Texas is expected to become the largest data center market in the United States within the next three years, according to a new report by Bloom Energy, a company based in California that supplies onsite power systems for data centers. The report projects that electricity demand from Texas data centers will surpass 40 gigawatts by 2028, a significant increase from current levels and more than any other state.
Currently, Texas has about 387 data centers. In 2025, these facilities had a maximum power demand of approximately 8 gigawatts, compared to the state’s peak grid demand of 94 gigawatts as reported by the Electric Reliability Council of Texas. One gigawatt can supply power to roughly 700,000 homes for one year.
Major technology firms such as Google, Nvidia, and Anthropic have announced large-scale projects in Texas over the past year. Other ventures include initiatives linked to former Google CEO Eric Schmidt and Rick Perry’s Fermi REIT. Additionally, Texas is expected to be involved in “Project Stargate,” a $400 billion partnership between Oracle, OpenAI, and SoftBank aimed at expanding AI infrastructure over three years.
Developers are choosing Texas due to its ample land supply, lower costs, access to natural gas, and a regulatory environment that supports new power generation projects more readily than some coastal states. Bloom Energy’s analysis suggests that growth in Texas’ data center sector will outpace states like Oregon and California where there are stricter limits on new gas-fired plants.
Aman Joshi, chief commercial officer at Bloom Energy said: “As you think about onsite generation, no matter where you are in the U.S., 100 percent of onsite generation is largely happening with natural gas — and Texas certainly has a lot of access.”
The scale of development is increasing rapidly. By 2030, one out of every five data centers nationwide is predicted to have an energy demand exceeding one gigawatt; this ratio could rise to one in three by 2035.
Financial investment is also rising sharply. More than $3.4 billion worth of new data center construction was registered in Texas during 2025 with the state’s Department of Licensing and Regulation. In December alone, construction budgets for new projects reached over $1.4 billion.
However, Bloom Energy notes growing challenges between developers and electricity providers as it becomes more difficult and costly to secure grid connections amid rising demand.
The report stated: “Power can no longer be treated as a downstream consideration,” warning that sticking with traditional grid planning could lead developers to face delays or reduced project sizes.
To address these issues, an increasing number of operators are adding onsite power sources—such as natural gas plants or fuel cells—to their facilities. The report estimates that about one-third of all U.S. data centers will have their own power generation capabilities by 2030.
