The Pro-Business View for Texas
Texas is standing at the center of the global AI economy and businesses have a choice to make. This is not a moment to slow down innovation. It’s a moment to lead it responsibly, strategically, and at scale.
The AI opportunity in Texas is fundamentally a growth story. Data centers, semiconductors, healthcare innovation, and autonomous systems are driving billions in investment and positioning the state as a global powerhouse. But growth without coordination creates friction on energy, water, talent, and trust.
A pro-business AI strategy isn’t about restriction. It’s about intelligent expansion.
Businesses operating in Texas need to do three things now:
- Build with infrastructure awareness. AI deployment must align with energy and water realities. Efficiency is no longer optional; it’s a competitive advantage.
- Invest in workforce transformation. The companies that win will not just hire AI talent, they will create it internally at scale.
- Lead on governance before it’s mandated. Trust, transparency, and security will define market leaders long before regulation catches up.
This is where AI for Better stands apart. We believe the market should be bigger, faster, and more impactful but also more intentional.
As I’ve said before:
“AI is not a technology race, it's an execution race. The companies that win in Texas won’t be the ones who adopt AI first, but the ones who deploy it best aligned to infrastructure, people, and real business outcomes.” - James Nicholas Kinney, President, AI for Better
Texas doesn’t need to choose between innovation and responsibility. It can and should own both.
10 Key AI Issues for Texas
1. Texas Is Becoming the World's #1 AI Data Center Hub
Texas is on track to become the world's largest hub for AI data centers by 2030, with a projected 142% increase in its share of the data center market through 2028, surpassing Virginia as the top location for new data center development in the U.S. National Today. The scale of investment is staggering: Anthropic alone announced plans to spend $50 billion on a U.S. AI infrastructure build-out, starting with custom data centers in Texas and New York. CNBC. Meta is also building a 1GW AI data center in El Paso, its third facility in Texas. CNBC.
Source: San Antonio Today (April 2026); CNBC (Nov. 2025); CNBC (March 2026)
2. The ERCOT Power Grid Is Under Severe Strain
In September 2024, ERCOT was tracking 56 gigawatts of large load interconnection requests. That number has nearly quadrupled to 205 gigawatts—more than twice ERCOT's peak demand record of 85.5 gigawatts in August 2023—with about three-quarters of those requests coming from data centers. The Texas Tribune.
To respond, ERCOT approved a $9.4 billion project to build a 1,109-mile "super highway" of new 765-kilovolt transmission lines, the first phase of a plan whose full price tag reaches nearly $33 billion. Energy Capital.
Source: Texas Tribune (Oct. 2025); Energy Capital Houston (Dec. 2025)
3. Water: The Hidden Crisis Nobody Is Regulating
This is arguably the most underreported AI issue in Texas. In 2025, data centers across the state are projected to use 49 billion gallons of water, primarily for cooling servers—enough to supply millions of households. Newsweek.
Unlike electricity, no analogous state law exists to regulate water use. Projections suggest that by 2030, consumption could rise to as much as 399 billion gallons, or about 7% of total water use in Texas. Texas Public Radio.
Source: Newsweek (Aug. 2025); Texas Public Radio (Aug. 2025)
4. The Texas Medical Center & AI in Healthcare
Houston is home to the largest medical center in the world—the Texas Medical Center—which hosts 60+ institutions and serves 10 million patients annually. AI is rapidly transforming care.
UTHealth Houston developed an AI program to translate medical lectures into Spanish and partnered with OpenAI to integrate AI into healthcare and education while maintaining HIPAA compliance. Researchers are also using deep learning to predict severe sepsis four hours earlier than traditional methods.
Source: Rice University Ken Kennedy Institute (2026); UTHealth Houston AI Hub
5. Universities Racing to Build the AI Workforce Pipeline
Texas universities are central to AI research and talent. The NSF AI Institute at UT Austin continues work on improving AI model accuracy with applications in drug development and MRI diagnostics.
The Texas Legislature has allocated $698 million to the Semiconductor Innovation Fund and $552 million to the Texas Institute for Electronics. AI graduates report a 95% employment rate within six months, with average starting salaries above $85,000.
