Texas data center growth put Dallas at No. 1 in a global ranking as AI demand fuels rapid development across the state.
Texas data center growth just put Dallas at the top of a global leaderboard, signaling how fast the Lone Star State is becoming a heavyweight in one of the world’s fastest-growing industries. In a new 2026 ranking from Cushman & Wakefield, Dallas finished No. 1 among global data center markets, edging out better-known hubs as companies rush to build the infrastructure needed for artificial intelligence and other computing.
The real estate firm said Texas stood out across multiple regions, with Austin-San Antonio and West Texas also taking first place in their categories. The report looked at 107 markets and weighed access to power and land, projects under construction, existing infrastructure and the regulatory climate. Dallas ranked first because of its growth outlook, not because it already has the most capacity in use. Virginia still leads the world in operating data center capacity, but Dallas has one of the largest pipelines of planned development, trailing only Virginia and Atlanta.
That pipeline reflects a broader shift across the state. Development that once centered on the Dallas-Fort Worth corridor is spreading outward as operators look for large parcels of land and the electricity needed to support AI systems and related computing. Cushman & Wakefield said Texas could eventually match, or even pass, Virginia in total data center capacity if the current pace continues. The firm pointed to several advantages that give Texas an edge in the race: abundant land, a business-friendly environment, an independent and deregulated power grid and incentives for development.
“Texas data center growth put Dallas at No. 1 in a global ranking as AI demand fuels rapid development across the state.”
The Texas data center growth story is also drawing sharper attention from state leaders. Gov. Greg Abbott has pushed data centers to secure more of their own power and cover infrastructure costs as projects multiply. At the same time, Texas has adopted new rules requiring some large electricity users to share infrastructure costs and account for their effect on grid reliability. Those moves show how quickly the industry’s expansion is running into practical limits, especially in a state where power demand is rising fast.
That pressure is not limited to electricity. West Texas and the Panhandle are facing growing concern about water availability as more facilities look beyond North Texas for room to expand. The report makes clear that data center siting is no longer just about cheap land and a friendly tax climate. Companies now need enormous power access, grid stability and the ability to move quickly, and those constraints are reshaping where the next wave of investment will land.
Power has become the decisive issue nationwide. Cushman & Wakefield said electricity is now the top factor in site selection, and utilities are taking an average of 4.4 years to connect large new projects to the grid. That delay is pushing some developers to secure or generate their own power. For Texas, the challenge is straightforward: the state can stay in front only if it can keep up with the demand its own growth is attracting. Texas is leading the data center race now, but the next test is whether it can supply enough power to hold that position.
Frequently asked questions
Why did Dallas rank No. 1 in the new comparison?
Cushman & Wakefield ranked markets on growth potential, including land, power, construction and infrastructure. Dallas stood out because of its large development pipeline.
Does Dallas already have the most data center capacity in the world?
No. Virginia remains the world’s largest data center market based on capacity already in operation.
What advantages does Texas have for data center development?
The report cites abundant land, a business-friendly environment, a deregulated power grid and development incentives.
What is the biggest challenge facing Texas as the industry grows?
Power is the biggest issue, with water also drawing concern in parts of the state. The report says utilities take an average of 4.4 years to connect large projects.
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