Development of data centers is set to double over the next two years, as demand surges for cloud computing and AI services.
Industry insiders call this the new “gold rush,” as developers, occupiers and investors are competing for available power, land and equipment.
The nation's first Stargate data center, a joint venture led by key AI industry leaders, is already in expansion mode in Abilene, Texas. The 875-acre site will total eight buildings across four million square feet, using 1.2 gigawatts of power. The Stargate project selected Texas, in part, because the state can provide enough energy to power the center.
According to Cushman & Wakefield and JLL, data center demand will require increasingly large site acquisitions for phased campus developments, pushing those projects into suburban and rural areas.
Not including the Stargate project, Texas has already surpassed the nation's dominant data center market in Northern Virginia for new construction, with 1,191 megawatts of colocation power underway in the major Texas cities.
In addition to Abilene, Dallas-Fort Worth will lead the country in data center construction in the next 36 months, while the Austin-San Antonio data center market has more than doubled in size since 2020.
With this increasing demand brings rising land costs, which bodes well for current land owners. It also brings challenges in obtaining necessary electric power for large projects, which Texas claims it can meet.
