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Texas data center boom could strain water supply, new report warns

thirst for data

A new report shows that Texas data centers used 25 billion gallons of water in 2025. Photo via HARC report.

As data centers continue to boom throughout Texas, a new report from the Houston Advanced Research Center (HARC) warns that the trend could strain the state’s water supply.

HARC estimates Texas data centers used 25 billion gallons of water in 2025—and that the demand for water will continue to rise to meet the needs of the 464 data centers currently in Texas, as well as 70 additional sites currently under development.

In the report, titled “Thirsty Data and the Lone Star State: The Impact of Data Center Growth on Texas’ Water Supply,” The Woodlands-based nonprofit says that water use for cooling data centers is expected to double or triple by 2028 on the national level. If projections hold, the total annual water use for data centers in Texas will increase by 0.5 percent to 2.7 percent by 2030, or to between 29 billion and 161 billion gallons of water consumed.

Data centers often use water for cooling, though water demand is dependent on the type of cooling used, the size and type of the data center. Although used water can be reused, some new water withdrawals are always needed to replace evaporated water and other systems’ water losses. Water is also used to cool the power plants that generate electricity used by the data centers.

The HARC report offers guidance to address the overall concerns of water demands by data centers, including:

  • Dry cooling methods
  • Increased reliance on wind and solar energy sources
  • Alternative water supplies, like treated wastewater or brackish water for cooling
  • Adjusted operating schedules to accommodate water usage
  • Partnering with local companies to develop projects that reduce water leaks
  • Companies creating their own water infrastructure investments

The report goes on to explain that the Texas State Water Plan, produced by the Texas Water Development Board, projects shortages of 1.6 trillion gallons by 2030 and 2.3 trillion gallons by 2070. HARC posits that the recent surge in water demand from AI data centers is not fully reflected in those projections.

"Texas water plans always look backward, not forward," the report reads. "That means the 2027 water plan, which is in development now, will be based on 2026 regional water plans that do not include forecasted data center water use. Data centers that began operation in 2025 will not be added to the State Water Plan until 2032."

Currently, there are no state regulations that require data centers to report how much water they use. However, the Public Utility Commission of Texas (PUC) plans to survey operators of data centers and cryptocurrency mining facilities on their water consumption, cooling methods and electricity sources this spring. It is expected to release the results by the end of the year. The companies will have six weeks to respond. The Texas Water Development Board will assist the PUCT on the questions.

“I think we all recognize the importance of data centers and the technology they support and what they give to our modern-day life,” PUC Commissioner Courtney Hjaltman said during the last commission meeting. “Texans, regulators and the legislature really need that understanding of data centers, really need to understand the water they’re using so that we can plan and create the Texas we want.”

See the full HARC report here.
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Amazon's EV robotaxi service Zook is set to arrive in Houston

EV News

Amazon-owned electric robotaxi ride-hailing service Zoox is zooming into Houston in September.

Initially, self-driving retrofitted SUVs with safety drivers on board will serve downtown Houston, centrally located tourist hotspots, and certain residential neighborhoods. The SUVs will test Houston roads before Zoox rolls out autonomous robotaxis, the company says.

Zoox takes Houston for a test drive

At the outset, Zoox says, a limited number of vehicles will be driven by people to gather data about Houston roads.

“This helps create a detailed picture of each street, from road geometry to traffic lights,” the company says. “Once we have mapped out an area, we will test autonomous driving capabilities. Safety and operational readiness govern the pace of our rollout.”

Zoox says its robotaxi differs from vehicles operated by other ride-hailing services.

The all-electric robotaxi “is purpose-built for autonomous ride-hailing and designed for riders from day one,” the company says. “It has no traditional driving controls and instead has carriage-style seating, sliding glass doors, and features that let the rider personalize their journey.”

To help manage the fleet, Zoox plans to open a depot in Houston for vehicle charging and maintenance, a representative says via email.

Along with Houston, Zoox is launching this month in San Diego. The ride-hailing service already operates in Austin, Dallas, Atlanta, Las Vegas, Los Angeles, Miami, Phoenix, the San Francisco Bay Area, Seattle, and Washington, D.C.

Zoox breaks into “sprawling” Houston market

Zoox describes Houston as its “most sprawling market to date.”

“Driving here means navigating complex service-road networks, unique merging scenarios, and challenging environmental conditions, including severe heat, heavy rain, and urban flooding,” the company says. “It’s a rigorous test of our technology across geography and terrain.”

Zoox will join two other autonomous ride-hailing services in Houston:

  • Waymo began rolling in Houston in February. Alphabet, the parent company of Google, owns Waymo.
  • Electric vehicle manufacturer Tesla began offering robotaxi services earlier this year.

