AUSTIN, Texas — The artificial intelligence race is on in Texas.
The demand for AI continues to help drive the growth of data centers in the Lone Star State, with the Austin area a hot spot. But data centers require a lot of power and, at times, a lot of water – two resources environmentalists say Texas doesn’t have enough of.
The KVUE Defenders took a closer look at what’s driving the explosive growth and what’s being done to address the environmental impact.
Investigative reporter Jenni Lee and photojournalist Jake Sykes toured the data center where the University of Texas at Austin’s most powerful supercomputer is housed. The machine room at the Texas Advanced Computing Center (TACC) holds thousands of individual computers that are combined to make up four supercomputers calculating complex problems for scientific research.
“There’s a total of about half a million processor cores that make up the system,” Executive Director Dan Stanzione said about Frontera, the most powerful supercomputer at TACC.
To give you an idea of how powerful Frontera is, one person would have to calculate one problem every second for 1.27 billion years to match what Frontera calculates in one second.
Frontera’s supercomputing abilities have real-life applications. For example, it enables more accurate simulations of weather patterns and ocean currents.
Another supercomputer, Vista, expands TACC’s capacity for AI and serves as a bridge between Frontera and Horizon, UT’s newest supercomputer, expected to come online in 2026. When it does, it will be one of the most powerful in the world, with 10 times the scientific capabilities of Frontera.
“It’s probably more like 100 ‘X’ what we could do on Frontera,” Stanzione said. “We’ll also have more of a focus on AI than Frontera did.”
The demand for AI is skyrocketing. Digital transformation, advanced computing power and cost reduction are a few reasons behind the surge. That translates to a need for data centers.
In January, President Donald Trump announced the $500 billion Stargate project, the largest AI infrastructure investment in history. The first data centers are under construction in Abilene. They’re also popping up all over Central Texas.
Eric Bell tracks their growth.
“What’s causing the growth in data centers is really driven by AI,” Bell said.
Bell is the founder of Baxtel, which is a “platform for data center research, advisory, and procurement with 25,000 monthly users,” according to its website. Baxtel’s latest data shows 386 facilities in Texas. Forty-seven of those are in the Austin area, and 13 of those have expansion plans, with eight currently under construction.
“Another trend that we’re seeing [is] data centers are being built in a much larger fashion,” Bell said.
Bigger data centers mean more energy use.
According to Baxtel, the power capacity for the 47 operational data centers is 642 Megawatts. For perspective, one Megawatt can power about 250 homes in Texas, according to the state power grid operator, the Electric Reliability Council of Texas (ERCOT).
The power capacity for the eight data centers under construction is 358 Megawatts. Combined, it totals 1000 Megawatts.
But the power capacity for the 13 planned sites is more than those two combined at 1,186 Megawatts – part of the reason ERCOT predicts the need to triple the amount of power Texas generates in 15 years.
Energy expert and consultant Doug Lewin authors the Texas Energy and Power Newsletter.
“When you start to see the numbers of how much generation will need to meet some of the projected load growth, it starts to get pretty shocking,” Lewin said.
He said right now, ERCOT has a capacity of about 170,000 Megawatts of total power. But ERCOT predicts a need between 425,0000 and 500,000 Megawatts of power by 2039.
“That’s a whole lot of power,” Lewin said.
ERCOT also predicts electricity demand could double by 2030.
“What does Texas need to do to meet this challenge?” Jenni Lee asked Lewin.
Lewin said the state need to do a lot of things right.
“There’s only a few places in the country these data centers can really go, and Texas is one of them,” Lewin said. “We do need these data centers to bring some power with them, whether that’s through power purchase agreements that a developer builds for them or on-site power. I think in a lot of cases, they’re going to need to have backup power … We could be much better at energy efficiency and actually lowering the demand that could actually allow a whole lot more economic growth while also lowering consumers’ bills.”
But the proliferation of data centers is a big concern for environmentalists.
Luke Metzger is the executive director of Environment Texas.
“The amount electricity growth in the United States, over the last few decades has been pretty stable and … very modestly rising until the last … few years, where we’ve seen just an incredible uptick in demand for electricity, largely driven by demand for new data centers, both artificial intelligence, bitcoin mining and other uses,” Metzger said.
In January, Environment Texas released a white paper on data centers, outlining how power-hungry computing activities like AI could slow the retirement of oil and gas power plants.
“Can we actually accommodate that huge demand and, if we do, what are the consequences for our air and our water, our electric bills, reliability and other things?” Metzger said.
