Austin-San Antonio and West Texas led secondary and tertiary market rankings, underscoring Texas’ importance as a large-scale AI infrastructure hub.
By: Lana Ferguson
Dallas Morning News
https://www.dallasnews.com/
For the first time, Dallas was named the No. 1 primary data center market in the world.
The city surpassed other fast-growing and well-established markets, including Atlanta and Virginia, according to a new report released Wednesday by real estate firm Cushman & Wakefield.
Austin-San Antonio and West Texas led the secondary and tertiary market rankings, underscoring Texas’ growing importance as a large-scale AI infrastructure hub.
The report evaluates 107 global markets using factors like power infrastructure, political and regulatory conditions, operational capacity, cloud presence, and other factoring influencing development decisions.
“The global data center industry has entered a period of managed growth,” John McWilliams, the firm’s head of data center insights, said in a news release. “Demand fundamentals remain extraordinarily strong, but the industry is no longer operating in an environment of unconstrained expansion. Power delivery timelines, land availability, community sentiment and regulation are now playing a much larger role in determining where and how data centers get built.”
Texas, anchored by the long-established Dallas-Fort Worth market, moved into the spotlight for data centers over the last three years, according to the report.
The state’s business-friendly attitude, deregulated and independent power grid, abundance of land and incentives played into Texas’ favor when growing its market.
There have been some challenges, the report noted, including the concern of water availability and, though regulatory hurdles are generally less restrictive than other states, Texas Senate Bill 6 does impact data center development by giving state regulators a “kill switch” for large energy users.
Despite the headwinds, momentum has remained strong.
The report also credited the highly publicized Stargate project in Abilene for reinforcing the Lone Star State’s position as a “premier destination” for large-scale digital infrastructure, drawing interest from hyperscale and AI-driven users.
Other takeaways:
- Virginia remains the world’s largest data center market with 11.3GW of operational capacity, while Texas emerged as one of the industry’s fastest-growing and most scalable regions as large-scale data center development activity expands throughout the state.
- West Texas was identified as a rapidly growing AI infrastructure hub, with 2.9GW under construction, exceeding the entire amount of capacity underway across the Europe, the Middle East and Africa region.
- Global capacity under construction approached 31.7 gigawatts in 2025, more than doubling from 12.5GW the previous year
- The Americas remain the center of global data center development activity, accounting for approximately 80% of all capacity currently under construction worldwide.
- Planned capacity across the Americas increased more than fourfold year-over-year, rising from 46.1GW in 2024 to 191.3GW by the end of 2025.
This reporting is part of the Future of North Texas, a community-funded journalism initiative supported by the Commit Partnership, Communities Foundation of Texas, The Dallas Foundation, the Dallas Mavericks, the Dallas Regional Chamber, Deedie Rose, Lisa and Charles Siegel, the McCune-Losinger Family Fund, The Meadows Foundation, the Perot Foundation, the United Way of Metropolitan Dallas and the University of Texas at Dallas. The News retains full editorial control of this coverage.
Energy & Natural Resources Reporter
Lana Ferguson joined The Dallas Morning News after reporting in South Carolina’s Lowcountry for The Island Packet & Beaufort Gazette newspapers. She graduated from the University of Mississippi where she studied journalism and Southern studies. She’s a Virginia native but her work has taken her all over the U.S., southern Africa, and Sri Lanka.