Source: UT Austin News (July 2025); UT System (2024); Research.com (2026)
6. Autonomous Vehicles: Texas as a Testing Battleground
Texas is a frontline testing ground for self-driving technology. In March 2026, Waymo deployed vehicles across major Texas cities, with a high-profile incident involving an ambulance delay.
Highway 130 has become a testing corridor for companies like Aurora, Einride, and Waymo. Senate Bill 2807 requires commercial AV operators to maintain authorization with TxDMV starting May 2026.
Source: Texas Tribune (March 2026); SlashGear (April 2026); TxDMV
7. The Texas Stock Exchange & AI-Powered Finance
The Texas Stock Exchange (TXSE) received SEC approval and plans to launch in 2026. Its AI platform, Oculon Intelligence, provides market analytics, regulatory insights, and surveillance.
Texas is home to over 50 Fortune 500 companies, with one in ten U.S. public companies based in the state.
Source: Dallas Innovates (Oct. 2025); FinTech Futures (Nov. 2025); CBS Texas (Sept. 2025)
8. Semiconductors: Texas as America's Chip Manufacturing Core
The Texas Institute for Electronics secured $1.45 billion in investment to build the nation’s first 3D microsystems integration foundry.
Texas Instruments reported a 70% year-over-year increase in data center-related sales, reaching $17.7 billion in revenue for 2025.
Source: Texas Institute for Electronics; IndexBox (April 2026)
9. AI & Transportation: Fixing Texas's Traffic Nightmare
Texas is deploying AI to address congestion. The Texas Department of Transportation’s CAV Task Force is coordinating smart infrastructure statewide.
Austin, Houston, Dallas, and San Antonio are designated "Star Hubs" for AI growth, with over 250% growth in AI job postings from 2018 to 2025.
Source: MastersInAI.org (Brookings Metro, 2025)
10. AI Governance, Cybersecurity & Regulation
Texas faces a balance between rapid AI growth and regulation. A Texas 2036 poll found:
47% of voters support restricting AI use
27% trust the government to regulate it effectively
80% support taxing electricity used by AI data centers
San Antonio houses key cyber operations, and Texas is developing its own regulatory frameworks amid federal debate.
Source: Texas 2036 (Jan. 2025); ML Strategies (Feb. 2026)
Texas is standing at the center of the global AI economy and businesses have a choice to make. This is not a moment to slow down innovation. It’s a moment to lead it responsibly, strategically, and at scale.
The AI opportunity in Texas is fundamentally a growth story. Data centers, semiconductors, healthcare innovation, and autonomous systems are driving billions in investment and positioning the state as a global powerhouse. But growth without coordination creates friction on energy, water, talent, and trust.
A pro-business AI strategy isn’t about restriction. It’s about intelligent expansion.
Businesses operating in Texas need to do three things now:
- Build with infrastructure awareness. AI deployment must align with energy and water realities. Efficiency is no longer optional; it’s a competitive advantage.
- Invest in workforce transformation. The companies that win will not just hire AI talent, they will create it internally at scale.
- Lead on governance before it’s mandated. Trust, transparency, and security will define market leaders long before regulation catches up.
This is where AI for Better stands apart. We believe the market should be bigger, faster, and more impactful but also more intentional.
As I’ve said before:
“AI is not a technology race, it's an execution race. The companies that win in Texas won’t be the ones who adopt AI first, but the ones who deploy it best aligned to infrastructure, people, and real business outcomes.” - James Nicholas Kinney, President, AI for Better
Texas doesn’t need to choose between innovation and responsibility. It can and should own both.
10 Key AI Issues for Texas
1. Texas Is Becoming the World's #1 AI Data Center Hub
Texas is on track to become the world's largest hub for AI data centers by 2030, with a projected 142% increase in its share of the data center market through 2028, surpassing Virginia as the top location for new data center development in the U.S. National Today. The scale of investment is staggering: Anthropic alone announced plans to spend $50 billion on a U.S. AI infrastructure build-out, starting with custom data centers in Texas and New York. CNBC. Meta is also building a 1GW AI data center in El Paso, its third facility in Texas. CNBC.
Source: San Antonio Today (April 2026); CNBC (Nov. 2025); CNBC (March 2026)
2. The ERCOT Power Grid Is Under Severe Strain
In September 2024, ERCOT was tracking 56 gigawatts of large load interconnection requests. That number has nearly quadrupled to 205 gigawatts—more than twice ERCOT's peak demand record of 85.5 gigawatts in August 2023—with about three-quarters of those requests coming from data centers. The Texas Tribune.
