Texas could overtake Northern Virginia as the world’s largest data center market by 2030, according to JLL’s North America Data Center Report — Year-End 2025, as artificial intelligence infrastructure drives record construction across frontier markets.
JLL reports that vacancy remains locked at 1% for the second consecutive year despite unprecedented construction levels. The firm states that “record-low vacancy sustained over two consecutive years provides compelling evidence against bubble concerns.”
More than 35 gigawatts of data center capacity is currently under construction across North America. Of that pipeline, 64% sits outside traditional mature hubs, with Texas emerging as the leading frontier market. JLL tracks 6.5 gigawatts of capacity under construction in Texas alone.
“Bubble concerns are difficult to reconcile with 99% sector occupancy,” the report states.
Texas’ scale and construction momentum could allow the state to surpass Virginia within five years if current trends continue.
Hyperscalers Deploy Historic Capital
The expansion reflects historic capital commitments from hyperscalers.
JLL reports that the top five hyperscale operators have announced $710 billion in planned 2026 capital expenditures, sufficient to support roughly 35 gigawatts of new or refreshed capacity globally.
“The data center sector has officially entered hyperdrive,” said Andy Cvengros, Executive Managing Director and Co-Lead of U.S. Data Center Markets at JLL. “Record-low vacancy sustained over two consecutive years provides compelling evidence against bubble concerns, especially when nearly all our massive construction pipeline is already pre-committed by investment-grade tenants.”
Texas has attracted a significant share of that investment.
As previously reported by The Dallas Express, Google announced a $40 billion investment in Texas to expand AI and data center infrastructure across North and West Texas.
Oracle and OpenAI are developing the Stargate data center project in Abilene, while Meta is constructing a major facility in El Paso. Microsoft Azure hosts OpenAI systems in San Antonio, anchoring Texas as a core AI infrastructure hub.
Infrastructure Constraints Remain
The report acknowledges mounting infrastructure pressures as demand expands.
Grid connection timelines now average four years or longer, according to JLL, forcing hyperscalers to secure capacity years in advance and expand into markets with available power resources.
“Developers that collaborate with utilities on innovative solutions, such as flexible load profiles, phased power requirements or backup generation, can often expedite their grid connections,” said Matt Landek, Global Division President, Data Centers and Critical Environments at JLL.
In December, The Dallas Express examined whether the state’s AI boom could create heightened power-grid risk driven by AI demand after the North American Electric Reliability Corporation warned that ERCOT could face tight winter supply margins during extreme cold.
While ERCOT has added solar and battery capacity since 2021, sustained hyperscale growth will require continued expansion of generation and transmission infrastructure.
If construction momentum and capital deployment continue at the current pace, Texas could redraw the global data center map by the end of the decade.