State leaders are also worried.
Gov. Greg Abbott addressed the concern during a January press conference about the state’s response to severe weather.
“Last year alone, there were more than 600,000 people who moved to the State of Texas. We have more than 340 economic development projects under the pipeline,” Abbott said. “We’re going to have many more businesses coming to the state of Texas, some of which will be heavy users of power such as AI data centers and so, for Texas to maintain its national leadership for economic development and for growth, we need to make sure that we continue to add more power to our grid so that the power will stay on for every home and for every business. And that’s why, once again, when we go into this next session, we’ll be asking for more money generate more dispatchable power in the state of Texas.”
In 2024, Lt. Gov. Dan Patrick posted on X that, “It can’t be the Wild, Wild West of data centers and crypto miners crashing our grid and turning off the lights.”
In January, Patrick announced Senate Bill 6, which would increase the state’s electric grid reliability. As of Feb. 6, the file has yet to be filed.
Environment Texas is also worried about the impact on water. Its report details how one data center can consume up to 5 million gallons a day by cooling off hundreds or thousands of computers that quickly heat up.
In comparison, the average water use per person in Austin is 131 gallons a day, or about twice the volume of a bathtub, according to Austin Water.
The KVUE Defenders reached out to Austin Water to get more information about how much water data centers use.
A spokesperson stated:
“Austin Water is aware that water use for data center air conditioning is an emerging issue in the technology and water planning sectors. At this time, Austin Water does not have methods in place to easily and accurately identify customers that might be considered a ‘data center.’ We are hoping to explore ways to accurately identify customers that are data centers in the future.
In a preliminary analysis, Austin Water has identified less than a dozen customers that might be categorized as data centers. We estimate that in 2024 this group of possible data centers used a total of 130,993,800 gallons of water. July of 2024 marked the highest aggregate monthly water usage with 14,568,000 gallons used. The lowest total monthly water usage for the group — 7,744,800 gallons — occurred in December of 2024.
By comparison, the same customer group used 70,223,200 gallons of water in 2023. That year they used the most water in October, when 10,076,000 gallons were consumed. The lowest aggregate monthly water usage in 2023 was measured in February when data centers used 2,960,400 gallons of water.
For context, 2024 aggregated water use for the data center group represented 0.28% of total water use across all customer classes for Austin Water. In 2023, it was 0.15%.”
The KVUE Defenders requested similar information from Austin Energy, but we have not heard back.
The Defenders previously reported that the Texas Water Plan estimates the Lone Star State’s population will go from around 30 million in 2020 to more than 51 million in 2070, an increase of 73%. The 2022 state water plan also projects the state’s municipal demands will start surpassing existing water supplies in 2030.
RELATED: Ongoing drought, growing population and aging infrastructure affecting water supplies
As part of our investigation, the Defenders toured the Sabey Data Center in Round Rock. Senior Vice President Mark Noonan said newer data centers like his are focused on sustainability.
“This building’s cooling is designed with an air-cooled system … And our water usage is really next to nothing,” Noonan said.
They use industrial-scale, air-cooled units.
“You can just think you could just think of it as a natural recycling or recycling system, and you’re right, yes, it cools off, heats up, cools off, heats up. But it uses the same water as it does that,” Noonan said.
Back at UT’s Texas Advanced Computing Center, Stanzione told us how quickly the computers can heat up.
“It gets very hot, very fast,” Stanzione said. “These chips will shut down at around 190 to 200 degrees.”
He also said they’re experimenting with several cooling options, including some that don’t require water.
“This is another alternative for cooling technology, where we’re doing immersion cooling,” Stanzione said.
Still, Environment Texas wants lawmakers to act before it’s too late.
In January, the group sent legislators its legislative agenda, with recommendations like ending subsidies to data centers and enacting environmental regulations.
“There’s the former Chapter 313 program that provides discounts on school taxes, the Chapter 312 program that provides discounts on county taxes. The Chapter 313 program expired, they replaced it with this new JETI program which again, provides kind of new discounts on school taxes,” Metzger said. “I’m hopeful that, at the very least, we can get some just basic reporting requirements to make sure that ERCOT has all the information that they need because much of this is speculative, right? A lot of these projects might not get built and so there’s a real risk then that we either don’t build enough to meet the demand or we build way too much.”
Because right now, no one knows if new supplies of power can keep up with the unprecedented growth of data centers.
“That’s the big question,” Metzger said.