To respond, ERCOT approved a $9.4 billion project to build a 1,109-mile "super highway" of new 765-kilovolt transmission lines, the first phase of a plan whose full price tag reaches nearly $33 billion. Energy Capital.
Source: Texas Tribune (Oct. 2025); Energy Capital Houston (Dec. 2025)
3. Water: The Hidden Crisis Nobody Is Regulating
This is arguably the most underreported AI issue in Texas. In 2025, data centers across the state are projected to use 49 billion gallons of water, primarily for cooling servers—enough to supply millions of households. Newsweek.
Unlike electricity, no analogous state law exists to regulate water use. Projections suggest that by 2030, consumption could rise to as much as 399 billion gallons, or about 7% of total water use in Texas. Texas Public Radio.
Source: Newsweek (Aug. 2025); Texas Public Radio (Aug. 2025)
4. The Texas Medical Center & AI in Healthcare
Houston is home to the largest medical center in the world—the Texas Medical Center—which hosts 60+ institutions and serves 10 million patients annually. AI is rapidly transforming care.
UTHealth Houston developed an AI program to translate medical lectures into Spanish and partnered with OpenAI to integrate AI into healthcare and education while maintaining HIPAA compliance. Researchers are also using deep learning to predict severe sepsis four hours earlier than traditional methods.
Source: Rice University Ken Kennedy Institute (2026); UTHealth Houston AI Hub
5. Universities Racing to Build the AI Workforce Pipeline
Texas universities are central to AI research and talent. The NSF AI Institute at UT Austin continues work on improving AI model accuracy with applications in drug development and MRI diagnostics.
The Texas Legislature has allocated $698 million to the Semiconductor Innovation Fund and $552 million to the Texas Institute for Electronics. AI graduates report a 95% employment rate within six months, with average starting salaries above $85,000.
Source: UT Austin News (July 2025); UT System (2024); Research.com (2026)
6. Autonomous Vehicles: Texas as a Testing Battleground
Texas is a frontline testing ground for self-driving technology. In March 2026, Waymo deployed vehicles across major Texas cities, with a high-profile incident involving an ambulance delay.
Highway 130 has become a testing corridor for companies like Aurora, Einride, and Waymo. Senate Bill 2807 requires commercial AV operators to maintain authorization with TxDMV starting May 2026.
Source: Texas Tribune (March 2026); SlashGear (April 2026); TxDMV
7. The Texas Stock Exchange & AI-Powered Finance
The Texas Stock Exchange (TXSE) received SEC approval and plans to launch in 2026. Its AI platform, Oculon Intelligence, provides market analytics, regulatory insights, and surveillance.
Texas is home to over 50 Fortune 500 companies, with one in ten U.S. public companies based in the state.
Source: Dallas Innovates (Oct. 2025); FinTech Futures (Nov. 2025); CBS Texas (Sept. 2025)
8. Semiconductors: Texas as America's Chip Manufacturing Core
The Texas Institute for Electronics secured $1.45 billion in investment to build the nation’s first 3D microsystems integration foundry.
Texas Instruments reported a 70% year-over-year increase in data center-related sales, reaching $17.7 billion in revenue for 2025.
Source: Texas Institute for Electronics; IndexBox (April 2026)
9. AI & Transportation: Fixing Texas's Traffic Nightmare
Texas is deploying AI to address congestion. The Texas Department of Transportation’s CAV Task Force is coordinating smart infrastructure statewide.
Austin, Houston, Dallas, and San Antonio are designated "Star Hubs" for AI growth, with over 250% growth in AI job postings from 2018 to 2025.
Source: MastersInAI.org (Brookings Metro, 2025)
10. AI Governance, Cybersecurity & Regulation
Texas faces a balance between rapid AI growth and regulation. A Texas 2036 poll found:
47% of voters support restricting AI use
27% trust the government to regulate it effectively
80% support taxing electricity used by AI data centers
San Antonio houses key cyber operations, and Texas is developing its own regulatory frameworks amid federal debate.
Source: Texas 2036 (Jan. 2025); ML Strategies (Feb. 2026)