Abbott highlights Texas AI boom, with Houston projects on the horizon

An aerial view of Stargate’s AI data center in Abilene. Photo courtesy OpenAI.

AI investments are booming in Texas, Gov. Greg Abbott says. And Houston is poised to benefit from this surge.

At a recent Texas Economic Development Corp. gathering in the Dallas-Fort Worth area, Abbott said AI projects on the horizon in the Lone Star State would be bigger than the $500 billion multistate Project Stargate, according to the Dallas Business Journal. So far, Stargate includes three AI data centers in Texas.

Stargate, a new partnership among OpenAI, Oracle, Softbank, and the federal government, is building AI infrastructure around the country. The project’s first data center is in Abilene, and the center’s second phase is underway. Once the second phase is finished, the 875-acre site will host eight buildings totaling about 4 million square feet with a power capacity of 1.2 gigawatts. An additional 600 megawatts of capacity might be added later.

On Sept. 23, Stargate announced the development of another five AI data centers in the U.S., including a new facility in Shackelford County, Texas, near Abilene. That facility is likely a roughly $25 billion, 1.4-gigawatt AI data center that Vantage Data Centers is building on a 1,200-acre site in Shackelford County.

Another will be in Milam County, between Waco and Austin. In conjunction with Stargate, OpenAI plans to occupy the more than $3 billion center, which will be situated on a nearly 600-acre site, the Austin Business Journal reported. OpenAI has teamed up with Softbank-backed SB Energy Global to build the facility.

Abbott said several unannounced AI projects in Texas — namely, data centers — will be larger than Stargate.

“Bottom line is ... when you look at diversification, the hottest thing going on right now is artificial intelligence,” Abbott said.

The Houston area almost certainly stands to attract some of the projects teased by the governor.

In Houston, Taiwanese tech manufacturer Foxconn already is investing $450 million to make AI servers at the 100-acre Fairbanks Logistics Park, which Foxconn recently purchased for a reported $142 million. The park features four industrial buildings totaling one million square feet. It appears Foxconn will manufacture the servers for Apple and Nvidia, both of which have announced they’ll open server factories in Houston.

The Foxconn, Apple, and Nvidia initiatives are high-profile examples of Houston’s ascent in the AI economy. A report released in July by the Brookings Institution identified Houston as one of the country’s 28 “star” hubs for AI.

The Greater Houston Partnership says the Houston area is undergoing an "AI-driven data revolution."

“As Houston rapidly evolves into a hub for AI, cloud computing, and data infrastructure, the city is experiencing a surge in data center investments driven by its unique position at the intersection of energy, technology, and innovation,” the partnership says.

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U.S. Congressman Jake Ellzey made the announcement in Dallas last week. Photo courtesy of Google

Google to invest $1B in data center tech, clean energy in Texas

coming in hot

Google is making a big investment in Texas to the tune of $1 billion.

According to a news release from the company, the tech giant will spend more than $1 billion to support its cloud and data center infrastructure and expand its commitment to clean energy.

The $1 billion will be spent on data center campuses in Midlothian and Red Oak to help meet growing demand for Google Cloud, AI innovations, and other digital products and services such as Search, Maps, and Workspace.

In addition to its data center investment, Google has also forged long-term power purchase agreements with Houston-based Engie, as well as Madrid-based entities Elawan, Grupo Cobra, and X-ELIO for solar energy based in Texas. Together, these new agreements are expected to provide 375 MW of carbon-free energy capacity, which will help support Google’s operations in Texas.

These agreements were facilitated through LEAP (LevelTen Energy’s Accelerated Process), which was co-developed by Google and LevelTen Energy to make sourcing and executing clean energy PPAs more efficient, and contributes to the company’s ambitious 2030 goal to run on 24/7 carbon-free energy on every grid where it operates.

The company has contracted with energy partners to bring more than 2,800 megawatts (MW) of new wind and solar projects to the state. Google’s CFE percentage in the ERCOT grid region, which powers its Texas data centers, nearly doubled from 41 percent in 2022 to 79 percent in 2023.

The initiatives were announced at a conference in Midlothian on August 15, attended by business leaders and politicians including U.S. Congressman Jake Ellzey, c, Ted Cruz, and Citi CIO Shadman Zafar.

The Dallas cloud region is part of Google Cloud's global network of 40 regions that delivers services to large enterprises, startups, and public sector organizations.

In a statement, Piazza said that "expanding our cloud and data center infrastructure in Midlothian and Red Oak reflects our confidence in the state's ability to lead in the digital economy."

Data centers are the engines behind the growing digital economy. Google has helped train more than 1 million residents in digital skills through partnerships with 590 local organizations, including public libraries, chambers of commerce, and community colleges.

