Texas Embraces AI: Can Its Infrastructure Handle the Change?

By Cole Gee | Staff Writer

In recent years, the focus of technology and innovation in America has shifted from Silicon Valley to Texas. Known primarily as a hub for oil and gas, Texas is now becoming a hotspot for tech companies, particularly in artificial intelligence. Notably, OpenAI has made a substantial investment of $500 billion in the state, raising concerns about whether existing infrastructure can support the rapid growth of AI data centers.

The Stargate Project, driven by the Trump administration alongside Sam Altman, the CEO of OpenAI, aims to bolster American leadership in AI while creating numerous job opportunities. The initiative is expected to bring significant economic benefits both nationally and globally. A major step in this plan includes the construction of a data center in Abilene, which will cover over 870 acres—comparable in size to Central Park. Such a facility will demand considerable energy resources.

Texas's power grid has a history of failures during various emergencies, including outages caused by Hurricane Beryl and severe winter freezes. These past issues have raised alarm among experts regarding whether Texas’s aging infrastructure can withstand the additional burden imposed by new AI data centers. Many are concerned about the potential strain this could place on the state's already challenged power systems.

Ed Hirs, an economics professor at the University of Houston and an energy consultant, has pointed out the urgent need for infrastructure updates. He believes that AI data centers should incorporate onsite power generators to alleviate stress on the grid: "I expect that the new AI data centers will be built with onsite generators, behind the meter. They should not be built without assurance that their power draw will not destabilize the grid." Currently, Texas has 342 data centers, which collectively consume approximately 8.8% of the state’s electricity.

As Texas continues to attract a flow of tech companies and startups, there is an opportunity to modernize its infrastructure. Dr. Kayla Garrett, a postdoctoral fellow in environmental science, emphasizes the importance of balancing technological progress with environmental considerations: "We just need to continue to be mindful of balancing technological advancements and development with the environmental tradeoffs of increased energy use. Like with anything, there are tradeoffs. If we are to pursue more of these data centers, we need to ensure that we do not leave behind the environmental principles and realities of energy management."

To address ongoing concerns, the Public Utility Commission implemented regulations in November requiring crypto mining facilities connected to the ERCOT grid to report their power consumption to regulators. Additionally, Texas has introduced strict regulations governing AI, including the EU AI Act, which bans systems that are deemed excessively risky and establishes responsibilities for developers of high-risk AI applications such as in healthcare and housing.

Texas, AI, Infrastructure