- Texas is experiencing an unprecedented surge in data center construction, positioning itself to become the nation’s largest data center market by 2028. While cities across the state are landing billion-dollar projects, Tyler has yet to join the race. The question worth asking is: should we be?
The numbers tell a compelling story. Google recently committed $40 billion to build three AI-focused data center campuses across Texas. Oracle, Meta, and other tech giants are following suit. Even Waco, a city similar in size to Tyler, is negotiating a $10 billion data center project that would transform McLennan County’s economic landscape. The proposed facility would create a tax base exceeding the entire city’s current valuation.
Tyler possesses several advantages that could make it competitive in this market. The city has abundant affordable land, particularly in areas surrounding the city limits. Our proximity to natural gas infrastructure in East Texas could support the onsite power generation that developers increasingly prefer due to grid connection delays. Tyler’s location along major fiber optic corridors and our relatively lower cost of living compared to major metro areas could also be attractive selling points.
In order to pursue this development, however, significant infrastructure investments would likely be necessary.
- Data centers require massive amounts of reliable electricity; the proposed Waco facility alone needs 1.2 gigawatts, enough to power 300,000 homes. Tyler would need to assess whether our current electrical grid could handle such demand or what upgrades would be required.
- Water resources present another consideration, though modern cooling systems can significantly reduce consumption after initial fill.
- The city would also need to evaluate whether our workforce development programs could support the specialized technical jobs these facilities create.
If these investments were made, the economic impact would be substantial. These facilities represent paradigm-changing tax revenue for local governments and school districts. They create construction jobs during buildout and permanent positions for operations and maintenance.
The data center boom does come with legitimate concerns. Communities nationwide are pushing back against projects due to water consumption, strain on power grids, noise pollution, and environmental impact. In 2025, opposition canceled 25 data center projects representing 4.7 gigawatts of capacity, primarily in the Midwest and on the East Coast. Texas has seen fewer cancellations than other states, but the concerns remain valid.
For Tyler, the question isn’t simple. Do we have adequate power infrastructure? Can our water supply handle the demand? Are we willing to make the regulatory accommodations these projects require? And perhaps most importantly, do the economic benefits outweigh the potential quality-of-life impacts for our community?
Originally published in the Tyler Morning Telegraph.