In addition to its cloud region and Midlothian data center, Google has offices in Austin, Dallas, and Houston. The new Google’s total investment in Texas to more than $2.7 billion.

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This article originally ran on CultureMap.

According to a report from CBRE, Houston registered the eighth-most data center leasing in North America in first half of 2021. Photo by Christina Morillo/Pexels

Report: Houston sees uptick in data center leasing activity

by the numbers

Houston's data center market is electrified. In the first half of 2021, the local data center market saw the eight highest amount of leasing activity among the 17 North American markets tracked by commercial real estate services company CBRE.

In the first half of this year, the Houston data market experienced net absorption of 5.7 megawatts worth of capacity, up 119 percent from the first half of last year, CBRE says. Net absorption is a key indicator of leasing activity.

During the past year, Houston has added 5.1 megawatts of inventory, dropping the vacancy rate for data centers to 18.5 percent, according to CBRE.

"There have been a few large transactions in the first half of the year that added to Houston's increased absorption numbers," Brant Bernet, senior vice president in CBRE's Dallas office, says in a September 7 news release. "The major storyline for the Houston market is investor interest."

A handful of data center acquisitions already have occurred this year in the Houston area, and more could be on the horizon, Bernet said. Datacenters.com lists 20 privately owned data centers in the Houston area. Among all landlords, Dallas-based CyrusOne owns the most data centers in the Houston market — four.

In June, Las Vegas-based data center operator Switch completed its purchase of Austin-based data center company Data Foundry for $420 million. In Houston, Data Foundry operated two data centers totaling 370,000 square feet. At the end of 2021, Switch plans to develop more data centers in Houston and Austin that are set to open in 2023.

The smaller of Switch's two newly acquired data centers here is a 20,000-square-foot facility at 5555 San Felipe St. in West Houston. The larger one, encompassing 350,000 square feet, sits on an 18-acre site at 660 Greens Pkwy. in North Houston.

In March, Vienna, Virginia-based data center operator Element Critical purchased Skybox Datacenters' facility in Katy for an undisclosed amount. The more than 96,000-square-foot data center sits on 20 acres at 22000 Franz Rd. Skybox is based in Dallas.

A CBRE report indicates Houston's data center market remains dominated by international energy companies, finance companies, and regional health care providers. Demand comes largely from locally based companies.

Phillip Marangella, chief marketing officer at Herndon, Virginia-based EdgeConneX, is among insiders in the data center industry who are bullish about the future of data centers. EdgeConneX operates a 93,400-square-foot data center at 1510 Prime West Pkwy. in Katy.

"Data centers will be processing more workloads, more data, more video, more machine learning, and [will be] serving as facilitators for a global transformation in business, even smaller or more regional enterprises," Marangella tells Data Center Frontier. "Data centers are becoming part of an infrastructure fabric of capacity, connectivity, power, and proximity that is empowering enterprises to take advantage of the location, the scale, and the economics that work for them."

Data Foundry debuted its most recent expansion in North Houston, but that's just the start of the Austin-based company's growth in the Bayou City. Photo courtesy of Data Foundry

Data center in North Houston unveils newest expansion — with more growth planned

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Data Foundry Inc. may be finished with its 27,000-square-foot expansion at the company's data center in North Houston, but it's by no means finished growing at the site.

The Austin company's 18-acre, master-planned campus at 660 Greens Pkwy. allows for another 200,000 square feet. At build-out, Data Foundry will operate 350,000 square feet of space there.

Currently, the data center encompasses 150,000 square feet. The recent expansion completes the development's first phase. Each of two future phases will add 100,000 square feet.

So far, there's no timetable for the data center's second and third phases.

"It's all a function of demand. We will deploy the capital in response to the pace at which we end up filling up the new space," says Ed Henigin, chief technology officer of Data Foundry.

The 27,000-square-foot expansion debuted in late January at Data Foundry's Houston 2 Data Center. Henigin says space remains available there, but the company does have prospective tenants in the pipeline. It could take anywhere from six months to four years to lease the entire expansion, he says.

Data Foundry says increased customer demand along with business growth in Houston — especially in the healthcare, energy, and manufacturing sectors — prompted the four-megawatt expansion.

"For folks who are outside of Houston, it's an underappreciated market," Henigin says. "It's a huge economy, and there's a lot of dynamic activity happening in Houston and a lot of growth."

Generally, demand for data center space in Houston is "steady and healthy," Henigin adds.

"I don't think we're really overserved or underserved at this point. I think we're pretty well-balanced," he says.

Henigin points out that demand can shift depending on the region's economic conditions, such as upswings or downturns in the energy sector.

