2025 Central Texas Data Center Market Report: Austin, San Antonio & Waco's Explosive Growth

Central Texas Data Center Market Infographic

Executive Summary: The Digital Gold Rush in Texas Hill Country

Central Texas is experiencing an unprecedented data center boom, transforming from a secondary market into America's second-largest data center hub after Northern Virginia. This comprehensive market analysis examines how Austin, San Antonio, and emerging locations like Waco are reshaping the digital infrastructure landscape through 2028.

Key Findings

Central Texas data center capacity quadrupled since 2020
Market size reached 463.5 MW in 2024, with 664 MW under construction and 1,229 MW planned
Record-low 4% vacancy rates with nearly all new capacity pre-leased
Hyperscale, colocation, and edge segments all thriving simultaneously

Download Our Complete 2025 Central Texas Data Center Market Report (PDF) | Explore Interactive Dashboard

Austin & San Antonio: From Secondary Markets to Powerhouse Hub

The Austin-San Antonio corridor has rapidly transformed into one of America's most dynamic data center regions. What industry insiders once considered "secondary markets" have surged to prominence, capitalizing on Texas's business-friendly environment and the explosive demand for cloud and AI infrastructure.

Market Growth Metrics That Matter

Capacity Explosion: The combined Austin-San Antonio market quadrupled in size since 2020
Under Development: 463.5 MW of new capacity currently under development
Market Position: Now ranks as the second-largest data center market in the U.S. after Northern Virginia
Vacancy Rate: Critically low ~4% vacancy, indicating severe supply constraints
Current Capacity: 646 MW built, with another 664 MW under construction
Future Pipeline: 1,229 MW additional capacity planned
Leasing Velocity: New facilities are being leased almost as fast as they can be built

As JLL's data center expert Curt Holcomb notes, "We're seeing really insatiable growth," driven primarily by surging cloud services and artificial intelligence workloads. The same AI revolution powering technologies like ChatGPT is simultaneously creating massive demand for server infrastructure.

Market Capacity Visualization

| Year | Operational (MW) | Under Construction (MW) | Planned (MW) | |------|------------------|-------------------------|--------------| | 2020 | 160 | 85 | 120 | | 2022 | 320 | 210 | 450 | | 2024 | 646 | 664 | 1,229 | | 2026 (Projected) | 1,450 | 950 | 1,600 | | 2028 (Projected) | 2,800 | 1,200 | 2,000 |

Source: San Antonio Express-News and Texas Real Estate Research Center

View Interactive Growth Visualization ✨

Real-World Development Examples

This explosive growth is visible across the region:

Microsoft's Castroville Campus: Converting farmland west of San Antonio into massive data center facilities
San Marcos Corridor: New data centers rising along rural backroads between Austin and San Antonio
Williamson County: Significant development north of Austin bringing hundreds of megawatts online
Bastrop Expansion: Eastern growth corridor attracting major data center investments

Waco and the I-35 Corridor: Tomorrow's Data Center Frontier

While Austin and San Antonio lead the current boom, the next wave of development is already emerging along the I-35 corridor toward Waco and Temple. This region offers compelling advantages for hyperscale operators seeking large-scale development opportunities.

Why Waco Is Gaining Momentum

Land Availability: Abundant, affordable tracts suitable for 500+ acre hyperscale campuses
Strategic Location: Positioned along the I-35 corridor between major Texas metros
Disaster Recovery: Equidistant from Dallas, Austin, and Houston, ideal for backup facilities
Cost Advantages: Significantly lower land costs than established markets

Spotlight: Meta's $800 Million Temple Investment

Meta (Facebook's parent company) exemplifies this trend with its $800 million hyperscale project in Temple, just outside Waco. This massive development:

Spans 900,000+ square feet across nearly 400 acres
Features dual power substations and robust fiber connectivity
Will create thousands of construction jobs
Is designed for multi-phase expansion over the next decade

Edge Computing Applications

Waco's central location makes it ideal for edge computing applications, with companies like DataBank operating facilities that provide:

Disaster recovery services for major Texas cities
Low-latency backup capabilities
Regional content delivery networks
Support for IoT and autonomous vehicle testing

Market Comparison: Austin vs. San Antonio vs. Waco

| Factor | Austin (Travis/Williamson County) | San Antonio (Bexar/Medina County) | Waco (McLennan County) | |--------|-----------------------------------|-----------------------------------|------------------------| | Market Status | Fast-growing "secondary" market; record low vacancy (~1.8%) and huge demand | Rapid expansion hub; near-zero vacancy and major hyperscale investments | Nascent market; few existing facilities but attracting interest from large projects | | Land Availability | Limited in city; expanding to suburbs (Hutto, Taylor, etc.) | Plentiful on outskirts (Westover Hills, Castroville) | Abundant cheap land in and around Waco along I-35 corridor | | Power Costs | Competitive; increasing demand pressure | Very competitive; major grid investments | Highly competitive; less competition for resources | | Key Projects | Switch SuperNAP, Digital Realty expansion | Microsoft Castroville, CyrusOne expansion | Meta Temple campus, DataBank edge facility | | Growth Trajectory | Established, rapid growth continues | Accelerating, becoming primary market | Emerging, poised for significant expansion |

Source: Data compiled from San Antonio Express-News, TRERC, and DataCenters.com

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5 Factors Driving Central Texas's Data Center Advantage

Several key factors converge to make Central Texas uniquely positioned for continued data center growth:

1. Strategic Land Resources

Abundant Space: Wide-open spaces along corridors like I-35 offer room for expansion
Scale Potential: 100+ acre sites that would be impossible to find in Silicon Valley or downtown Dallas
Affordability: Land costs remain competitive, especially for large campuses
Disaster Resistance: Inland location reduces hurricane and earthquake risks versus coastal regions

