2031 forecast peak
218 GW
Projected growth
+156%
Source: ERCOT long-term load forecast. Growth breakdown is illustrative based on ERCOT’s projection that data centers represent the largest share of new demand.
PODCAST
The race to build smarter AI is crashing into a physical limitation: the power grid simply can’t keep up with the energy demands of data centers. Computer scientist Ayșe Coskun shows how we could turn this problem on its head, transforming AI facilities into virtual batteries that help stabilize the grid and accelerate clean energy. Learn why the technology causing this crisis might be the only thing smart enough to fix it.
(Episode from February 25, 2026)
Water is the other pressure point.
Texas’ water supply is limited from the Panhandle to the Rio Grande Valley, and new, bigger data centers arriving regularly have raised unanswered questions about where they will get the water they need to stay cool.
Noise from constant cooling equipment, light pollution, and traffic from construction are additional grievances raised by neighbors.
County governments have very few tools to regulate data centers, and their ability to intervene is constrained by state law. That imbalance of power has frustrated residents who feel they are being steamrolled by developers and officials more focused on tax revenue than quality of life.
Campaign finance filings cited by Politico indicate that Meta and several other major tech companies have ramped up their political spending in Texas, backing candidates ahead of pivotal elections as lawmakers weigh new regulations for the industry. According to the report, Meta poured $1.3 million into Texas’ March primary contests, while a political action committee linked to Elon Musk contributed $500,000 in support of state Senate candidates. (Houston Chronicle)
The Tension Won’t Go Away
The debate reflects a genuine dilemma. Data centers in Texas supported over 485,000 jobs and $35 billion in labor income in 2023, when counting both direct and indirect employment contributions. For cash-strapped municipalities, the tax revenue can be a lifeline. But those jobs aren’t always long-term — and residents increasingly question whether the economic gains outweigh the strain on shared infrastructure.
As Texas races toward becoming the nation’s dominant data center market, the communities caught in that race are demanding a seat at the table. In Hutto, San Marcos, and across Central Texas, the message from residents is becoming harder to ignore: growth at any cost may be too high a price to pay.
SOURCES::
- TRG Datacenters
- Texas Real Estate Research Center (Texas A&M)
- Boerne Star
- Industrial Refrigeration Pros
- University of Texas at Austin, Jackson School of Geosciences
- ABC Central Texas
- Texas Economic Development Corporation
- Fort Worth Report
- Texas Tribune (4 articles)
- Governing Magazine
- Texas Scorecard
- Data Center Watch (Substack)
- East Wilco Insider
- Data Center Map
- City of Round Rock
- KXAN News (2 articles)
- Deceleration News
- Baxtel
- Pflugerville Community Development Corporation
The City of Austin is hosting “Your Budget, Your Priorities: Community Conversations with T.C. Broadnax”, a series of town hall meetings where residents can learn about the city’s budget process and share input on priorities for the upcoming fiscal year.
Two lots at the busy intersection of 45th Street and North Lamar Boulevard — including the site of Austin’s most famous Chili’s — have hit the market. (Austin American-Statesman)
Austin police have released more information about a homicide in the 10900 block of Brazoria Lane last week. Detectives are asking neighbors to share any video footage in the neighborhood between 11:30 pm and 1:00 am in the early morning hours of Friday. At this time, the direction of travel is unknown, and it is possible the person(s) responsible drove around the neighborhood when attempting to leave.
A trial is starting this week in Williamson County for a man charged with murder for dealing fentanyl.
A former Winn Montessori Elementary School teacher was arrested by the Austin Independent School District Police Department and charged with aggravated sexual assault of a child, a first-degree felony. (KXAN-TV)
Kyle City Councilwoman Claudia Zapata says she was threatened by a constituent during a public comment session at a recent council meeting and is proposing new laws to protect against such behavior.
A Cedar Park man has been charged with stealing more than $12,800 worth of copper wire from a now-vacant Wendy’s location.
Copper wire is highly sought after by thieves due to its high resale value, widespread availability, and ease of removal.
Two Austin-area fugitives are listed among the most wanted in the state,
The Williamson County Sheriff’s Office is warning residents of yet another scam.
A new radio tower for police, fire and EMS communications could soon rise over west Austin.
PODCAST
On today’s episode, host Nikki DaVaughn is joined by producers Elissa Castles and Eva Ruth Moravec to talk about the biggest news in town right now: The duck killed by a self-driving car near Mueller Lake Park. Plus, there’s an Austinite behind NASA’s current Artemis II mission to the moon, and we’re sharing comments from our listeners, including one about our episode on where we’d take our enemies in town. Weigh in — how do you feel about the magician at Yamas Greek Kitchen + Bar?
A plan to widen MoPac Expressway through the heart of the Barton Creek Greenbelt and the Edwards Aquifer recharge zone is drawing renewed scrutiny from local officials and residents who say the project could have long-term consequences for traffic and natural features that define the city.
JOIN US: TxDOT is hosting an in-person public hearing for the US 281 at SH 71 Interchange project at Marble Falls High School, April 9 at 5:30 p.m. A virtual option will also be available at https://t.co/1dnXGCer9P.
— TxDOT Austin (@TxDOTAustin) April 6, 2026
Learn more: https://t.co/Xe605HHags #marblefalls #txdot pic.twitter.com/pkooj0hDnt
Good morning, AUS travelers!
— Austin-Bergstrom International Airport (@AustinAirport) April 7, 2026
For those traveling today, we're expecting over 21,000 departing passengers, which falls under a typical Tuesday.
Visit our website for more travel tips: https://t.co/PiiC08NiT1
Save travels, y'all 💓 pic.twitter.com/4ModfdTdxg
Deep Eddy Pool in Austin is set to reopen Friday after temporarily closing for yearly maintenance.
Two blazes, one in Oldham County and another in Orange County were fully contained Monday. By evening, another fire, this one in Potter County, flared up.
WEATHER
MONDAY’S HIGH / LOW TEMPERATURES
AUSTIN-BERGSTROM INTERNATIONAL AIRPORT
CAMP MABRY
5-DAY FORECAST / AUSTIN, TEXAS
FOX Weather Hurricane Specialist Bryan Norcross breaks down signals of a strong — and potentially super — El Niño climate pattern that’s forecast to form sometime this year and how that will impact this hurricane season.
The Texas State Board of Education is overhauling the K–12 social studies curriculum, a rewrite that will guide lesson plans and textbooks for more than 5.5 million students. The board approved a new instructional framework last year, and the proposed standards reflect several major shifts — including a move toward teaching history in strict chronological order, placing greater emphasis on Texas and U.S. history, and reducing the focus on world history. (KUT 90.5)
Federal prosecutors announced more than 700 immigration-related cases were filed last week in west and south Texas. (Texas Scorecard)
Texas Rep. Joaquin Castro has been a harsh critic of the conditions of ICE detention centers in the state and is calling for the complete closure of the Dilley facility.
U.S. Rep. Gabe Vasquez, D-New Mexico, on Monday renewed calls for the Trump administration to close an immigration detention center where a measles outbreak rages and three, possibly four migrants have died. (KXAN-TV)
Mexican truck drivers are blocking highways leading to the U.S. border to protest robberies by criminals and alleged extortion by authorities at checkpoints. Several semis parked across the Pan American Highway south of Juarez just before noon on Monday. They targeted commercial trucks and passenger buses, although they allowed personal vehicles to squeeze by their trucks. (KXAN-TV)
Guadalupe County authorities intercepted two semi-tractor trailers on IH-10. Inside were six stolen vehicles worth more than $470,000—believed to be headed for Honduras.
A second former female staffer for Tony Gonzales, a Republican congressman from Texas, has come forward claiming Gonzales sent her sexually explicit messages. (The Guardian)
In threatening to bomb Iran to smithereens, Trump seems to be motivated by a combination of frustration, vengeance, and wanting to look like a tough guy. But he also has a God complex. Destroying the country’s bridges and its entire energy infrastructure has nothing to do with nukes—and everything to do with war crimes. Plus, the soldiers and airmen who carried out the daring rescue mission over the weekend hail from the “woke and weak” era of the U.S. military, Trump should be impeached, his family has ties with military contracts involved in the war effort, and there are rumors of at least one SCOTUS retirement this year.
Bill Kristol joins Tim Miller.
(Episode from April 6, 2026)
SPORTS
COLLEGE BASKETBALL: For Texas Women’s Basketball, three players with Longhorn pasts will spend their futures elsewhere.
COLLEGE BASEBALL: Fresh off a conference series win in South Carolina, the Texas Longhorns (25-5 overall, 9-3 SEC) host Incarnate Ward (16-16 overall, 7-11 Southland Conference) this evening at Disch-Falk Field.
MLB: After a strong start, the Houston Astros are feeling their first slump of the 2026 season.
Troy Johnston hit a solo homer, a double and a single and the Colorado Rockies rode an eight-run fifth inning to a 9-7 victory over the Houston Astros on Monday night. After a five-game winning streak, Houston has lost three of their last four games. (Associated Press via Washington Post)
A win for the Texas Rangers last night.
Jake Burger hit a tie-breaking RBI double over the outstretched glove of left fielder Randy Arozarena in the sixth inning, Jacob deGrom and five Texas relievers combined for a two-hitter and the Rangers beat the Seattle Mariners 2-1 on Monday night. (Associated Press)
ON THE SCHEDULE
NBA: Good news and some potentially very bad news for the San Antonio Spurs.
Victor Wembanyama suffered a left rib contusion and was ruled out of the second half of San Antonio’s 115-102 win over Philadelphia on Monday night, leaving the status of the Spurs’ center for the rest of the regular season in doubt. (Associated Press)
Mitch Johnson says he hasn’t received an update yet on why Victor Wembanyama sat out the second half with a left rib contusion, but said it was a positive that Wemby did come back to play in the first half initially. pic.twitter.com/s5L6K4PIF1
— Jared Weiss (@JaredWeissNBA) April 7, 2026
ON THE SCHEDULE
NHL: Only five more regular season games to go for the Dallas Stars. The first is tonight against Calgary.
Surfing in Texas?
Yes, sir.