"A lot of the folks who have businesses in Houston have learned to be a little cautious, because you don't necessarily know when the next dry spell is coming," he says. "So there's a lot of careful planning or careful execution in business practices in order to be resilient."

Although Houston ranks as the fifth largest metro area in the U.S., it's not among the country's 10 biggest data center markets, unlike Dallas-Fort Worth and Austin/San Antonio. According to DataCenterMap.com, 40 data centers operate in the Houston area. A number of the region's data centers are in North Houston, The Woodlands, and Katy, according to datacenterHawk.

Among Data Foundry's competitors in the Houston market are CyrusOne Inc., Skybox Datacenters LLC, and Stream Data Centers LP — all based in Dallas — and San Francisco-based Digital Realty Trust Inc., according to datacenterHawk.

Customers of Data Foundry's Houston 2 Data Center include Carrizo Oil & Gas Inc., FMC Technologies Inc., Marathon Oil Corp., and Mattress Firm Inc. — all based in Houston — and Galveston-based Moody National Bank.

Houston 2 offers a 185 mph wind-rated infrastructure and an elevation above the 500-year floodplain. During Hurricane Harvey, tenants didn't lose power or network service, or experience flooding, Data Foundry says.

Data Foundry has operated data centers in the Houston area since 2002. Its other Houston data center, inside the Marathon Oil Tower at 5555 San Felipe St., comprises 20,000 square feet.

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Intuitive Machines lands $180M NASA contract for lunar delivery mission

to the moon

NASA has awarded Intuitive Machines a $180.4 million Commercial Lunar Payload Services (CLPS) award to deliver science and technology to the moon.

This is the fifth CLPS award the Houston spacetech company has received from NASA, according to a release. It will be the first mission to utilize Intuitive Machines' larger cargo lunar lander, Nova-D.

Known as IM-5, the mission is expected to deliver seven payloads to Mons Malapert, a ridge near the Lunar South Pole, which is a "compelling location for future communications, navigation, and surface infrastructure," according to the release.

“We believe our space infrastructure provides the scalability and flexibility needed to support an increased cadence of new Artemis missions and advance national objectives. This CLPS award accelerates our expansion efforts as we build, connect, and operate the systems powering that infrastructure,” Steve Altemus, CEO of Intuitive Machines, said in the release. “We look forward to working closely with NASA to deliver mission success on IM-5 and to provide sustained operations and persistent connectivity in the cislunar environment and across the solar system.”

The delivery will include the Australian Space Agency’s lunar rover, known as Roo-ver, and another lunar rover from Honeybee Robotics, a part of Jeff Bezos' Blue Origin. Intuitive Machines will also deliver chemical analysis instruments, radiation detectors and other technologies, as well as a capsule named Sanctuary that shows examples of human achievements.

Intuitive Machines previously completed its IM-1 and IM-2 missions, which put the first commercial lunar lander on the moon and achieved the southernmost lunar landing, respectively.

Its IM-3 mission is expected to deliver international payloads to the moon's Reiner Gamma this year. It’s IM-4 mission, funded by a $116.9 million CLPS award, is expected to deliver six science and technology payloads to the Moon’s South Pole in 2027.

The company also announced a $175 million equity investment to fuel growth earlier this month.

TotalEnergies exits U.S. offshore wind sector in $1B federal deal

Energy News

TotalEnergies, a French company whose U.S. headquarters is in Houston, has agreed to redirect nearly $930 million in capital from two offshore wind leases on the East Coast to oil, natural gas and liquefied natural gas (LNG) production.

In its agreement with the U.S. Department of the Interior, TotalEnergies has also promised not to develop new offshore wind projects in the U.S. “in light of national security concerns,” according to a department press release.

Federal agency hails ‘landmark agreement’

The Department of the Interior called the deal a “landmark agreement” that will steer capital “from expensive, unreliable offshore wind leases toward affordable, reliable natural gas projects that will provide secure energy for hardworking Americans.”

Renewable energy advocates object to what they believe is the Trump administration’s mischaracterization of offshore wind projects.

Under the Department of the Interior agreement, the federal government will reimburse TotalEnergies on a dollar-for-dollar basis for the leases, up to the amount that the energy company paid.

“Offshore wind is one of the most expensive, unreliable, environmentally disruptive, and subsidy-dependent schemes ever forced on American ratepayers and taxpayers,” Interior Secretary Doug Burgum said in the announcement. “We welcome TotalEnergies’ commitment to developing projects that produce dependable, affordable power to lower Americans' monthly bills while providing secure U.S. baseload power today — and in the future.”

TotalEnergies cites U.S. policy in move away from U.S. wind power

In the news release, Patrick Pouyanné, chairman and CEO of TotalEnergies, says the company was “pleased” to sign the agreement to support the Trump administration’s energy policy.

“Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States, in exchange for the reimbursement of the lease fees,” Pouyanné says.

TotalEnergies redirects capital to LNG, oil, and natural gas

TotalEnergies will use the $928 million it spent on the offshore wind leases for development of a joint venture LNG plant in the Rio Grande Valley, as well as for production of upstream oil in the Gulf of Mexico and for production of shale gas.

“These investments will contribute to supplying Europe with much-needed LNG from the U.S. and provide gas for U.S. data center development. We believe this is a more efficient use of capital in the United States,” Pouyanné says.

TotalEnergies paid $133.3 million for an offshore wind lease at the Carolina Long Bay project off the coast of North Carolina and $795 million in 2022 for a lease covering a 1,545-megawatt commercial offshore wind facility off the coast of New Jersey.

“TotalEnergies’ studies on these leases have shown that offshore wind developments in the United States, unlike those in Europe, are costly and might have a negative impact on power affordability for U.S. consumers,” TotalEnergies said in a company-issued press release. “Since other technologies are available to meet the growing demand for electricity in the United States in a more affordable way, TotalEnergies considers there is no need to allocate capital to this technology in the U.S.”

Since 2022, TotalEnergies has invested nearly $12 billion to promote the development of oil, LNG, and electricity in the U.S. In 2025, TotalEnergies was the No. 1 exporter of LNG from the U.S.

Industry groups push back on offshore wind pullback

The American Clean Energy Association has pushed back on the Trump administration’s characterization of offshore wind projects.

“The offshore wind industry creates thousands of high-quality, good-paying jobs, and is revitalizing American manufacturing supply chains and U.S. shipyards,” Jason Grumet, the association’s CEO, said in December after the Trump administration paused all leases for large-scale offshore wind projects under construction in the U.S. “It is a critical component of our energy security and provides stable, domestic power that helps meet demand and keep costs low.”

Grumet added that President Trump’s “relentless attacks on offshore wind undermine his own economic agenda and needlessly harm American workers and consumers.” He called for passage of federal legislation that would prevent the White House “from picking winners and losers” in the energy sector and “placing political ideology” above Americans’ best interests.

The National Resources Defense Council offered a similar response to the offshore wind leases being paused.

“In its ongoing effort to prop up waning fossil fuels interests, the administration is taking wilder and wilder swings at the clean energy projects this economy needs,” said Pasha Feinberg, the council’s offshore wind strategist. “Investments in energy infrastructure require business certainty. This is the opposite. If the administration thinks the chilling impacts of this action are limited to the clean energy sector, it is sorely mistaken.”

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This article originally appeared on EnergyCapitalHTX.com.

Houston researcher examines how AI helps and hurts creativity

eye on ai

As artificial intelligence continues to grow and seeps into spaces like art, design and writing, a Houston researcher is examining its effects on creativity.

University of Houston’s Bauer College Assistant Professor Jinghui Hou, in collaboration with scholars around the world, recently published the paper "The Double-Edged Roles of Generative AI in the Creative Process" in the journal Information Systems Research.

Through the research, the team identified two stages of creativity that AI can influence: ideation and implementation.

In one study, Hou and her team developed a lab experiment to examine the impact of a cutting-edge generative AI tool during the brainstorming or ideation phase on a group of designers with varying levels of expertise.

The study showed that nearly all designers who used generative AI during this stage improved in the creativity of their graphic design work, and that the improvements were substantial and consistent across the board.

“In the first stage, we find that for anyone, including ordinary people and expert designers, AI is very helpful because of its computational power,” Hou said in a news release. “It can go beyond the imagination that humans have. For example, if I wanted to imagine a tiger with wings, it would be hard to see that in my head, but AI can do it easily.”

However, a second study examining the implementation stage found that AI affects professionals differently than novice designers.

The study showed that novice designers continued to improve in all aspects of their work when using AI. But more expert designers did not see significant improvements in the implementation stage. Rather, expert designers who used AI spent 57 percent more time completing their work compared with their peers who did not use AI.

“In the implementation stage, we find that AI is still very helpful for those ordinary people, but it creates more work for expert designers,” Hou said in the release. “This is because the designer has years of training to materialize a piece of artwork. We find that AI uses different techniques to produce creative work. For designers, it can become burdensome to revise what AI made.”

Hou’s paper suggests that AI is most helpful in the brainstorming stage, but hopes to see generative AI developers program tailor the technology for expert-level, professional needs.

“It could give users more freedom to fit the technology to their usage pattern and workflow,” Hou added. “In a sense, it's not about people catering to the AI, but the AI technology catering to people."

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