Texas Emerges as AI Datacenter Epicenter
The Lone Star State is rapidly transforming into a global hub for artificial intelligence infrastructure, with multiple technology companies establishing massive computing facilities to capitalize on the region’s abundant energy resources. According to reports, companies are investing billions in datacenter projects across Texas, drawn by the availability of affordable power necessary to support the enormous electricity demands of AI systems.
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Major Tech Investments in Texas AI Infrastructure
Meta has announced its 29th datacenter project in El Paso, Texas, with the facility expected to scale to a gigawatt of computing capacity by 2028, according to company statements. Sources indicate the initial investment will approach $1.5 billion, with power supplied by El Paso Electric, which sources its energy predominantly from natural gas, nuclear, and solar generation.
Meanwhile, analysts suggest Nvidia-backed AI developer Poolside is collaborating with infrastructure provider CoreWeave to deploy a two-gigawatt facility on West Texas oil fields. The companies plan to power the datacenter using onsite generators fueled by natural gas extracted directly from nearby sources, according to project documentation.
Diverse Energy Approaches for AI Computing
The report states that while many companies are leveraging Texas’s fossil fuel resources, alternative energy solutions are also emerging. ECL is developing a one-gigawatt datacenter in Houston that will supposedly be powered by hydrogen fuel cells, with Lambda set to become its first tenant, according to company announcements.
In Abilene, partners Crusoe and Oracle have activated the first 200 megawatts of what is expected to become a 1.2-gigawatt campus, sources indicate. Recent updates confirm the facility will eventually house 450,000 Nvidia GPUs, equivalent to 6,250 Nvidia GB200 NVL72 rack systems.
Strategic Advantages of Texas Location
Companies are reportedly choosing Texas for several strategic reasons:
- Energy Proximity: Building near energy sources reduces transmission costs and improves reliability
- Modular Development: Phased construction allows for gradual scaling and cost management
- Economic Incentives: Texas offers favorable business conditions for large-scale industrial projects
- Infrastructure: Existing energy and transportation networks support rapid development
According to industry analysis, Oracle is leveraging its comprehensive advantages to build what executives describe as a fundamentally different approach to cloud infrastructure. Similarly, the scale of these projects reflects broader industry trends toward infrastructure transformation across multiple technology sectors.
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Financial Scale and Hardware Investments
The financial commitment required for these AI datacenters is substantial, with the Poolside and CoreWeave facility reportedly costing approximately $16 billion, excluding compute hardware. Industry sources suggest that while individual NVL72 racks carry estimated price tags of $3.5 million each, volume deployments likely qualify for significant discounts from suppliers.
Analysts suggest that the convergence of energy resources, technological demand, and strategic location is positioning Texas as a critical node in the global AI infrastructure landscape, with development expected to accelerate through the remainder of the decade.
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