A third Zoox competitor is arriving within the next year. A partnership comprising rideshare provider Uber, EV manufacturer Lucid, and autonomous technology company Nuro plans to launch a robotaxi service in Houston by mid-2027.

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This article originally appeared on CultureMap.com.

San Antonio company breaks ground on 347MW solar project outside of Houston

coming soon

Crews have broken ground on the forthcoming 347-megawatt direct-current SunRoper Solar project in Wharton County, Texas, that will add capacity to the ERCOT grid.

The solar project, which is slated to begin operations in December 2027, will provide electricity to an undisclosed Fortune 100 company under a long-term power purchase agreement, according to a news release.

San Antonio’s OCI Energy and Israel's Arava Power are developing the project. It's being financed by ING Capital and constructed by Louisiana-based WHC Inc. The project received $394 million in construction financing in February.

"SunRoper demonstrates how strategic partnerships can help meet Texas' growing demand for electricity through investments in critical energy infrastructure," Sabah Bayatli, president of OCI Energy, said in the release.

Project partners, landowners and company executives attended a groundbreaking event for SunRoper on Sept. 1 at the site outside of the Houston metro area. The companies say they are advancing this energy project to strengthen grid reliability and to help deliver affordable power to one of the highest-demand areas in the state.

“WHC is proud to serve as EPC contractor on the SunRoper Solar project, bringing our construction expertise to bear on a facility that will deliver meaningful power to the Houston region,” Randel Badeaux, president of power North America for WHC, added in the news release. “This groundbreaking reflects months of careful planning and coordination with OCI Energy, Arava Power and our project partners, and we look forward to executing a safe, high-quality build through to completion in 2027.”

OCI Energy currently operates several utility-scale solar and battery energy storage system projects outside of the San Antonio area, and has five other projects under construction outside of San Antonio and Waco, with more than 30 under development in Arkansas, Mississippi, Georgia, Colorado and Alberta, Canada. The company also has existing projects in New Jersey and Georgia.

In $2 billion deal, NVIDIA takes 20% stake in Woodlands-based Lancium

power play

With an initial investment of $2 billion, AI chip manufacturer NVIDIA just acquired a 20 percent stake in The Woodlands-based Lancium, which develops large-scale campuses that combine AI data centers and onsite power supplies.

Lancium recently announced the investment but didn’t disclose the dollar amount. The Information news website reported NVIDIA’s investment totaled $2 billion, with the possibility of an additional $1 billion if Lancium achieves certain milestones.

Dealroom.co calls NVIDIA’s investment a “form of supply-chain insurance.”

NVIDIA “is gaining exposure to the scarce physical assets that determine whether its chips can be deployed,” Dealroom.co says. “The move makes Nvidia look less like a pure chip company and more like an allocator of infrastructure capacity.”

Investment precedes possible IPO in 2027

Thanks to NVIDIA’s cash infusion, Lancium and its portfolio of land and power connections carry an enterprise value of about $10 billion, according to The Information.

The investment should enable Lancium to expand as it explores a potential IPO next year, The Information reported.

Neither Lancium nor NVIDIA is responding to requests for comment about the deal.

Lancium’s marquee project is a 1,000-acre data center and power generation campus in West Texas for the $500 billion Stargate initiative. Stargate, a joint venture comprising MGX, OpenAI, Oracle and SoftBank, is building data centers equipped to handle AI-level workloads.

“Epicenter of energy and AI infrastructure”

Founded in 2017, Lancium has 4 gigawatts of leased capacity and a more than 15-gigawatt development pipeline. In 2024, Blackstone Energy Transition Partners invested about $500 million in Lancium, giving Blackstone a roughly 50 percent stake.

“This partnership with NVIDIA is a strong testament to Lancium’s position at the epicenter of energy and AI infrastructure … . We look forward to continuing to partner with these leading companies to help power the next generation of AI innovation,” Bilal Khan, senior managing director at Blackstone, said in a release.

Through the NVIDIA partnership, Lancium’s data center and power generation campuses will use the tech company’s “AI factory” platform, including software, computing, and networking capabilities. This will give NVIDIA customers and partners access to power capacity that supports heavy AI workloads.

“We have spent years assembling the power, the land, and the infrastructure expertise needed to deliver AI data center capacity at a scale the world has never seen,” Michael McNamara, co-founder and CEO of Lancium, said in the release.

“Partnering with NVIDIA — the definitive technology platform for AI computing — ensures that every campus in our portfolio will be deployed with the industry’s most advanced technology and that NVIDIA’s customers will have access to the capacity they need to compete and lead in the AI era.”

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