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Houston data center capacity could more than double by 2028, CBRE report says

data analysis

Houston's data center scene has received its latest bullish forecast. Photo via serverfarmllc.com

The Houston market could more than double its data center capacity by the end of 2028, a new report indicates.

The report, published by commercial real estate services provider CBRE, says greater demand for data center capacity in the Houston area is being fueled by energy companies, along with large-scale cloud services and AI-driven tenants.

In the second half of 2025, the Houston market had 154 megawatts of data center capacity, which was on par with capacity in the second half of 2024. Another 28.5 megawatts of capacity was under construction during that period.

“Multiple providers are advancing new builds and redevelopments, including significant power upgrades to recently purchased buildings, underscoring long-term confidence even as the market works through elevated vacancy and uneven absorption,” CBRE says of Houston’s data center presence.

One project alone promises to significantly boost the Houston market’s data center capacity. Data center developer Serverfarm plans to use part of a $3 billion credit facility to build a 250-acre, AI-ready data center campus near Houston with a potential capacity of more than 500 megawatts. The Houston campus and two other Serverfarm projects are already leased to unidentified tenants, according to CoStar.

A 60-megawatt, AI-ready Serverfarm data center is under construction in Houston. The $137 million, 438,000-square-foot project, located near the former headquarters of computer manufacturer Compaq, is supposed to be completed in the third quarter of 2027.

Data Center Map identifies 59 data centers in the Houston area managed by 36 operators, including DataBank, Data Foundry, Digital Realty, IBM, Logix Fiber Networks, Lumen and TRG Datacenters. That compares with more than 180 data centers in Dallas-Fort Worth, more than 50 in the San Antonio area and 40 in the Austin area.

Texas is home to more than 400 data centers, according to Data Center Map.

In November, Google said it’s investing $40 billion to build AI data centers in West Texas and the Texas Panhandle.

“This is a Texas-sized investment in the future of our great state,” Gov. Greg Abbott said when Google’s commitment was announced. “Texas is the epicenter of AI development, where companies can pair innovation with expanding energy. Google's $40 billion investment makes Texas Google's largest investment in any state in the country and supports energy efficiency and workforce development in our state.”

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A new report predicts that Texas will be home to 30 percent of the U.S. data center market by 2028. Photo via Chevron.com

New report predicts major data center boom in Texas by 2028

data analysis

Data centers are proving to be a massive economic force in Texas.

For instance, a new report from clean energy company Bloom Energy predicts Texas will see a 142 percent increase in its market share for data centers from 2025 to 2028. That would be the highest increase of any state.

Bloom Energy expects Texas to exceed 40 gigawatts of data-center capacity by 2028, representing a nearly 30 percent share of the U.S. market. A typical AI data center consumes 1 to 2 gigawatts of energy.

“Data center and AI factory developers can’t afford delays,” Natalie Sunderland, Bloom Energy’s chief marketing officer, said in the report. “Our analysis and survey results show that they’re moving into power‑advantaged regions where capacity can be secured faster — and increasingly designing campuses to operate independently of the grid.”

“The surge in AI demand creates a clear opportunity for states that can adapt to support large-scale AI deployments at speed,” Sunderland adds.

Further evidence of the data center explosion in Texas comes from ConstructConnect, a provider of data and software for contractors and manufacturers. ConstructConnect reported that in the 12-month span through November 2025, data-center construction starts in Texas accounted for $11 billion in spending. At $12.5 billion, only Louisiana surpassed the Texas total.

Capital expenses for U.S. data centers were expected to surpass $425 billion last year, according to ratings agency S&P Global.

ConstructConnect also reports that Texas is among five states collectively grabbing 80 percent of potential data center construction starts. Currently, Texas hosts around 400 data centers, with close to 60 of them in the Houston market.

A large pool of data-center construction spending in Texas is flowing from Google, which announced in November that it would earmark $40 billion for new AI data centers in the state.

“Texas leads in AI and tech innovation,” Gov. Greg Abbott proclaimed when the Google investment was unveiled.

Other studies and reports lay out just how much data centers are influencing economic growth in the Lone Star State:

  • A study by Texas Royalty Brokers indicates Texas leads the U.S. with 17 clusters of AI data centers. The study measured the density of AI data centers by counting the number of graphics processing units (GPUs) installed in those clusters. GPUs are specialized chips built to run AI models and perform complex calculations.
  • Citing data from construction consulting company FMI, The Wall Street Journal reported that spending on construction of data centers is expected to rise 23 percent in 2026 compared with last year. Much of that construction spending will happen in Texas. In the 12 months through November 2025, the average data center cost $597 million, according to ConstructConnect.
  • Data published in 2025 by commercial real estate services company Cushman & Wakefield shows three Texas markets — Austin, Dallas and San Antonio — boast the lowest construction costs for data centers among the 19 U.S. markets that were analyzed. The mid-range of costs in that trio of markets is roughly $10.65 million per megawatt. Houston isn’t included in the data.

Although Houston isn’t cited in the Cushman & Wakefield data, it nonetheless is playing a major role in the data-center boom. Houston-area energy giants Chevron and ExxonMobil are chasing opportunities to supply natural gas as a power source for data centers, for example.

“As Houston rapidly evolves into a hub for AI, cloud computing, and data infrastructure, the city is experiencing a surge in data-center investments driven by its unique position at the intersection of energy, technology, and innovation,” says the Greater Houston Partnership.
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ERock scores Anthropic deal, sees order backlog soar to $1.7B

power deal

Two months after its $400 million IPO, Houston-based ERock (NYSE: EROC) has landed a power-generator deal with AI powerhouse Anthropic, owner of the Claude platform.