2. Power Infrastructure Advantages

Capacity: Texas's deregulated ERCOT grid can rapidly scale generation capacity
Cost Efficiency: Electricity costs rank among the nation's lowest
Energy Diversity: Mix of natural gas, wind, and solar generation
Renewable Leadership: Texas leads the U.S. in wind power production
Resilience Investments: Many new facilities include on-site generation and battery storage

3. Business-Friendly Climate & Incentives

Tax Advantages: No state corporate income tax
Data Center Exemptions: Texas Data Center Exemption program offers sales tax breaks on equipment and infrastructure
Local Incentives: County and city property tax abatements and expedited permitting
Cost Comparison: Operating costs significantly lower than California or Northeast markets

4. Connectivity Infrastructure

Fiber Network: Extensive investment in fiber optic networks throughout the region
Backbone Access: Direct connections to major Internet backbones
Rural Expansion: Multi-gigabit connectivity reaching previously underserved areas
Low Latency: Fast connections between major Texas metros

5. Tech Ecosystem & Talent Pipeline

Talent Migration: Texas ranks #1 for tech worker migration nationally
Skills Development: Partnerships with local colleges to train specialized data center technicians
Tech Synergies: Proximity to semiconductor manufacturing, AI startups, and technology innovators
Contractor Network: Established ecosystem of specialized data center contractors and suppliers

Market Segmentation: Hyperscale, Colocation, and Edge Computing

The Central Texas market exhibits a rare convergence where all major data center segments are experiencing simultaneous growth:

Central Texas Data Center Market Breakdown

| Market Segment | Current Capacity (MW) | Market Share (%) | 5-Year Growth Projection (%) | |----------------|------------------------|------------------|-----------------------------| | Hyperscale | 410 | 63.5% | 325% | | Colocation | 215 | 33.3% | 280% | | Edge Computing | 21 | 3.2% | 450% |

Source: Data compiled from San Antonio Express-News and industry analysis

Explore Market Segments Breakdown 🔍

Hyperscale Sector

Major Players: Microsoft, Meta, and other cloud giants establishing massive facilities
Scale: Individual projects often exceed 50+ MW capacity
Future Development: Sites being evaluated for 500 MW to 1 GW deployments
Growth Trajectory: Capacity comparable to established markets like Ashburn, Virginia

Colocation Market

Market Growth: Capacity has quadrupled since 2020, leading the nation in colocation growth
Key Providers: CyrusOne, Digital Realty, CloudHQ, and Stream rapidly expanding
Customer Diversity: Serving enterprises, government agencies, and the U.S. military
Demand Indicators: Nearly all new capacity pre-leased before construction completion

Edge Computing Innovation

Deployment Models: Small facilities in strategic locations providing ultra-low latency services
Use Cases: Supporting 5G networks, IoT deployments, and autonomous vehicle testing
Leading Companies: Vapor IO, DataBank, and DartPoints establishing regional presence
Integration: Creating a comprehensive digital infrastructure ecosystem from core to edge

Investment Opportunities: AI-Powered Market Analysis

The complexity of the data center market creates unique opportunities for investors who leverage AI-powered analysis. At Texas AI Consulting, we use advanced AI tools to transform raw market data into actionable investment insights:

Sub-Market Analysis: Identifying the unique advantages of Austin vs. San Antonio vs. Waco
Technical Evaluation: Assessing power capacity, latency, and regulatory factors
Risk Management: Early identification of infrastructure challenges and market constraints
ROI Forecasting: Projecting returns under different growth scenarios

The same AI technologies driving demand for these data centers can help investors make smarter, faster decisions about where to allocate capital in this dynamic market.

Future Outlook: Central Texas Data Center Projections Through 2028

Our analysis projects continued strong growth for the Central Texas data center market through 2028:

2028 Market Forecast Highlights

| Metric | Projection | Growth from 2024 | |--------|------------|------------------| | Total Capacity | 4+ GW | +518% | | Investment Volume | $20+ Billion | (Through 2028) | | Land Development | 3,500+ Acres | (For data center use) | | Job Creation | 15,000+ | (Construction and operations) |

Source: Texas AI Consulting analysis based on Muskin | Elam and TRERC data

View All Forecast Metrics 📈

Capacity Growth: Total market capacity expected to exceed 4 GW by 2028
Investment Volume: More than $20 billion in new data center investment anticipated
Emerging Corridors: Development spreading north to Waco and east toward Houston
Power Infrastructure: Significant grid upgrades to support growing demand
Sustainability Focus: Increased investment in renewable energy to power facilities

Take Action: Capitalize on Central Texas's Data Center Boom

The explosive growth of data centers across Central Texas represents a generational investment opportunity. From hyperscale campuses to edge computing facilities, this market is poised for continued expansion driven by cloud computing, AI workloads, and digital transformation across industries.

How Texas AI Consulting Can Help:

Market Intelligence: Access our comprehensive analysis and forecasting
Site Selection: Identify optimal locations based on your specific requirements
Regulatory Navigation: Understand incentives and permitting processes
Network Design: Plan connectivity and infrastructure requirements
Financial Modeling: Project ROI and operational costs

Download Our Complete 2025 Central Texas Data Center Market Report | Explore Our Interactive Data Dashboard 📊

Schedule a consultation with Texas AI Consulting today to explore how you can participate in Central Texas's data center success story. The future of digital infrastructure is being built right now in our backyard—don't miss your opportunity to be part of it.

Data Sources

This market analysis incorporates data from the following authoritative sources: