North Texas just beat out the world’s biggest tech hubs to claim the No. 1 spot in global data center rankings — and it’s not even close.
Dallas ranked first in the 2026 Global Data Center Market Comparison by Cushman & Wakefield, a commercial real estate services firm that compared 107 markets worldwide. The comprehensive study evaluated markets based on a range of factors including available infrastructure, regulatory environment, power supply, land availability, and overall growth potential. The Lone Star State dominated across categories, with Austin-San Antonio and West Texas also taking top spots.
This ranking represents a significant shift in the data center industry landscape. For years, Northern Virginia’s “Data Center Alley” has been synonymous with digital infrastructure in America, housing the backbone of the internet and serving as the primary hub for cloud computing operations. But Texas is now emerging as the dominant force in where future development will occur.
The rankings confirm what conservatives already knew: red states win when they let businesses build.
“Texas is growing at a pace that could eventually match, or surpass, Virginia, the world’s largest data center market by operating capacity.”
The AI boom is driving the surge. The rise of artificial intelligence applications, from large language models to machine learning systems, has created unprecedented demand for computing power. Companies need massive amounts of land and electricity to support artificial intelligence computing — and Texas has both in abundance.
Dallas has one of the largest pipelines of planned data center development in the world, trailing only Virginia and Atlanta. The development pipeline represents billions of dollars in planned investment and signals where tech companies see the future of digital infrastructure heading. But the growth is spreading fast across the entire state as developers search for space and power.
Texas has several built-in advantages over blue-state competitors: abundant land, a business-friendly environment, an independent and deregulated power grid, and incentives for development. The state’s regulatory approach stands in stark contrast to markets like California, where permitting delays and environmental restrictions have historically slowed major infrastructure projects.
Translation: Texas doesn’t strangle businesses with red tape.
The rapid growth has drawn attention from Gov. Greg Abbott, who’s pressing data centers to provide more of their own power and cover infrastructure costs as development accelerates. This represents a balancing act between maintaining the state’s pro-business reputation while ensuring the existing population doesn’t bear the burden of rapidly expanding industrial electricity demand. Abbott recently paused new projects pending a statewide grid audit — a move to ensure the state’s power supply can handle the massive demand.
The scale of growth is putting pressure on resources. A single large data center can consume as much electricity as a small city, with some facilities requiring hundreds of megawatts of continuous power. Water availability is becoming a concern in West Texas and the Panhandle, while the enormous electricity demand is forcing greater focus on the state’s power supply. Data centers require substantial water for cooling systems, adding another layer of resource planning to the equation.
Electricity is now the top consideration when companies choose where to build, according to Cushman & Wakefield. This marks a fundamental change in site selection criteria, with power availability and reliability now outweighing traditional factors like proximity to urban centers or fiber connectivity. Utilities are taking an average of 4.4 years to connect large new projects to the grid — prompting some developers to secure or generate power themselves.
The lengthy connection timeline has sparked innovation in how data centers approach power. Some companies are exploring on-site generation, including natural gas plants and even small nuclear reactors, to ensure reliable electricity without waiting for utility infrastructure upgrades.
Texas adopted new rules requiring some large electricity users to share infrastructure costs and account for their impact on grid reliability — a pragmatic step to manage the boom without killing it. These rules represent a middle path: maintaining the state’s competitive advantage while ensuring sustainable growth that doesn’t compromise grid stability for existing residents and businesses.
Virginia remains the world’s largest data center market by total operating capacity. But Cushman & Wakefield’s ranking looks beyond sheer size to where the industry is positioned to grow — and Texas is winning that race. The distinction matters because it signals where investment dollars are flowing and which markets are best positioned for the next decade of digital infrastructure expansion.
The question now: can Texas provide enough power to stay on top?
If the state’s track record on energy, business freedom, and job creation means anything, the answer is yes.