In its Q2 earnings report, ERock says it will provide equipment to Anthropic with a 470-megawatt capacity. ERock specializes in utility-grade, onsite microgrid power systems for data centers and other customers. The company previously did business as Enchanted Rock.

The Anthropic deal adds to ERock’s backlog of about $1.7 billion in orders—a figure representing a 1,000 percent year-over-year jump in backorders thanks in large part to the AI boom. ERock expects most of the backlog to convert to revenue by the end of 2027, said Ian Blakely, the company’s chief financial officer.

Bank of America analyst Ross Fowler says the Anthropic contract boosts confidence in ERock’s ability to secure other major deals, according to Traders Union. The Anthropic deal is ERock’s third major data center contract, with separate Anthropic deals for operations and maintenance services expected to follow, Fowler said.

CEO John Carrington says Anthropic’s order “reinforces the momentum” ERock is witnessing across its customer base.

“We are seeing a lot of interest in Texas. It seems to be the easiest place to get a site set up,” company President Corey Amthor said

In its Q2 earnings release—its first as a public company—ERock also reported:

  • Launching generator-assembly operations at its Hyperion equipment factory in Northwest Houston. The plant will expand ERock’s assembly capabilities to 1.2 gigawatts of capacity by the end of 2026.
  • Starting construction of a $473 million, 366-megawatt El Paso Electric natural-gas-powered plant to supply power for Meta Platforms’ $14 billion, 1,000-acre AI data center campus in El Paso. Meta is the parent company of the Facebook and Instagram social media companies.

“Meta gains access to an operational data center years earlier than may otherwise be possible, while El Paso Electric gains a flexible, low-cost, low-emissions grid asset that can support long-term system reliability,” Carrington said.

Nominate energy trailblazers for Houston Innovation Awards by Aug. 27

Awards Season

Calling all energy innovators: The 2026 Houston Innovation Awards, presented by InnovationMap, return this fall to celebrate the best and brightest in the Houston innovation ecosystem, and that includes those leading the energy transition.

We're asking you to nominate Houston's top innovators and startups for this year's awards.

Nominations are open now through August 27 and can be made on behalf of yourself, your organization, and other influential leaders in the local innovation scene.

The annual awards program recognizes the most innovative individuals and companies in Houston across 10 prestigious categories, including one category specifically for the energy transition.

This year's awards will honor the following categories:

  • Minority-founded Business, honoring an innovative startup founded or co-founded by BIPOC or LGBTQ+ representation.
  • Female-founded Business, honoring an innovative startup founded or co-founded by a woman.
  • Energy Transition Business, honoring an innovative startup providing a solution within renewables, climatetech, clean energy, alternative materials, circular economy, and beyond.
  • Health Tech Business, honoring an innovative startup within the health and medical technology sectors.
  • Deep Tech Business, honoring an innovative startup providing technology solutions based on substantial scientific or engineering challenges, including those in the AI, robotics, and space sectors.
  • Startup of the Year (People's Choice), honoring a startup celebrating a recent milestone or success. The winner will be selected by the community via an interactive voting experience.
  • Scaleup of the Year, honoring an innovative later-stage startup that's recently reached a significant milestone in company growth.
  • Incubator/Accelerator of the Year, honoring a local incubator or accelerator that is championing and fueling the growth of Houston startups.
  • Mentor of the Year, honoring an individual who dedicates their time and expertise to guide and support budding entrepreneurs.
  • Trailblazer, honoring an innovator who's made a lasting impact on the Houston innovation community.

You have three weeks to submit nominees, so don't delay — nominate today at this link or fill out the form below. Qualified nominees will receive a formal application to complete, which will be reviewed by our esteemed panel of judges to determine the finalists and winners.

More announcements about the 2026 Houston Innovation Awards are coming soon. Interested in sponsoring the 2026 Houston Innovation Awards? Please contact sales@innovationmap.com.

Telsa eyes Houston area for $10 billion solar manufacturing plant

under review

Electric vehicle and clean energy company Tesla is considering building a new $10.1 billion solar cell manufacturing facility in Fort Bend County, according to documents filed with the Texas Comptroller’s Office.

If approved, the plant, called Project Sun City, would be located on a 3,050-acre site off FM 762 and FM 1994 in Richmond, Texas. Tesla aims to finish construction in 2028, with the plant being operational by early 2029.

The plant will manufacture photovoltaic (PV) solar cells and modules that can convert sunlight into electricity. PV Magazine reports that the facility is "the largest single manufacturing investment Tesla has proposed on paper."

Advisory and consulting firm Kroll submitted the documents to the Texas Comptroller of Public Accounts and noted if an agreement regarding tax incentives isn't reached, the project will exit Texas.

Tesla has requested credits under the Jobs, Energy, Technology, and Innovation (JETI) Act. The incentive program aims to attract large, capital-intensive economic development projects by lowering the property taxes an entity must pay over 10 years if it meets requirements related to job creation and investment. For example, pharmaceutical giant Bristol Myers Squibb Co. recently announced that its forthcoming $2.3 billion Houston-area manufacturing site is a qualified project under the JETI program.

Kroll predicts that the facility would create 9,712 new full-time jobs, over 1,100 construction jobs and billions of dollars in future property tax revenue, the documents show. Additionally, it says the project will spur $1.1 billion in local business expenditures and that Texas would increase its GDP by approximately $107 billion as a result of the project activities.

Tesla opened its $200 million Megafactory in Brookshire, Texas, last year. The company is continuing its goal to deploy 100 gigawatts of solar manufacturing in the U.S before the end of 2028. According to the U.S. Energy Information Administration, 100 gigawatts is equal to about 8 percent of the country's power grid capacity.

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